It once seemed
so far away, that day when Broward County would run out of
land for new subdivisions.
But that day
is almost here.
Coral Springs
will reach build-out by the end of this year. Weston will run
out of vacant land within two years. Most other western communities
will hit
build-out in five to 10 years.
No matter where
you live in Broward, build-out is almost certain to boost
your home's value. The reason: demand for housing is expected to remain
strong and resales will no longer be competing with new houses in
the same
price ranges.
That's especially
good news for owners of homes priced above $200,000, which,
in certain areas, have lost tens of thousands of dollars in assessed
value
recently.
"Many of
these were our premier properties back in the 1970s," said Joe
Zdanowicz, Broward's chief appraiser. "But they're old now, and
many need new
roofs or new appliances or maintenance. They can't compete with the
new
houses."
Yet, if homeowners
hold on to these properties another three to seven years,
they should see a sizable profit when they sell, according to a consensus
of
real estate consultants, brokers, planners and elected city officials.
Specifically,
they say:
Build-out will
start pushing up prices countywide soon after Weston runs out
of land for new houses in 2002.
Homes likely
to see the greatest appreciation proportionately are those
selling for less than $150,000, where demand is expected to exceed
supply.
Upscale eastern
neighborhoods, particularly those east of Federal Highway in
Las Olas Isles and Hillsboro Beach, will experience some of the largest
price
increases, as they have been doing for years now.
Higher prices
mean more homeowners will opt not to trade up, but instead will
renovate and add on to their houses.
Teardowns will
become commonplace, even in newer communities, as land grows
more valuable than the houses on it.
Broward will
reach residential build-out by 2015, several years before Palm
Beach and Miami-Dade counties, which have considerably more undeveloped
land.
"I think
the whole county is going to profit from build-out," Zdanowicz
said.
"It's a case of supply and demand, and values are going to continue
to rise
if the economy stays good."
Reaching capacity
In another six
years, most of the construction equipment that has hovered
over western Broward, building 8,000 to 10,000 new single-family homes
a year
during the past decade, will be gone, real estate experts predict.
So will
the big chunks of vacant land.
"At the
rate we're going, in 5 years our major pieces of land will be eaten
up with new houses," said Craig Werley, senior managing director
of the
Meyers Group, a real estate consulting firm in Coral Gables.
Land that hasn't
been built on is either platted or proposed for
subdivisions. Broward has roughly 44,100 lots left for new homes,
consultants
project. The Atlantic Ocean on the east and the Everglades on the
west hem in
the county, so growth is contained. Developers dismiss suggestions
of
draining more of the Everglades, saying it is too politically unpopular,
at
least for now.
In the east,
cities such as Fort Lauderdale, Oakland Park, Wilton Manors,
Pompano Beach and Hollywood have only pockets of vacant land left.
In the west,
Coconut Creek, Cooper City, Pembroke Pines and Plantation will
run out of land in the next five to seven years and the shrinking
supply is
already jacking up prices.
In semi-rural
Parkland, one acre-plus lots are selling for more than
$100,000, almost double the price seven years ago, said Planning Director
Brad Townsend, who expects prices to continue climbing.
That's also expected
to happen in Davie, which has about 5,000 acres left for
housing.
"We think
our resales in the western areas of town are going to be fantastic
because we have a commitment to keep our housing unique," said
Davie Mayor
Harry Venis. "We get developers who want four and five houses
to the acre,
and we won't do it."
Most of the land
left in other fast-growing cities is for commercial
buildings, not houses.
Tom Kates, president
of Stiles Realty Co., said, "If someone had said to me
10 or 12 years ago that we're going to be running out of land, you
wouldn't
have believed it."
Profits anticipated
While nobody
can predict exactly how much profit build-out will bring,
Realtors, developers and real estate consultants agree most homes
will be
worth more than they are now.
"The limitation
in Broward is going to be what people earn and what they can
afford for a house," said Lewis Goodkin, a real estate consultant.
For Broward's
upper echelon, there doesn't appear to be a ceiling.
"What we
were getting a year ago, maybe $450,000 to $550,000 for a lot in the
middle of the block, now sells for $700,000 to $800,000," said
Beth
Beauchamp, owner of Intercoastal Realty in Fort Lauderdale.
Buyers in this
price range pay big bucks for land and then replace the
smaller homes on the property with mansions.
Teardowns are
becoming commonplace in Fort Lauderdale's Las Olas Isles,
Lighthouse Point, the oceanfront in Pompano Beach and some areas in
Dania
Beach. Even newer areas, such as Eagle Trace in Coral Springs, are
seeing
partial teardowns and renovations.
"There's
no end to it," said John Martinelli, of Coldwell Banker in Coral
Springs. "I had a buyer pay $238,000 for a house in the Country
Club section
of Eagle Trace, tear the roof off and add a second floor. They ended
up
putting $450,000 into the house."
Such renovations
are expected to continue pushing up prices for luxury and
moderately priced homes countywide.
Still, experts
caution not to expect the huge spike in prices that occurred
in the mid-to-late 1980s, when interest rates fell and people went
into a
buying and selling frenzy.
"It's going
to depend on the economy if we'll see prices do that again,"
Zdanowicz said.
Eastern areas
Pricey homes
will get even more expensive, and mid-price homes, such as those
selling for under $200,000 in Fort Lauderdale's Croissant Park, will
increase
in value because they're near downtown and the beach.
Less affluent
areas, including much of eastern Broward along Dixie Highway,
northwest Fort Lauderdale, west Pompano Beach and west Hollywood,
will see
values stagnate or rise only slightly unless major improvements are
made to
the neighborhood, city officials and real estate experts predict.
"We're focusing
on providing amenities, like water and sewer and paving
streets, to neighborhoods like Collier City, that have been neglected,"
said
Reagan Yarborough, zoning director for Pompano Beach. "Redevelopment
has been
slow to come to Pompano Beach, and we have to do these kinds of things
to
rebuild some of our older areas."
While waterfront
property has gotten plenty of attention, it's not equal and
build-out isn't going to change that, Realtors said.
Fort Lauderdale,
Hollywood, Lighthouse Point and Hillsboro Beach, for
example, fetch top dollar on homes between the Intracoastal Waterway
and the
Atlantic Ocean.
Values in other
oceanfront locales, such as Pompano Beach, Hallandale Beach
and Deerfield Beach, have lagged. Still, the three cities are drawing
younger
buyers and undergoing gentrification, trends that contribute to higher
resale
prices.
"We've seen
values increase 45 percent overall in the city the past 10 years,
but only by 25 percent around the beach," said Jerry Ferguson,
Deerfield
Beach's director of planning and growth management.
Build-out is
expected to continue pushing up prices in neighborhoods where
younger people are moving in and fixing up. These include Coral Ridge
and
Victoria Park in Fort Lauderdale, Golden Isles in Hallandale Beach,
Coral
Heights in Oakland Park and Middle River Estates in Wilton Manors.
Build-out
also is anticipated to spark struggling subdivisions such as Progresso
in
Fort Lauderdale, Dania Heights in Dania Beach and Emerald Hills in
Hollywood.
Geri Brafman,
36, moved to Emerald Hills two years ago and already her
three-bedroom house has declined in assessed value by $10,950 to $259,400.
Still, she thinks the area will bounce back.
"You get
so much for your money here," she said. "This is such a
desirable,
stable neighborhood that it's going to be hot."
Western areas
Homes in the
western suburbs, which have taken a hit in recent years because
of competition from new homes being built nearby, will see profits
once more
when build-out is reached.
That's good news
to homeowners in Coral Springs' Whispering Woods, Tamarac's
Woodmont, Plantation's Jacaranda Lakes, Parkland's Tall Pines North
and
Weston's Orchid Island. All have experienced some of the county's
biggest
drops in average property values.
Dr. Marshall
Taschman, who owns a five-bedroom house in Whispering Woods, saw
his house drop in value by $50,940 to $376,440 over the past two years.
"I had a
neighbor who tried for two years to sell his house and ended up
taking a $100,000 loss," said Taschman.
Once build-out
is reached, these homes -- some with large lots and golf
course locations -- will be in demand again, real estate experts predict.
Also helping
western areas, particularly Coral Springs and Weston, is the
perception that schools in those cities are among the best in Broward.
Build-out will
keep prices strong in semi-rural areas, particularly Davie,
Parkland and Southwest Ranches, because they offer a unique lifestyle
that
buyers are willing to pay more to enjoy.
Older homes selling
for around $100,000 in eastern sections of Sunrise,
Plantation, Miramar, Pembroke Pines and Davie should see big price
gains
because of increasing demand, infrastructure improvements by cities
and house
renovations.
"There's
no question that as we as a city continue paying more attention to
the east side by upgrading our standards, it will continue to benefit,"
said
Pembroke Pines Mayor Alex Fekete.
Central areas
Most older central
Broward neighborhoods, such as Lauderhill, Lauderdale
Lakes, North Lauderdale and Margate, will become hot at build-out
because
most homes in these cities sell for under $150,000. And price is attracting
many first-time buyers, immigrants and senior citizens.
"We've traditionally
been a steppingstone for first-time home buyers," said
Richard Sala, North Lauderdale's community development director. "Our
statistics show a family stays here five years before moving on, but
with
build-out, we think people will stay longer and renovate their homes
and
that's when values will really start to rise."
In recent years,
several central neighborhoods have lost value because many
of the older homes need major repairs.
Inverrary Boulevard
Estates in Lauderhill, for example, has lost potential
buyers to newer western communities, and average assessed values in
the last
year dropped from $140,835 to $131,011.
Values were mixed
in other Lauderhill neighborhoods as well as in Lauderdale
Lakes, where values declined in Oakland Estates, but increased in
Oriole
Estates.
In Margate, where
young families are replacing senior citizens, homes in
Paradise Gardens and Southgate lost value while Holiday Springs and
Coral Bay
saw values rise. In North Lauderdale, values rose in Kimberly Village,
North
Lauderdale Landings and Burnham Woods but dropped in Lauderdale North
Park.
Mixed prices
are due primarily to the condition of the houses, their location
and the upkeep of the neighborhood, Realtors and planners said.
They predict
these neighborhoods will heat up as developers seek pockets of
land for moderately priced housing. Location is one thing these central
cities have going for them. Price is another. But what could really
boost
home values, planners said, is a cohesive program among the cities
to upgrade
the State Road 7 commercial corridor. A half dozen cities are working
on such
a plan.
"We've got
to make it more attractive for people to want to come here,"
said
Elijah Wooten, Lauderhill's director of economic development.
Homes priced
under $150,000
Houses in this
range are likely to see the proportionately greatest
appreciation as demand is expected to exceed supply.
Broward's median
income for a family of four in 1997 was about $33,895,
according to the most recent Census figures available. Families in
that
income bracket can only afford homes costing $100,000 or less, mortgage
experts estimate. Already, average new home prices are inching toward
$200,000, and resales are up to an average of $160,000. And they will
keep
going up at build-out, making homes costing less than $150,000 even
harder to
find.
That could prompt
owners to hold on to their properties longer than the usual
five to seven years. Owners may believe the longer they wait, the
more their
homes will appreciate, or they won't be able to afford to move, real
estate
experts predict.
"If people
can't buy new, they're going to bid up the resale market," said
George Casey, president of Arvida's South Florida Operations.
That could push
many families out of the market or force them to rent. A big
demand could prompt some owners to convert their homes into rentals.
Many of the less
expensive homes are clustered in older areas where zoning is
often a hodge-podge and lots are small. That makes assembling property
for
large-scale development more difficult and expensive, particularly
in
lower-income areas.
Planners and
Realtors said they doubt whole neighborhoods would be leveled
for new development because of the costs and displacement of residents.
What
is more likely is that developers will buy small properties, such
as duplexes
or blocks of older homes, and fix them up in gentrified areas, such
as
Sailboat Bend and Wilton Manors, where values are rising from these
kind of
projects.
Homes priced
from $150,000 to $400,000
After taking
a big beating in the past few years, these homes are poised to
thrive once new home building ends.
Real estate experts
predict homes between five and 20 years old will benefit
the most, depending on their amenities, location and condition.
Older homes with
new roofs and new appliances could see the greatest
appreciation because of their improved conditions. Houses built less
than
five years ago could take longer to see gains because they would still
be
competing with newer houses at the same price.
Homes that need
work in older neighborhoods could see their values stagnate
if improvements are not made to upgrade them. But values could go
up
substantially once the house is fixed up, experts said.
Futures trader
Glenn Corback lives in Palm-Aire Estates in Pompano Beach,
where most of the 26 houses back up to a golf course and were built
in the
1970s. Homes in the community, which sell for more than $200,000,
have lost
an average of $45,340 in assessed value this past year, the most of
any
Broward subdivision, records show.
Appraisers attribute
the decline to the neighborhood's signs of age but say
that could change once houses are fixed up.
"This is
such an oasis in the middle of Pompano Beach that you'd think the
values would be going up," said Corback, 43. "You'd pay
$400,000 for a house
like this in Boca Raton or Coral Springs."
Mortgage experts
say that depending on debt, to buy a $150,000 to $400,000
home requires a household income of about $50,000 to $150,000 a year.
The
lower end of this range is the most popular for new homes because
builders
say it covers what a majority of buyers, both locally and from out
of town,
can afford and are willing to pay.
Housing prices
have soared in recent years because of the rising cost of land
and because of stricter building codes enacted since Hurricane Andrew
struck
South Florida in 1992.
Average home
prices in Miami-Dade and Palm Beach counties are higher than in
Broward because land is more expensive there, the housing is generally
more
upscale and buyers there tend to earn more money. This means demand
for
Broward homes in this price range will continue to be strong from
commuters.
Luxury homes
Homes costing
$400,000 or more will continue to get more expensive.
Among the biggest
gainers in Broward the past year are subdivisions east of
Federal Highway. For example, Fort Lauderdale's Harbor Beach neighborhood
saw
average assessments rise from $583,253 to $735,820.
Those values
are expected to continue climbing because of soaring land prices.
With land at
a premium, developers and Realtors predict teardowns will become
even more commonplace. They also said the debate over development
will focus
on height and density, with developers trying to put as much as they
can on a
piece of property.
Arvida's Casey
said he wouldn't be surprised to see teardowns of 10- and
15-year-old homes in Weston in the next few years and debates on how
many
floors can be added to houses and buildings.
"We have
lots that sold years ago at $60,000 with a $350,000 house on it,"
Casey said. "Now that land is scarce, [expect] people to buy
it and put up a
$1.5 million house."
Semi-rural communities
with expensive homes, such as Miramar's Country Ranch
Estates, Tall Pines in Parkland, Southwest Ranches and Plantation
Acres,
stand to gain by build-out as buyers gobble up land and replace small
ranches
with huge estates. That has residents in Southwest Ranches pushing
for
land-use restrictions as part of incorporation.
"We have
a rural lifestyle we're trying to protect," said Jim Larkin,
77, a
six-year resident of Southwest Ranches and a 45-year Broward resident.
What happens
next?
The end of the
line for new subdivisions could be a boon for redevelopment.
The same renaissance
that has transformed Fort Lauderdale's Coral Ridge,
Victoria Park and Rio Vista is predicted to migrate west to help such
neighborhoods as Ramblewood in Coral Springs, Jacaranda in Plantation,
and
Miramar Isles in Miramar.
In the east,
one of the biggest challenges will be assembling land for new
houses and apartments. Planners envision aging duplexes being replaced
with
large townhouse complexes that fill the land to maximum densities.
They see
wealthy buyers gobbling up waterfront lots and replacing smaller houses
and
old beachfront motels with mansions.
Lighthouse Point,
a small waterfront community of about 10,500 people, has
more than three dozen homes, most built in the 1970s, being remodeled
or torn
down and replaced with homes costing several hundred thousand dollars
to more
than $1 million, said Dan Keefe, the city's administrator.
"We have
a tremendous amount of redevelopment going on and I don't think it's
peaked yet," Keefe said.
Robin Benedick
can be reached at rbenedick@sun-sentinel.com
By ROBIN BENEDICK
and JOHN MAINES Staff Writers
Copyright 2000,
SUN-SENTINEL Unauthorized reproduction prohibited.
