Developers: Luxury demand insatiable

February 25, 2005
Section: B SECTION
Page: BM1
DALE WHITE dale.white@heraldtribune.com

Buyers' demand for luxury homes in the Sarasota-Bradenton area seems insatiable for the foreseeable future, a panel of developers agreed at a Thursday forum.

Penthouses that would have remained empty showcases a few years ago now sell quickly. New condo complexes sell out before each phase is finished. Waterfront soil may as well be priced as if it were made of gold. Yet the same factors that are making the market for upscale houses and condos so robust will continue to make it increasingly difficult to create housing for working people without fat incomes.

Michael Saunders, a real estate agent who specializes in upscale homes, invited 10 developers to join her in a discussion about real estate trends during the Coastal Living Showcase, a daylong series of presentations for new home buyers, interior designers, the media and others.

Saunders said that homes in the $250,000 to $500,000 range are now selling within 2.5 months of being put on the market.

"A year ago, we probably had a six-month supply," Saunders said.

The developers insisted the market is getting pricier because it is getting tighter. They cited a scarcity of affordable land and an abundance of governmental regulations.

"Sarasota County has always been pretty conservative over the years in the terms of zoning," said Jay Tallman of U.S. Assets Group, which is developing Orchid Beach Club and The Founders Club. "Now we're paying the price for that. When land is scarce, it becomes more expensive."

Tallman insisted that Sarasota County's restrictions on density have contributed to suburban sprawl.

The demand for homes doesn't cease because of density restrictions, Tallman said.

"Where's it going to go? It's going to spread out," he said.

Developers who pay steep prices for land are going to build expensive homes there, in part to recover their land costs, said Sam Hamad of Enterprise Associates of Sarasota, which is developing Marquee en Ville.

If local government wants to see developers create more lower-priced housing, it should exchange density limits (the maximum number of homes that can be built per acre) for square footage limits, Hamad said.

That way, developers could build more homes on the same space, but some of those homes could be smaller and less expensive.

Despite soaring land prices and sometimes entangling government regulations, developers will keep building here if consumers are willing to pay top dollar, the panel said.

"If there's a market, there are going to be developers," said Brian Nichols of Snavely Development, which is building Summer Cove.

But the cost of building homes and the prices that homeowners can expect to pay will most likely only go up.

And that still leaves the unsolved problem of providing work force housing, said Jan Smith, developer of The Promenade on Bradenton's riverfront.

"If the service sector can't find a place to live," Smith said, "we're going to have an abundance of problems."

Caption: Michael Saunders put together the panel of 11 developers for the program.