West of the Trail: A location that's in demand

SARASOTA -- The house was old when they moved in. But it spoke to them.

Erin and Craig McLeod at their 1926 home on Wisteria Street in Sarasota's coveted "West of the Trail" area. "Love it," said Erin McLeod of the house. "Never want to leave. Not for all the tea in China." Staff photo / Harold Bubil

“From the moment I walked through the door,” recalled Erin McLeod of that day in 1983, “this house had a soul, and it was talking to me. I just thought, ‘I will be here until my feet go out last.’ ”

“We told our kids,” said her husband, Craig McLeod, “that when we get old, if we don’t answer the phone for a week, come and get us.”

The house is a Spanish-style cottage built in 1925 at the peak of Florida’s defining real estate boom. By fall 1926, after the great Miami hurricane, the boom collapsed and the Great Depression came to Florida three years ahead of the rest of the country. Amid all the speculation, historians write, Florida “ran out of suckers.”

Casa McLeod is at 1869 Wisteria St. in Sarasota’s DeSota Park subdivision, developed in 1924 by Lewis Combs. Better known as “west of the Trail” or “the Flower Streets,” the vintage neighborhood is desired because of its proximity to Hillview Village, Sarasota Memorial Hospital, Southside Elementary and shopping. Downtown is a commute of 6 to 8 minutes. When Realtors invented the phrase “it’s close to everything,” they were talking about DeSota Park. It’s the same for McClellan Park, Cherokee Park, Harbor Acres and the rest of the West of the Trail district.

There’s little turnover; homeowners stay for decades and become friends with neighbors. Occasionally, when the honey-do list gets too long, they look at all the shiny new homes out east.

“Every time our neighbors think about moving, they go look at model homes,” said Erin McLeod, senior vice president of the Senior Friendship Centers. “Then they come home and say, ‘You can’t beat our neighborhood.’ ”

A lot of people feel the same way. Would-be buyers, especially. The area is in demand by newcomers and working professionals. Doctors love it. Their spouses walk their children to school and stroll to the village for dinner.

Homebuilders love it, too. In the past 15 years, old houses, especially 1950s ranches, have been replaced with large homes right out of the Lakewood Ranch pattern book. Rob Allegra is building them as are John Cannon and Todd Johnston, builders who have found profit opportunities on infill lots. National builder D.R. Horton is joining the action nearby

So the old houses, 1,000 to 2,500 square feet in size, are being replaced with homes of 3,000 to 5,000 square feet, and it has changed the architectural character of the neighborhood.

“Where are all the people who were screaming 10, 12 years ago about the megahouses?” said Don Saba, who lives a few blocks northwest of the McLeods. “But they are not doing it now, which kind of blows my mind because this whole thing about the amount of improvements on these sites is starting to get out of control in terms of the west of the Trail situation. In some of these older houses, people having to look at a wall — you have a 75-foot-wide lot, at most, and they have a house next to them that is just huge.”

“People are drawn to this area because it is quaint and it is charming,” Erin McLeod said. “Then they immediately set about un-quainting and un-charming it. It’s like, ‘Oh, isn’t this precious? OK, tear this down! Rip out those trees! Build a monster house.’ Then suddenly you have buildings out of scale.”

“We feel lucky on this street,” her husband said. “The seven original houses are still here.”

Price points

A new, West Indies-style house on Datura Street in DeSota Park. The street has been almost completely redeveloped with grand new homes. Staff photo / Harold Bubil; 7-27-2015.

But for how much longer?

The county property appraiser values the McLeods’ land — two 50-foot lots — at $371,100 but the structures at $36,800. That is the perfect definition of a teardown, according Don Saba’s formula. The private real estate appraiser says a house (an “improvement") becomes a teardown when the land reaches 85 percent of the property value.

But given the house’s architecture (the Spanish Eclectic-style houses are prized and priced relatively high by sellers), it would be difficult for a homebuilder to buy the land, raze the house and build a big one for today’s buyer and still make a profit.

Allegra, who lives west of the Trail, said that "$450,000 is the starting point. By the time you have torn down the house and cleared the lot, you are in the neighborhood of $470,000. It does start not to make sense because it is reaching price points where you are at $1.5 million and over” for the final product. Few houses in the neighborhood have sold for that much in the past three years.”

“No way am I selling my house for $450,000,” Craig McLeod said.

“Although west of the Trail has exploded and the prices have gone up,” Allegra said, “I am wondering if we are starting to reach a plateau as far as pricing. The great sites — Harbor Acres, Cherokee Park — are still commanding big dollars. But the other streets have to be good streets. Datura is a premier street.

“The closer you get to the village, the better. Buyers want to be near it, but not looking at it.”

A fine line

The McLeod residence at 1869 Wisteria St. in Sarasota. Built in 1926, the house was added to in 1990, and, like many other Spanish-style houses West of the Trail, it has survived the neighborhood's teardown trend because they have been, so far, too valuable to tear down for builders to be able to profit from the venture. Staff photo / Harold Bubil; 7-13-2015.

Two streets north of Wisteria, Datura is heavily redeveloped with new houses. Throughout the neighborhood, the obvious teardowns have been picked over, and the old homes that remain carry price tags of $500,000 to $850,000 when they come on the market.

One house, a 1980s bungalow on Wisteria, is on the market at $399,000. But its small lot is next door to commercial property on U.S. 41 — the worst location in the neighborhood, Allegra said.

“I couldn’t justify paying $399,000,” he said. “Now if the home is in decent shape (it has been updated and is fresh and new inside), an end user may pay it, but they will always have the issue of trying to resell it next to the commercial property.”

The best site is right in the middle of the block, removed from traffic noise from Osprey Avenue or the Tamiami Trail — a spot occupied by a 1949 house of 2,600 square feet at 1919 Boyce St., three streets north of the elementary school and listed at $700,000.

“There is a very fine line between having value in the house and having no value,” Allegra said. “Most of the homes I try to buy, the house has no value. But when you have a home that is not dilapidated, that has been restored and taken good care of, now the house has value.

“There are lots of people coming through my model on a daily basis who want that $600,000 to $800,000 price range. The come in thinking ‘brand new,’ but when you are paying $450,000 for a lot, it can’t be done. But that is their next alternative. If they want the neighborhood, they start looking at older homes. If you have one that has been redone and you are in that price range, you have a good chance of reselling it. What’s happening is the old, dilapidated homes have been gobbled up. There are still a few out there, but a lot of them are (tied up) in estates.”

‘The rule of thumb’

Builders are always looking for property so they can replace inventory that has been sold. “I am uncomfortable hitting that $1.5 million-and-over range because I am not in Cherokee Park or Datura or one of those premier streets,” Allegra said. “It is getting very difficult West of the Trail.”

“The rule of thumb for an interior site west of the Trail,” Saba said, “is that the land should be 30 percent of the overall value.” Waterfront sites can be 40 to 50 percent of total value, he said.

Builders are even looking at properties east of the Trail, conveniently located, but where teardowns are only $200,000 to $250,000. The renewal process has already started there, and the aging, modest housing stock presents many more opportunities for builder-developers. Two houses on Datura near School Avenue were torn down recently, and another 1950s house on three lots will go soon, to be replaced by three new houses.

“Bigger isn’t always better. When you are buying a house, you are investing in the land,” Saba said. “You can always change the improvements — you can add on or remodel. But when you are buying a house, you are investing in the location, which is the site. It is the site value that goes up and down when markets are good or markets are bad.”

He stresses that builders and buyers who pack too much house are risking not being able to resell the house.

On a $450,000 lot, the 30 percent rule calls for a $1.05 million house for a total value of $1.5 million.

That is a lot of money, even for a highly desired area. Only three “Flower Streets” houses between Osprey Avenue and U.S. 41 have sold for that much and one of them is a bona fide mansion (with guest apartment) that is overbuilt for the area and sold at $1.99 million.

“The builders are trying to cram as much improvements as they can on these sites, and the ones that meet the land-to-value ratios are selling,” Saba said. “The ones that don’t meet the ratios, they are having a hard time with. That’s the way it is.”