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Farther Afield 04/07/2006

Publication: Birmingham Business Journal
Author: Kija Wilkinson

Whether seeking old-world luxury or a peaceful, reasonably-priced place to retire or raise a family, Birmingham-area house hunters have a wealth of options.

In some markets, however, land is getting scarce, so those dead-set on a single-family home in or near the city limits had better act fast, real estate watchers say.

And it's not only land in Birmingham, Homewood and Mountain Brook that is dwindling. Some fast-growing suburban cities are likely nearing the end of their new-home lifecycle. In some developments, homes are selling almost as soon as they hit the market.

Helena, for example, is seeing fewer home starts. According to Huntsville-based research firm Southern Exposure Information Co., there were 334 new homes built in Helena in 2004, and only 245 last year. And with 40 new homes built in the first three months of 2006, the city is on track to log only 160 this year, less than half the number from two years ago.

"They are surrounded by Pelham and Alabaster and really can't annex any more land," says Buck Barnhill, owner of Southern Exposure. "They will stop growing altogether in the next few years."

As Helena prepares to max out on new-home construction, homes within certain centrally located developments are going fast.

The example most often cited is Ross Bridge in Hoover, where nearly all the homes that have been put on the market have sold. Considering the fact that the community hit the market less than a year ago, it's an outstanding record, says sales manager Dorothy Tayloe.

Hoover housing starts have been strong overall, with 864 new homes in 2004, 684 in 2005 and 178 so far this year, which would translate to 712 for 2006 if the pace holds steady. Ross Bridge has been a big contributor to those numbers.

At Ross Bridge, 89 of 97 patio homes, which start in the mid-$200,000s and are being built by HPH Properties LLC, are under contract at Abbeyglen, and 53 have been completed.

In Signature Homes' Greenside and Freestone Ridge, which will ultimately have more than 100 homes that start in the low $300,000s, 88 houses are under contract and 37 have been finished. "They have bought more lots and will be bringing more product on in the summer," Tayloe says. Indeed, Signature plans to develop an undetermined number of homes in Ross Bridge's Village Center and will build more than a dozen homes along the prominent Grand Avenue entrance to the Renaissance Ross Bridge Golf Resort & Spa.

These will echo the grand Victorian houses of turn-of-the century San Francisco, says Signature senior vice president Barry DeLozier. Prices have not yet been set, but none are likely to reach the seven-figure mark, he says.

DeLozier says the appeal of Ross Bridge, one of the "last frontiers for infill," is a no-brainer. "There's a buzz about it," he says, noting the development's proximity to downtown, Homewood and the University of Alabama at Birmingham.

Signature, one of the first developers to build at Ross Bridge, plans to move its headquarters there in fall 2006, making it one of the first commercial residents of the town center. The new-urbanist, mixed-use style of the vast development, along with its world-class resort and golf courses, are a big part of the development's appeal, says DeLozier.

He says throngs of potential homebuyers are drawn to the train-station style sales center each week. "It's like a tourist destination in Birmingham already," DeLozier says. "With it being written up in places like the Robb Report, people realize there's this whole part of town they've never been in, and they want to go out there and see it."

There will soon be plenty more to see as several custom builders are building spec homes within the Butler Springs community, which will ultimately have 67 houses that start in the mid- to high $500,000s. Fifteen are under contract so far. Tayloe says she is looking forward to seeing the spec homes.

"It's nice to have all these sales, but it will be great to put some product on the ground that people can come and actually tour."

Ross Bridge options are steadily expanding. Based on the response to homes in Bellevue, where 11 homes in the mid $400,000s are under contract and 13 are under construction, a community called Haddon will be unveiled later this year. It will consist of about 130 single-family homes with basements and will likely include several builders. These homes will be located across from the historic bridge that gives Ross Bridge its name. As in all Ross Bridge developments, a park will be incorporated into the Haddon design.

In-town luxury, for a price Closer to town, several new projects offer old-world style and modern comforts at a premium. Among them: Highland Crescent, 20 $1 million homes in Highland Park being developed by Jack Fiorella; Hollywood Manor, nine homes in Homewood just off U.S. Highway 31 ranging from $750,000 to $1 million-plus, a project by Jay Moss; Abbey Road, nine carriage-style houses that start at $850,000 on Red Mountain just below Vulcan Park being developed by Dungan Nequette Architects that will also house the firm's headquarters; and Highland Heights, a development slightly larger than Abbey Road that is a joint venture of Dungan Nequette and The Carroll & Green Group Inc.

All the homes in these projects were designed by Dungan Nequette.

Says Carroll & Green principal David Green: "If the dirt wasn't so expensive the no-brainer would be to find some landlocked area, buy a piece of it and put some even $300,000 homes there. That would sell all day long, but the land really dictates price on these projects." That means bargain hunters typically buy in the suburbs. For them, there is a growing number of homes to choose from east, south and north of the city center.

RE/MAX Southern Homes agent John Mejia sells houses throughout Shelby County and down the U.S. Highway 280 corridor and says buyers who want more for their money look to Chelsea, which he says is home to roughly 10 new subdivisions.

But prices there are inching up. Three-bedroom, two-bath houses that had price tags in the $190,000s two years ago now sell for the low to mid-$200,000s. The trend has pushed some home hunters farther out, he says.

Custom homebuilder Clay Branum, who left a career as an engineer with the National Aeronautics and Space Administration nine years ago to start his company, Clayssic Home Innovations Inc., is building as far out as Harpersville in east Shelby County.

Homebuilders head south

New development is also pushing farther south, with Calera continuing to rank among the fastest growing municipalities in the state in terms of home starts. Southern Exposure figures show that Calera had 232 home starts in 2004, with the number nearly doubling in 2005 to 419. So far this year, Calera has reported 132 starts, and that number will grow to more than 500 by year's end at its current pace.

HPH Properties is part of the trend, with The Reserve at Timberline and Savannah Point steadily growing.

Garden homes at The Reserve, which is off Interstate 65 at the Calera-Montevallo exit, are priced from about $140,000 to $215,000. Sales manager Scott Underwood says phase one, which consists of 150 home sites, is "the first of many to come."

Adjacent to a Jerry Pate-designed golf course, all but 30 to 40 phase-one lots have been completed and about 50 have already sold. They range from 1,400 to 2,800 square feet. "If you do the math, it's a great price per square foot in a master-planned community like that," Underwood says.

In Savannah Point, a more established HPH development in south Shelby County two exits north of The Reserve, 53 homes are being added to the 375 that have been built and purchased. Sales have just started on the newest homes, which range from $140,000 to $215,000. And with HPH acquiring land for 1,000 additional home sites, the community is poised to grow exponentially.

Affordability north of town

Buyers seeking a less brutal commute might want to look northward, where several communities are blooming, though to a lesser extent than those in the south and east. Trussville saw home starts drop to 311 in 2005, down from 455 the year before. But the city seems to be back on track with 205 so far this year.

In addition, Gardendale, directly north of Birmingham, is seeing considerable activity, with 204 new homes in 2004 and 167 last year. The city has reported 57 so far for 2006, on track to top the two previous years.

Only 15 minutes from the city, Gardendale "has been that sleeper community, that hidden treasure," says Underwood.

Some buyers are realizing this; approximately 60 buyers have snapped up homes in HPH's Lexington Park development there. About 100 houses have been started, and 40-50 are occupied by their new owners. Prices range from the $140,000s to $220,000.

With 900 acres off Interstate 65's Fieldstown Road exit, Lexington Park has lots of room to grow. There are more than 400 home sites in the first phase alone. HPH also has plans for a pool and nature trails.

These grand plans aren't based on pipe dreams. "We hardly have been able to get them on the market before they're sold," says Underwood.

"There are beautiful views; you can see for 30 miles in some places. It's got a lot of green space and hills that make it real interesting."

kwilkinson@bizjournals.com | (205) 443-5637