By LAURA LAYDEN | Sunday, February 17, 2013
NAPLES — Builders in the Naples market are investing millions in houses with no buyers.With the housing market on the rebound, the speculative, or so called “spec” market has made a comeback, especially in areas near the water such as Port Royal, Aqualane Shores, Coquina Sands and Old Naples.In the past year, more high-end custom builders have been buying lots and putting multimillion-dollar houses on them, expecting buyers to come. And buyers have come, sometimes snatching up houses before they’re finished.Spec home building slowed to a virtual halt after the red-hot housing market went bust starting in 2006, but it’s back.
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41 West, a longtime luxury builder in Naples, decided to start building spec homes again last summer after a four-year pause.”Builders like myself are building homes on a speculative basis. Where everybody has been afraid of their own shadow for the last four years, people are stepping up. It’s a totally different market,” said William Bayes, 41 West’s vice president of operations.It’s a different market because the inventory of both new homes and resales has shrunk, which is slowly driving up prices.41 West’s decision to get back into speculative building came after Naples-area Realtors saw one of their busiest summers for sales in a decade, Bayes said.
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Other builders jumped back into the speculative market more quickly than 41 West, with construction picking up noticeably last year, such as in Old Naples.During the past two years, Waterside Builders built two quaint cottages off Third Street South that fetched some of the highest prices per square foot seen in Old Naples, said Mike Assaad, the company’s president.Buyers paid more than $1,000 per square foot for the living space under air and one of the homes was a spec that brought $2.6 million, he said.”There are a lot more buyers at $2.5 million than there are at $4 million or $5 million,” Assaad said.
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While much of the speculative building is near the water, it has picked up elsewhere in Collier County, including Mediterra, the luxury golf community straddling the Lee-Collier county line off Livingston Road.Most of the builder’s spec homes have been priced at $1 million to $3 million. They are three- and four-bedroom homes, ranging from 3,000 to 5,400 square feet.The builder will soon start similar spec homes in downtown Naples and Quail West, another golf community east of Interstate 75 between Bonita Beach and Immokalee roads.
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WCI Communities Inc., a Bonita Springs-based home builder, has spec homes in all five of its gated communities in Collier and Lee counties.WCI has two communities in Collier, including Tiburon in north Collier, where it’s building four spec homes with four and five bedrooms, priced at about $1 million. They’ll range from 3,800 to 4,500 square feet.There are another seven spec homes under construction at WCI’s Manchester Square community off Livingston Road, north of Pine Ridge Road.”We definitely have increased spec count,” Wolf said. “Last year, we were kind of following a sell one, replace one (strategy). This year, there has been enough demand that we are putting out two specs for every one that we sell.”
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