The Grand Strand’s housing market is beginning to awaken from a long nap during the great recession, but planners are noticing that there appears to be new trends in the industry that are a result of the economic downturn that began in 2007.
The homes that builders are looking to build now are smaller and less expensive than those in the boom days prior to the recession, and they are building fewer in one construction phase than they did in the good times.
A briefing paper prepared recently for the North Myrtle Beach Planning Commission said there is now “a distinctly different product, reflecting what the current mortgage market will support. In almost every case, the new product has been less impressive in size and design, and less costly than what was previously approved.”
The challenge that comes with the new priorities is that, for projects that started before the recession and have lain dormant for several years, there is a chance a subdivision will have two very different housing types, and that could have financial implications for owners of the existing homes.
The Planning Commission recently considered just such a situation in a subdivision now called Tuscan Sands in the Barefoot Resort development.
Formerly known as Villa D’Este and/or Legacy Estates, the subdivision was originally planned as apartments or condominiums by the Fairfield Time Share Co. In 2005, the city approved a zoning change to single-family residential and a series of architectural drawings by Centex to be used as reference during the permitting process.
The styles appeared to be neo-Mediterranean, according to the city’s information. Two homes were permitted in 2007 but the project failed as the real estate market collapsed. The Villa D’Este/Legacy Estates developers now are facing bankruptcy and mortgage fraud allegations in court. Those developers are not associated with the latest proposal.
According to a letter to the city from DDC Engineers, D.R. Horton had purchased or planned to purchase a total of 19 lots in the subdivision and wanted to construct homes in the traditional style.
The letter suggested that the city might want to allow for buyers to be given a choice between traditional and the style of the two homes already in the subdivision.
Shep Guyton, attorney for D.R. Horton, said during a Planning Commission workshop that the two existing homes were as much a departure from Centex’s original drawings as was that proposed by his client. They were smaller, to begin with, and they didn’t strictly stick to the Mediterranean style of the exiting homes.
Smaller was OK with commissioners, but they wanted a look in the new homes more like that of the existing homes. They gave D.R. Horton a list of five must-have architectural elements the homes must have to get the city’s approval.
The new homes would be smaller than the existing homes and the city required D.R. Horton to incorporate tower structures within the homes’ designs to give them a vertical feel that would blend with the two homes already in the subdivision. The existing homes are each three-stories high and the commission wanted the new models to blend somewhat with them.
“You probably won’t see a three-story house like those other two unless somebody walks in and says ‘I want three stories,’” commission chairman Pat Nobles said during the workshop.
But it’s not just smaller homes developers are seeking as home construction activity returns, said Janet Carter, Horry County’s planning director. Builders are now building homes in smaller numbers in one phase of a development than before the recession. At that time, she said, developers would seek permits to build 120 homes at a time; now, she said, it’s more like 12.
At Tuscan Sands, D.R. Horton wants to build just nine homes.
It may buy another 10 lots in the subdivision and get permits for them separately.
But cities are happy to see any homebuilding activity now, North Myrtle Beach spokesman Pat Dowling said.
The city will get some new revenue through property taxes once the homes are built as well as a minimum take from hospitality fees as new residents eat out. Dowling said the city really doesn’t make any money on property taxes as most of what comes in is used for services for the new homes.
But the real payback, he said, is on things that may not provide direct income to the city. He said that construction and new residents will stimulate the need for more privately-owned businesses, which could stimulate new business start-ups and commercial construction.
“Anytime we see positive development,” Dowling said, “that’s a good thing.”