They Rise Again
Return of the Spec Homes
Spec House—short for “speculation,” usually refers to houses built by developers, designers or contractors for the sole purpose of selling at completion of construction. These residences tend to be staged with appliances, furniture and occasionally dishes and towels but those finishes vary greatly. South Florida has a long history of real estate speculation going back over 100 years. Entrepreneurial developers, contractors and designers create modest or amazing homes here in paradise for out-of-town transplants to buy. Many of these homes have been built in Lighthouse Point over the years and their number has risen and fallen with economic conditions.
The economic crash of 2008 effectively eliminated construction loans for these types of projects. “No one has done spec houses since Hurricane Wilma back in 2005,” according to Roger Zahn, Sr. of Zahn Builders. Roger and his son Roger Zahn, Jr. are second and third generation local builders with a contemporary house that will be finished, and likely sold, by press time. Lighthouse Point itself has seen a boom in building. In 2014, 18 permits were issued by the city for new single-family homes. In the first two months of 2015, three new single-family homes have been approved, and 14 are being reviewed. This dramatic increase solidifies Lighthouse Point’s reputation as an exclusive, well-located and highly desirable community. Some of these new homes are custom homes —built specifically for an owner that will occupy the house upon completion. Most, like the four currently under construction by local builder Marc Tetzner, are on speculation.
Local realtors Cathy and Jack Prenner have sold many spec houses over the years, along with traditional homes, tear-downs, vacant land and condominiums. “The timing has to be right for these properties. The developers are taking a big risk in hopes of a nice profit to be sure, but the economy needs to be improving, the banks need to be lending and home buyers need to see the price of the new home as reasonable compared to existing homes. Those factors are not always in alignment but now seems to be a good time.” “We were one of the first to recognize the pent-up demand,” according to Zahn, Sr. After years of tight lending practices, banks seem to be lending more. This fact, combined with the record stock market have fueled demand for housing upgrades into the range where speculators can profit. “Timing is everything,” according to Scott Godoy of Summit Builders of Florida who recently finished a coastal inspired project on the oak-tree-lined Marina Drive (NE 27th Street) in the highly desirable Marina area. Scott has been building custom and spec houses locally for over 27 years. Summit Builders of Florida specializes in custom designed homes built with careful attention to detail, quality, and efficiency. Godoy has built over 245 homes to date, with prices ranging from $1 million to in excess of $7 million.
Last year, local interior designer Bridget Conway designed a $4 millon-plus spec home and managed the construction showing that skilled professionals from various real estate disciplines can be profitable in these endeavors. Godoy partnered with Conway to design the 7,200 square-foot Marina Drive house seen in this feature. The house has over 5,300 square-feet of air conditioned space, five bedrooms, and six bathrooms. Although hard to qualify with statistics, buyers range widely. Some are comfortable with a ‘fixer-upper’ while others have no interest in even selecting furniture and prefer to purchase a home ready to move in and start entertaining. “I’d say 80 percent of buyers have limited ability to envision a beautiful home from empty rooms and bare walls. Developers like Scott Godoy, with the help of designers like Conway, make buying a very expensive home much easier for many by showing them exactly what it will be like to live there,” according to Prenner.
“Buyers want quality for sure,” said Godoy but syle is another component to the new wave of spec home building. The latest coastal contemporary and even contemporary have taken hold quickly in the marketplace. “We’re all in shock at how fast the trends changed,” said Roger Zahn, Jr. who worked with his father on their 23rd Terrace house but is also currently serving as general contractor on other developer’s projects in the area. Besides style, buyers are also seeking two other significant features according to the Zahn’s. “People want the indoor/outdoor living,” said Zahn, Sr. as we sit a few feet from the massive sliding glass doors that open to effectively double the size of the living room out into the pool area. The Summit property also has large, pocket doors that open completely and disappear, allowing the living space and pool area to become one large space.
The other big part of these modern homes is technology. “This whole house is controlled from your iPhone,” stated Zahn, Jr. pointing to an app on his device. The thermostat, lighting, motorized shades, music and other systems are all wired into the structure requiring no retrofitting as would be needed to update existing older homes.
No story on spec houses would be complete without mention of location. “Site selection is key” stated Zahn, Jr. emphatically. His projects usually have the back yards facing east to take advantage of the cooler breezes from the ocean for example. The Summit Builders property is surrounded by several amazing homes while being a boaters dream location with ocean access in just a few minutes away.
Summit Builders next Spec property will be on the Intracoastal on NE 31 Avenue in Lighthouse Point and will be completed in 2016. The economic ups and downs of the marketplace will dictate how long this trend lasts. But surely, all of this construction is a good sign for residents, business owners and city leaders.