Buyer confidence rebounds locally

A new look STAFF PHOTO BY MURRAY JUDSON A former laundry that has sat vacant and deteroriating for more than 15 years has been reborn as The Shops at Beach Street. It is among changes visitors to Port Aransas will see this Fourth of July holiday weekend. From the standpoint of a veteran with nearly 40 consecutive years of selling real estate in Port Aransas to one who has 10 years under her belt, the conclusion is the same: The real estate market has hit bottom in Port Aransas, and it’s bouncing back.

Unless a property owner bought real estate here between 2004 and 2006 when prices peaked, sellers stand to make more than they paid and buyers stand to get a good deal.

That is the opinion of Mark Grosse,who has been selling Port Aransas – uninterrupted – since 1972.

“I may not be the oldest broker in town, but I’ve been doing it longer than anyone else,” Grosse said, adding that at 62 he’s getting closer to being the oldest.

STAFF PHOTO BY MURRAY JUDSON Moving forward Workers prepare for concrete work at Village Walk II on 11th Street. As confidence that prices have gone about as low as they will go, and sellers are motivated, properties are selling again in Port Aransas. On the other end of the spectrum is Addie Belcher, 29, owner of Whitten Real Estate and a broker for 10 years.

Belcher said that during that decade she has sold the some properties five and six times, “and the sellers made money.”

Both are of the opinion that the economy – at least in terms of how Port Aransas real estate is concerned -- is in recovery.

Real estate prices peaked in 2005, according to Grosse, “when things got crazy. Prices went up, exponentially, on everything from residential to commercial, raw land, anything.”

MARK GROSSE Prices bounced back and forth in 2006 and 2007, then 2008 saw a downward trend, he said.

“A lot of things affect real estate in Port Aransas,” Grosse said. Even though Hurricane Ike in September 2008 didn’t hit Port Aransas, “people got nervous about the coast.”

Ike was followed by the financial meltdown and the plummeting stock market, “and people got nervous. For a little while it almost stopped our market,” Grosse said.

The real estate veteran quoted a former Port Aransas mayor, Ed Tarrant, after whom Tarrant Street is named, who was known for saying the “selling season” in Port Aransas starts at Easter and runs through June.

“Historically, it’s been that way, although we sell year round. This year, that was delayed two months,” Grosse said.

Instead of starting in mid-February, nothing happened until mid-April.

ADDIE BELCHER “In March, nothing went on, and we wondered if the phones were working. Now, we’ve become quite busy,” Grosse said.

The buyers are here – they’ve been here, according to Grosse, “but they’ve been reluctant to do anything. Even if they could afford to, they didn’t want to be unwise.”

“It took a while for everybody to step back and get comfortable,” he said.

Belcher concurs. “We have had a lot of sellers realize the market has declined, and they reduced their prices and that initiated buyer activity. Sales have picked up. The last few months have been solid across the board from small to large properties,” she said.

No doubt prices have come down from their peak in 2005, some more than others, according to Grosse.

An extreme example is the Terramar Tracts on State Hwy. 361 south of Port Aransas. Grosse qualified his remarks, saying he didn’t handle those transactions, but said those 12-13 acre tracts sold for more than $5 million in 2005, and now they’re priced at $3 million with no takers. Some of those tracts are down 50 percent from their peak prices, he said.

More traditional properties have not experienced such radical drops in values, especially those with existing structures, Grosse said.

Residential lots have probably experienced a bigger drop in price because there is more inventory in that category, he said.

“Still, it’s not like there are not people looking for property. We’ve had really good months for the past two months – maybe not relative to 2005” when prices topped out, Grosse said.

In the summer of 2009, “we’re finding the bottom – as they say in the stock market. People are comfortable and starting to buy,” he said.

Some overpriced properties will have to come down in price or wait a long time to sell; others, Grosse said, are priced correctly for the current market and they’re selling -- “maybe not like hot cakes.”

The Port Aransas real estate market is unique in that so many sales are cash and/or are for second homes. In other words, people are buying things they don’t need, but things they want, “so they need to be comfortable in what they’re doing,” Grosse said.

“They’re getting comfortable with the market,” he said.

Belcher won’t argue with that.

She says she is showing and selling properties and “we’ve got a full roster of things under contract.”

“We’ve recovered. The only thing lacking is good condo financing,” she said.

“Once we get new avenues opened up there we’ll rock and roll. Balloon notes are available, but people are fearful of them – they’re not willing to risk refinancing in three to seven years. Lenders are working on that,” she said.

Meanwhile, “We’re making a lot of cash sales with people who are taking advantage of prices being down,” Belcher said.

“I’m excited. I’m not good at predicting, but I would see it (the real estate market) as leveling out and staying at this level for a year or two, then making a gradual increase,” Grosse said.

Some prices may go up quickly, such as those for which there is a large demand and not much supply, Grosse said.

“I’m excited in terms of the worst is behind us and now it’s going to find equilibrium between buyers and sellers. It’s a great time to be buying because there are of plenty of options,” he said.

He compared real estate to the stock market: Those who jump in early do well and others who are gun-shy miss the boat.

During the oil bust and savings and loan crisis of the 1980s, Grosse said very few bought property at auction even though there were good deals to be had.

“Those who did buy in depressed times came out the best. We’ll see some of that now,” Grosse said.

Buyers “won’t find a better time than now, and maybe in the next six months to a year, then things will get tighter, there will be less to buy and prices will be higher. Now, interest rates are down, and prices are down,” he said.

Despite the slowdown, projects that have been on the drawing board or under construction have carried on. Some represent major changes to the landscape, while others just add a finishing touch.

One major change visitors to Port Aransas on this Fourth of July holiday weekend will see is the absence of an eyesore of some 15 years.

Built in 1972 as Country Clean laundry, the property on Alister at Beach Street has sat vacant and deteriorating since the facility closed in late fall of 1992, according to former owner Ralph Keene. The land and buildings on it – there are two ancillary buildings to the laundry itself that have housed a variety of businesses (including Mark Grosse Real Estate) – were bought about three years ago by John Erwin of Ocean View Property Group of San Antonio.

Initial plans to develop the old laundry into a mixed retail-residential use met a dead end because of city zoning ordinances.

This spring, signs of life began to appear as a total renovation of the space got under way.

Melissa Shook, owner of Fire It Ceramics, which anchors what is now called The Shops at Beach Street, oversaw the project.

The old washing machines and dryers were hauled out, and the walls were stripped of paneling, insulation and wiring.

“We took the building to the rafters,” Shook said.

New wiring and plumbing were installed, as was a new roof. Customers now arrive via a new parking lot and are greeted by freshly planted landscaping.

Erwin described the three-year project as “a long journey” that was “very intense.” It paid off, he says, because “there’s not a better spot in town.”

The ceramic shop has been joined by Silver King Jewelry and The Donut Palace. With Donna’s Sewing continuing to occupy the free-standing building on the southern perimeter of the property, and a tie-dye t-shirt shop in the building on the northern edge, the center is fully occupied.

Erwin said, “We could have built brand new stuff, but that’s not in the character of Port Aransas. We made a decision to keep the old style and integrity. It’s nice to see character. Port Aransas stands for history. Either you have a taste for it, or you don’t.”

Other changes may not be as dramatic as the old laundry. Many properties were in the construction phase at this time last year and now have been completed, are wrapping up construction, or are seeing a new surge of activity.

Among them:

• Newport Dunes Golf Club, on State Hwy. 361 across from the Island Moorings canal residential development, opened in September. The 18-hole links-style Arnold Palmer signature golf course has hosted two local benefit golf tournaments, several private tournaments and remains open to the public.

The accompanying residential and commercial development is expected to follow soon.

• The Ferry Landing Center at the corner of Cotter Avenue and Cut-off Road was under construction at this time last year, and is now complete.

Realtor/broker Marcus Starkey said current tenants are Deep Splash, a t-shirt and souvenir store, and Happy Days, a tobacco accessory shop. The two tenants occupy 12,000 square feet, and there is another 8,000 square feet available for lease, Starkey said. Of that space, 3,000 square feet is designed for a restaurant, and the remaining space is for retail. The area available for lease is the strip building on the east side of the property.

Developer is ETNG Real Estate of South Padre Island.

• American Bank, 216 S. Alister St., has just completed an expansion that nearly doubled the square footage and extended its drive-in banking facility, adding two lanes for a total of four.

“We had outgrown our building and had to lease space next door,” said George Horner, branch president. “This brings us into one building and gives us room for growth, which we anticipate.”

• The Tower Center, 1726 State Hwy. 361, was completed last fall. Occupants are My Coastal Home, a home furnishings and accessory store that relocated here from North Padre Island; Aston Design, which sells flooring and countertop materials and expanded from its Corpus Christi location; Kitchens Plus, which offers kitchen design services and custom cabinetry, which moved from The Shops at Port Aransas; Felder Gallery, an art gallery that relocated from Rockport; Miss K, which, in addition to offering eat-in breakfast and lunch, offers gourmet food to go and catering, which relocated from its former location in Old Town; and Amano, which sells imports from central and southern Mexico, and also relocated from its Old Town location.

Three spaces in the property are still available for lease. Two are adjacent 1,235 square-foot spaces, and the third is a 1,140 square-foot space at the front, center of the building and is under consideration for lease by a potential tenant.

The developers are Nathan Clark of San Antonio and John Hooten of San Antonio who built The Shops at Port Aransas, a center located on the other (east) side of the highway from the Tower Center.

• Mark Grosse Real Estate has moved into its new quarters, a two-story building at 155 W. Cotter, between the South Jetty newspaper and Oceans of Seafood. The newly constructed building is awaiting the finishing touches that landscaping will provide.

• The Palmilla, 3628 Island Moorings Parkway, anticipates construction will start in the near future, according to sales associate and real estate agent Suzanne Brayman.

The development, located next to The Moorings at Island Moorings, will feature resort condominium homes from the $400s. The Koontz McCombs venture will include 94 waterfront condominiums. Among amenities are private boat slips, a pool, fitness center and shared outdoor kitchen. It features gated access and covered parking.

Brayman said reservations are still being taken.

“We feel very good about everything,” she said, referring to what the development has to offer to people wanting to come to Port Aransas.

• Pirates Bay Resort, on State Hwy. 361 next to the new Snappy Foods convenience store, has been redesigned since it was first announced.

Alex Harris, of Brite Star Construction on North Padre Island in Corpus Christi, said the project has been changed from a 33-unit complex to 60 cabana units with an Easter Island theme to the pool and grounds.

Phase 1 will include 24 two-bedroom one-story cabana-style town homes. Each will have a private patio and one assigned boat parking space. The 1,000 to 1,100 square-foot homes start at $159,000 with pre-sale units priced at $149,000. Interiors will be finished with sheetrock and stained concrete floors, while the exterior will be finished with Hardiboard painted in coastal colors and topped with composition roofing.

The property will be accessed by a palm-lined drive. Estimated completion date is two years.

• Sunrise Cottages on 10th Street between Avenues B and C will be a 10- unit pocket community. The $205,000 to $235,000 single-family homes will reflect classic coastal living, according to broker/ agent Keith McMullin. Homes will have three bedrooms and two-and-a-half baths with one-car garages. Developer/builder Nick Lorette will start construction in the next 60 days.

• Snappy Foods Convenience Store has opened at 2217 State Hwy. 361. While 5,000 square feet of the store is occupied by the convenience store, another 2,400 feet is available for a restaurant. Owner Moe Motaghi of Corpus Christi said he is still working on finding an occupant for the fast food restaurant area, and that he is “glad to be in Port Aransas.”

• Cinnamon Shore, on State Hwy. 361 near the southern city limits, is a master planned new urbanism mixeduse community to feature single-family homes, condominiums, retail shops and restaurants.

Homes and home sites in Phase I are available for sale, and Phase 2 is under development. The Town Center Building, which will house condominiums, is scheduled to break ground this month, said Lee Ann Peters, who is sales director at Cinnamon Shore with her husband, Terry.

Home prices range from the $400s to $2 million, and condominiums start in the $200s.

The Gulf coast vernacular style of architecture will surround amenities to include stocked lakes, parks, lawns, pools and fitness areas. The beach is accessible via golf carts on dune crossovers.

The development is home to the

Southern Living magazine Idea House that is open for tours through Sept. 27.

Developer of the project is the SeaOats Group/McAden Cumby Developers of Atlanta, Ga. and Austin.

• Las Palmeras at 247 W. Roberts will be a grouping of 21 town homes, four of which are nearing completion. Priced at $249,950 to $320,00, the two- and threebedroom coastal cottage style units will have one- and two-car garages and will surround a tropically landscaped swimming pool, according to agent Suzette Freeman.

• Village Walk, Phase II, 2525 S. 11th St., is being built by Nick Lorette of Port Aransas with Buster Hoffmaster of Austin. Five new homes are under construction. Lorette said Phase II will have 46 homes and be a “mirror image of Village Walk I,” a collection of detached single-family condominiums. Finishing touches on the Phase II pool and pavilion are just about complete, according to broker/realtor Keith McMullin.

Lorette said the project will have a coastal, bayside feel to the architecture with Hardiplank exterior, composition roofs and concrete and pine floors throughout. Two –story floor plans start at $239,000 and three-story Gulf view units are priced at $398,000.

• Signal Point Coast Houses, 1527 S. Station St., is a five-unit condominium complex with units priced at $199,000 to $271,000. The furnished coastal style units feature granite countertops, tile flooring, stainless steel appliances and high ceilings, broker/agent Marcus Starkey said. Each unit has its own garage and the common area includes a swimming pool.

• Spencer’s Landing at Station and 11th streets is a development of singlefamily homes and lots, said real estate agent Linda Johnson. Lots are priced from $69,900 and homes start at $199,900. Homeowners will enjoy a community pool and an extra parking area.

Developer is Nathan Clark of San Antonio.

• The Commons at 2120 11th St. is an insulated concrete forms (ICF) style construction town home development that will feature “beachy” interiors and patios that surround a large swimming pool. The pool area will feature picnic tables, barbecue grills and hammocks.

The exterior construction is designed to withstand high winds and reduce or eliminate noise between units, real estate agent Johnson said.

Eight of the 30 units are complete, two of which are models open for viewing.

Prices range from $215,000 to $229,000.

Developers are Jimi and Vivian Ballard of Austin, and Kathleen Perry of Austin and Port Aransas. Builder is Nick Lorette of Port Aransas.

• Villa Palazzo, 4903 State Hwy. 361 near Casa Del Cortez, is taking pre-construction reservations for the six town homes priced at $475,000 to $535,000. According to Cynthia Frank of Silver Sands Realty, the 2,000 square foot homes with two-car garages and water views will be reminiscent of Italian villas. Developers are Pullar Brothers (Steve and David) of Illinois.

Construction of some other developments has been complete for about a year, but activity that halted with the slow-down of the national economy has now resumed.

Among them are:

• The Meridian at Mustang Island, a condominium complex at 3021 S. 11th St., is now 40 percent sold, broker Addie Belcher said. Units range from $179,900 to $199,900. The 1,590 to 1,720 square foot units each have a garage.

Developer is Nertz Investments of Dallas.

•Island Park Estates, on the beach side of State Hwy, 361 just north of Mustang Island State Park, is a 58-lot residential development, of which 21 have sold. Prices range from $95,000 to $600,000.

Architectural specifications require Hardiboard construction and metal roofs. Shared amenities include a beachside pool and cabana. Ownership includes a complimentary membership in the Island Moorings Yacht Club and use of boat slips, according to real estate agent Suzette Freeman.

Developer is Kevin Dean from Maine.