Real Estate Q&A
My wife and I vacationed recently in Florida and were blown away by all the new housing communities. Nice retirement developments with amenities comparable to world class resorts, e.g., limited access, clubhouse, spas, exercise facilities, restaurant, indoor/outdoor pool, golf course, walking trails, theme neighborhoods. etc. And the homes, most about 2,200 square feet and fully landscaped with granite counter tops, private dipping pools, tile floors, etc., were priced at between $250,000 and $300,000. I think HOA fees were around $100 per month. Two questions: First, how can developers there provide so much for so little compared to housing in this area, and second, why hasn’t someone done something similar in the Grand Valley? We believe there is a market here for such a development. Thanks,
— Tom and Lisa, Fruita
Tom and Lisa,
I agree with you and you picked a great winter to visit Flordia! I believe our market is in need of more retirement style living with a lock-and-leave concept with all the amenities. The way you describe these communities makes me wish I were a little closer to 55 years old! : ) However, there is one problem: Communities like you are speaking of are on a very large scale — thousands of homes spread across thousands of acres. These communities incorporate golf courses, shopping centers, strip malls, the full spectrum of goods and services, to create a wonderful community-like atmosphere and the population of such areas can be 4,000-5,000 all the way up to 50,000 like The Villages outside of Orlando, Fla.
To answer your first question, I am going to assume that it has much to do with economies of scale and location. When you are building so many homes each year, the builder/developer can purchase everything in large quantities (including land) and when you have that kind of buying power, you can decrease your costs significantly. Also, getting products to the Rocky Mountain region just costs more, more transportation means higher prices, generally. So economies of scale and a southeastern coastal location probably make up the lions share of price differential, but I also believe if you look around our local market you will see many great options in the $120- $140 per square foot range, which are very similar the product you were seeing there(minus the private dipping pool).
It sounds as if the pricing, on a price-per-square-foot basis, is not all that different, but the missing link will be the amenities and settings these communities provide. Keep in mind that Redlands Mesa has many of these great amenities and is beginning to offer some wonderfully affordable homes. To provide the clubhouse, spa, exercise facilities, restaurants, golf course, walking trails etc., generally you have to have thousands of residents that are living in that neighborhood or community to make it economically work out where HOA fees of $100 per month can sustain such nice facilities. Again, many of these communities are as large or larger than Fruita and all built by one developer/builder.
Also keep in mind that to have retirement communities on this scale you will generally need to have consistent weather which means, California, Arizona, Texas, Florida, etc. In case you missed the memo, not many people are looking to winter in Grand Junction! Beautiful, warm year-round weather is a large part of the attraction that allows for communities of this scale to be successful. “Snow birds” begin flocking to these retirement areas in the winter to escape the cold weather of home and eventually just decide to relocate year round as the amenities and weather end up luring them there full time. Without wonderful winter weather, large-scale retirement communities are going to be hard to be successful with. I would not look for the type of communities you are discussing to move here any time real soon, but I do believe that there will be more and more lock-and-leave, patio-style homes that are turn key being built in our market over the next several years. Thanks and hope you enjoy your future trips to Florida. Sounds like the latest one will not be your last.
The Kimbrough Team,
RE/MAX 4000, Inc