Boynton development sells out phase one in 5 hours

By Robyn A. Friedman South Florida Sun-Sentinel Posted October 24 2006 Kellie and Mike Pilicer grabbed lawn chairs, a flashlight and a few magazines, then spent the next 13 hours waiting to buy a house. This was a familiar scene during the go-go days of the recent housing boom when people clamored for homes and condominiums before the first shovelful of dirt was turned. Ten months into a housing slump, here we are again: a developer promising to build affordable homes, prompting more than 100 people to camp out Friday night in Boynton Beach. The lure of prices starting at $311,900 -- affordable for a new home by South Florida standards -- brought the Pilicers and many others to the sales office for Greystone, the new development. The 134 houses in the first phase of Greystone, slated for a 144-acre site off Hagen Ranch Road, sold out in less than five hours Saturday, bringing in $50 million for builder G.L. Homes. The Sunrise-based company says it will deliver the first of the 552 homes by early 2008. Despite the recent downturn in South Florida's housing market, prices still remain out of reach for many people. But builders that cater to middle-income consumers will stay plenty busy, real estate analysts say. "[Greystone] is a clear indication to me that if you meet the affordability level of buyers, you'll be a very successful builder," said Anthony Trella, a homebuilding consultant in Broward County. "If you marketed 10 more of these projects, they would all sell out. There is more demand than builders can fill."

However, most area builders are accustomed to delivering homes that cost $400,000 or more. They'll continue to suffer through a slump in new orders, which experts say could last into 2008. G.L. Homes says it pressured subcontractors to keep costs down at Greystone. It's touting the development as affordable for teachers, police officers, firefighters and other municipal workers, but many might still have trouble qualifying for mortgages there. Teachers in Palm Beach County, for example, earned an average salary of between $40,747 and $54,343 last year. In Broward, the salary range was $42,887 to $52,537. G.L. says someone buying a typical four-bedroom Greystone house through its lender with a 20 percent down payment and a 30-year fixed-rate mortgage could expect a monthly payment of $2,397. That includes principal, interest, taxes and insurance, but not the $141 monthly homeowners association fee. An interest-only adjustable rate mortgage, with a similar down payment, would cost $2,129 a month.

David Dweck, a real estate agent in Broward and Palm Beach counties, estimates that 20 percent of the people who signed contracts at Greystone ultimately will back out of the deals. "That's not workforce housing," he said. "That's affordable housing in relative terms in today's marketplace." Both existing and new home sales across South Florida have been down this year after the five-year boom. West Palm Beach housing analyst Brad Hunter said this month that existing home sales could pick up in the next three to six months, but it might be 18 months before new home sales rebound. The rising costs of land and construction make it difficult to build more affordable single-family homes in Palm Beach and Broward counties. To build less expensive homes, builders are delivering townhouses here or going to St. Lucie County, where land isn't as pricey. Builders say they aren't surprised by the success G.L. had at Greystone.

"They marketed that community very well," said Jason Shelley, co-owner of Shelby Homes in Fort Lauderdale. "Anybody that can produce a home within the affordable parameters hasn't experienced a slowdown that other market segments have," added Jeffrey Auchter, vice president of marketing for Centerline Homes in Coral Springs. While demand at Greystone was brisk, that isn't the case at some of G.L. Homes' other subdivisions. "At most of our communities, the price point begins at $400,000 and up, and in those price ranges, the market is a little bit slower," said Marcie DePlaza, division president of G.L. If the market were stronger, the company might have put more expensive houses on the Greystone tract, DePlaza said.

"Obviously, we want robust sales, so we're going to give the market what it's looking for," she said. "It wouldn't make business sense to bring homes onto the market at $1 million if the market's at $300,000." After camping out, the Pilicers ultimately found a four-bedroom home with a two-car garage for $367,900. They plan to sell their $250,000 townhouse in Boynton Beach and use about $100,000 of the proceeds to pay down their mortgage at Greystone. "We've been looking for a larger home for about eight months, but everything in our price range was either a condo or a townhome," said Kellie Pilicer, 31, director of marketing for a wholesale flower nursery. "Now we can afford a house."