When the groundbreaking was held for Blount Street Commons in 2008, it was assumed that by now the ambitious project would be a shining example of the downtown Raleigh areas ongoing revitalization.
Things havent quite worked out as planned. The housing bust stalled the residential build out of the project, and late last year the master developer, LNR Property, opted not to purchase the remaining nine acres near the governors mansion where the final two phases were to be built.
One portion that is now finally moving forward is a half-acre parcel at the corner of Person and Peace streets, across from Krispy Kreme, that LNR sold back in 2008.
White Oak Properties expects to break ground in April on the first of three buildings that will be part of an 18-townhome project called Peace Street Townes. The first building will include seven units, four of which are now under contract.
Roland Gammon, White Oaks owner, said the decision to move ahead before all the first buildings units had been reserved was in part a response to the ongoing wariness shown by potential buyers to new projects.
I think somebody who shows real progress will bring a lot of those people who are talking about buying and are wary of it theyll see its happening and go ahead and move, Gammon said.
Like the single-family market, the townhome market has been improving over the past year as inventory levels dropped and demand picked up. There were 523 townhomes sold in Wake County between November and January, a 30 percent increase over the same period in 2011-12, Triangle Multiple Listings data show. The inventory of townhomes on the market fell 32 percent during that same period.
That has led to an uptick in new construction. Townhome starts increased 52 percent last year in the Triangle, from 1,089 to 1,653, according to Metrostudy, a research firm that tracks Triangle housing trends. By comparison, single-family home starts were up 33 percent over that same period.
Peace Street Townes will offer townhomes from $250,000 to $290,000. White Oak is partnering with Blount Associates LLC, which paid LNR $1.76 million for property, on the deal. Blount is bringing the land to the deal but White Oak is developing the project, said Prentice Baker, a partner in the group that owns the land. Bakers group had originally hoped to build 50 to 60 condominiums on the site with some retail.
I think the site is really going to receive the project hes got designed a whole lot better than what we were going to do, Baker said.
Townhomes, and not condominiums, also make more sense today because of the lending environment. Fannie Mae, the government-owned mortgage giant, accepts mortgages on townhomes while condominiums must meet higher hurdles to be accepted.
If you dont meet Fannie Mae financings when it gets time to sell ... your buyers cant get loans very easily, Gammon said.
Peace Street Townes will be adjacent to the site where Vanguard Homes built a handful of units before going out of business. Live Oak Homes, the homebuilding arm of local developer GreenHawk, acquired Vanguards remaining land and unsold units out of bankruptcy.
Live Oak has sold the two completed units, and has room to build 14 more row houses and carriage homes. LNR still owns the land that faces Person Street.
Live Oak is preparing to apply for permits to build a 4-unit building, said Craig Briner, president of GreenHawk. The company wont begin construction until it has lined up buyers for the all the units in a building.
Briner said lack of inventory means potential buyers cant find what theyre looking for.
I dont know if the demand has increased, but theres not much product out there, he said.
Like Oaks homes will be priced from about $330,000 to $400,000.
I think theyll complement each other actually pretty well, Briner said of White Oaks project. It will be nice to have the activity there.