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Palm Coast Thursday, Dec. 21, 2017 11 months ago

Construction is up but demand is higher

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Also: Town Center strategy and HBA Paradise home.
by: Wayne Grant Real Estate Editor

Real estate sales and prices rose in Flagler County last year, responding to a growing demand. But figures show construction is not keeping up with demand, which may lead to a housing shortage causing prices to increase even more.

About 1,000 units were constructed in Flagler County in 2017. (A unit is a single family house or one side of a duplex.) There were 770 in 2016.

“That’s the most growth since 2006,” said Jason DeLorenzo, government affairs director at Flagler Home Builders Association. He predicts the same amount of increase next year.

Recently announced new construction includes Sawmill, planned for 2,000 homes off U.S. 1 north of Matanzas Parkway. Construction could start in the third quarter by investor/developer Southeast Georgia Acquisitions

Toby Tobin, local realtor, cautions that even more construction is needed, saying housing is not keeping up with the predicted population growth.

U.S. Census estimates show a net gain of 3,122 new residents in Flagler County from July 2015 to July 2016, with 2,376 of those in Palm Coast. Using a standard calculation of 2.33 residents per dwelling, about 1,400 dwelling units would needed for one year of growth in the county, much more than the 1,000 units built this year.

“If we do not achieve a demand/supply balance, prices ‘to buy’ and ‘to rent’ will continue to rise beyond the rise in the consumer price index,” Tobin said.

DeLoranzo said builders could construct more houses but there is a labor shortage in the county.

Jeff Douglas, of Douglas Property and Development Inc., currently marketing Palm Coast Town Center as well as Grand Landings, said there is a need for more training for construction jobs. He said more educational opportunities and internships need to be available to provide an adequate labor force in the county.

The data shows the demand for housing. Through November, the number of sales through the Multiple Listing Service was up 2.14% over the same period in 2016, according to data provided by Tobin. He predicts sales will increase in 2018 by about the same amount.

Demand also drives up prices. The median price January through November, 2016, was $197,264; and the median price January through November, 2017, was $215,000.

 

THE NEED FOR MULTIFAMILY

 

No multifamily housing was constructed in 2017, causing concern for those who cannot afford a single-family home or don’t need that much space.

“We need a greater diversity of housing options,” Tobin said.

“We need a greater diversity of housing options.”

TOBY TOBIN, Realtor, on the need to accommodate all income levels

Housing is needed for those who service the cars, work at the restaurants, teach the children and do the other needed work in the area, Tobin said, and many are not in the market for a single family home.

At least 1,200 square feet and a two-car garage are required for a single-family home in Palm Coast, more than needed by a single parent, for example. 

Also, rising prices can make it difficult for first-time buyers and those at the low end of the market. According to recently released U.S. Census estimates, the median household income in Flagler County is $50,863.

One solution, Tobin said, would be for elected officials to allow smaller houses to be built.

Also, Tobin said, the government should allow more density for multifamily. Currently, only 12 units are allowed per acre, which can discourage a builder seeking return on investment.

Higher wages would help alleviate the problem. If there were more manufacturing, rather than service level jobs, workers would be able to pay more for housing.

On an encouraging note, Tobin said he knows of four multi-family properties that are in the planning stage, and there could be some construction next year.

 

TOWN CENTER PROGRESS

 

Douglas agrees with the growing need for housing, and said his company is “working diligently” to develop Town Center. He said a multifamily development is now in the works that will eventually have 180 units. Construction could start by the third quarter of 2018 if approvals are received from the city.

For Town Center development, Douglas said the plan is to develop rooftops to spur commercial growth.

“Housing comes first,” he said.

The infrastructure is in place and he believes the market will determine what is developed.

“We need to let the market drive the product and not some planner in San Francisco,” he said.

He said the original ideas for Town Center are largely obsolete. For example, not as much retail and office space is needed today because of people working and shopping from home.

 

HBA BUILDS SHOW-HOME

 

Flagler Home Builders Association had a groundbreaking Dec. 19 for Paradise at Grand Landings, a house that will be constructed by members of the HBA showcasing the latest technology and efficiency, and their craftsmanship. The construction of the house can be followed on flaglerdreamhome.com. Next fall, home shoppers can visit the home’s open house to learn about the products used. It will then be sold to support the HBA’s programs and selected charities.

Shown in the photo at the groundbreaking are Scott Sowers, Cline Construction; David Grussgott, Atelier Design Group; Anjanette Stevens, Professional Title; Roy Waldhauer II (HBA President) Waldhauer Pools & By the Shore; Jim Gonce, Builders FirstSource; Jeffrey Douglas, Douglas Property & Development; and Tony Amaral Jr., Amaral Homes and Pools.

 

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