Sunday, July 04, 2004
Peter Gebert experienced sticker shock buying a new house in the San Francisco area in the early 1990s. The prices seemed outrageous compared to those near his former job in midwestern Canada.
-Last winter, Gebert went house hunting again - this time in Huntsville. Compared to California, houses here are a steal, he said.
"When I moved from Canada, it was a culture and economic shock getting into the Bay area. Coming this way was just the opposite,'' Gebert said last week.
Gebert had plenty of new houses to choose from. Low interest rates, coupled with a steady economy and an abundance of good-paying jobs, have fueled the biggest residential construction boom in Huntsville since the 1960s, when people came here in droves to help America beat Russia to the moon.
Records show almost 22,000 houses have been built in Madison County since early 1995, with the biggest clusters in Madison, Harvest-Monrovia, Hampton Cove, Big Cove and Riverton.
The homebuilding industry is headed for another banner year. Through the end of May, city and county officials had issued nearly 1,400 building permits for single-family homes. Hundreds more homesites have been OK'd for future construction.
Developer Jeff Enfinger, meanwhile, is planning to turn a 1,600-acre soybean farm along the Flint River into a swanky 1,000-home subdivision called McMullen Cove. It could eventually rival Hampton Cove as North Alabama's biggest neighborhood.
Three other major subdivisions also have been announced or are in the early planning stages. One is being eyed for a tract off Hobbs Road in southwest Huntsville, another is just getting started in Meridianville and the third is being considered for a field off Steger Road near Hazel Green. Combined, they'll have at least 800 houses.
Richard Van Valkenburgh, a local real estate agent, said civil engineers in town are working themselves ragged trying to keep up.
"They're busy, busy, busy," he said.
Pleasantly surprised
Gebert, 48, began his house search here after being promoted last November to vice president of finance and administration for Nektar Therapeutics. The California-based biomedical firm has an office in Cummings Research Park.
Gebert toured several high-end subdivisions, including Hampton Cove, Highland Lakes and Clift's Cove, before choosing a 3,100-square-foot home in Providence with all the trimmings: built-in mahogany bookcase, hardwood floors, crown molding.
He loved the west Huntsville neighborhood's pedestrian-friendly layout and its wide porches. Another plus was the thought of having restaurants and shops in a planned village center just a few steps away.
"I had heard about these types of developments in other states," Gebert said, "and it really appealed to me to get a place where I know I'll get to know my neighbors."
He wasn't fazed by the roughly $400,000 pricetag. The same home in San Francisco, Gebert said, would go for about $2 million. Not to mention much higher property taxes.
"I've had some very pleasant surprises," said Gebert, who moved into his new place Tuesday.
He isn't alone.
Condo to castle?
Every year, the city's high-tech firms import hundreds of white-collar professionals from cities such as Boston and Los Angeles, where a quarter-million gets you a cramped condo next to the freeway.
That same money buys a castle in Huntsville.
"The market has pushed us into building larger houses," said Jeff Benton, a local home builder. "Our demographic can afford it, and they want it."
David and Judy Thuss fit that description. The retirees from Flemington, N.J. - he's a former iron worker and commercial glider pilot, she a librarian - are leaning toward building a 2,200-square-foot house in the Bridges on the River subdivision off Homer Nance Road. The model they like best has a center island in the kitchen and a stacked-stone fireplace that roars to life with the flick of a switch.
Like Gebert, the Thusses were stunned to find out how much more house they can afford here than in the New York suburbs. And their Madison County property tax bill would be only a fraction of the $7,000 a year they paid up North.
Huntsville wasn't on the couple's radar until their electrical-engineer son, Todd, moved here in 1999 for a job at telecom company Adtran Inc.
"Todd and his family love it here, and that kind of got us hooked," David Thuss, 63, said Friday. "Huntsville just seems like a nice, open town. Easy to get around, too."
Recent transplants aren't the only ones in the market for a new house.
Madison County's median household income of $44,704 is among the highest in the Southeast and easily trumps the national average. Many young couples who moved here in the early '90s are now making enough money - or inheriting money from their Baby Boomer parents - to shed their starter home.
Low home-mortgage rates - averaging about 6.25 percent for a 30-year fixed loan - have helped make that decision easier. Wednesday's action by the Federal Reserve board to boost the rate banks charge each other for overnight loans could actually help home sales, economists say, as buyers scramble to get their dream house before interest rates go up.
Up, up, up
The vast majority of houses being built around Madison County today carry a pricetag of at least $175,000. In Madison and Hampton Cove, developers are focusing almost exclusively on homes over $200,000.
"We're seeing bigger houses, more complex houses," said Matthew Danner, the county's chief building inspector. "I really don't know when it's going to stop."
With so much high-end construction, families with low-end budgets are finding fewer housing options. As of Thursday, there were 924 houses for sale in Madison County with a list price of $150,000 or more, but only 281 that could be had for $125,000 to $150,000.
Madison, in particular, is quickly becoming unaffordable for many families. The average price of all the homes sold there during May was $224,849, according to the North Alabama Real Estate Information Systems database.
It was only slightly less in Monrovia ($180,647 average May sales price) and southeast Huntsville ($176,187).
Joe Murphy, whose MarketGraphics Inc. tracks home construction for developers and banks, said half-acre residential lots in Madison are fetching about $40,000 - roughly double the price of just three years ago.
The reason: Madison, which is hemmed in by Huntsville's city limits, is running out of room for more houses. Flat, buildable land is also at a premium in the county's other residential hotspots.
Said Benton, the home builder: "There's a convergence going on, kind of a rush to control land."
Based on recent growth, Murphy predicts 16,150 new houses will be built countywide between now and the end of 2009, consuming roughly 7,500 acres. That's about three times the size of Monte Sano State Park.
Given the finite supply of land, Murphy says space-saving townhouses and patio homes are the wave of the future.
"I think Providence is kind of a precursor of that," he said.
Providence developers David and Todd Slyman plan to squeeze about 1,000 houses, condos and loft apartments, plus restaurants, shops, a movie theater and a school onto just 300 acres.
The Redstone factor
Huntsville's future is closely tied to whether Redstone Arsenal can avoid the chopping block in the next round of military base closures, scheduled for 2005.
Builders and developers are betting the Army will spare Redstone, which prospered during the last round of military reshuffling in 1997, absorbing the Army's Aviation and Troop Command and its 1,600 workers from St. Louis.
If Redstone grows again, local carpenters, painters, tilers and roofers can count on staying busy for years to come.
Murphy said there's some concern among developers that if Massachusetts Sen. John Kerry beats President Bush in November, he'd scale back the Army's missile-defense programs. Much of that work is done in Huntsville.
But Sandra Steele, president of Enfinger Development Inc., said she thinks Redstone stands a good chance of gaining jobs through the Base Realignment and Closure, or BRAC, process.
Uncertainty about Redstone hasn't hurt retail growth. Several major chains, including Target, Costco and Dick's Sporting Goods, have opened Huntsville stores in the past couple of years.
"My feeling," Steele said, "is we're posturing ourselves" for more growth. "These are all indications of a vibrant community."