Glass half full: John Westrum (left) and Joan Diaz walk through the new homes built at The Arbors at Eagle Pointe in Somerton. Although the active adult community is the largest and most unsold residential construction project in the Northeast, more properties were sold in 2013 than any other year. MARIA POUCHNIKOVA / TIMES PHOTO
The signs on the sales office walls at The Arbors at Eagle Pointe say Westrum Development Company, but John Westrum is marketing something more vital than homes. He’s really selling consumer confidence — which he has to do, considering he’s sitting on the largest and most unsold residential construction project in the Northeast and perhaps the city.
As of last month, his company had closed the deal on 177 of the 398 homes planned for its 55-acre older, active adult community on Southampton Road near Carter Road in Somerton. The units include singles, quads, townhomes and condominiums. It’s taken Westrum six-and-a-half years to reach this point.
And while skeptics may say that he’s not even halfway done (44 percent actually) with the finish line nowhere in sight, the builder insists his glass is half-full. The company sold 40 Eagle Pointe properties in 2013, the most it has in any single year. Meanwhile, economic data released just last month suggest that Philadelphia finally is showing balanced recovery from the 2007 housing market collapse.
Naturally, the sooner that Westrum can convince would-be homebuyers it’s safe to take the big leap, the sooner Somerton residents may see the last of the construction vehicles and roadside promotional signs that have inundated the neighborhood since the project’s inception.
“In 2007 and 2008, we were just starting and the economy crashed, so to speak, and it took until about 2011 for any recovery to occur,” John Westrum said during a Sept. 15 interview. “We still have not reached full recovery, but we’re three-quarters of the way there. We’re projecting to sell fifty (homes) a year. … We have another three to four years to finish things up.”
Area residents have heard the last part of that message before. Perhaps the first time was in mid-2007 when Westrum’s sales team attended a Somerton Civic Association meeting to rally interest among prospective homebuyers. John Westrum reiterated the four-year target during an interview with the Northeast Times in spring 2008. The newspaper profiled the developer, his background and his work in a front-page story that May 1.
With just 78 of the 398 planned homes sold as of mid-January 2011, John Westrum acknowledged that the project was woefully behind schedule. Because the homes are built to order and due to financial factors, the sales rate dictates the construction rate. In 2011, Westrum chalked up the delays to bad timing.
“Ideally, we would like to have been in the market two years earlier,” the developer said at the time. “As a company, we had to slow a lot of things down and put a lot of things on hold.”
Before Westrum acquired development rights and zoning approval for the site in 2006, the project area was part of a much larger public eyesore, the former Philadelphia State Hospital, a psychiatric facility commonly known as Byberry. The state-run hospital shut down in 1990 amid allegations of patient abuse and neglect. Trespassers, vandals and the elements wrought havoc on dozens of multistory brick buildings that remained on the 130-acre campus as overgrown trees, shrubs and weeds enveloped the surrounding land.
Eventually, the state sold the site to the Philadelphia Industrial Development Corporation for $850,000. PIDC sold it for $5 million to a partnership of Westrum and Brandywine Realty Trust, which agreed to pay millions to raze the environmentally hazardous buildings.
Brandywine obtained development rights for 55 acres, where it pledged to build a business park, ideally for corporate-style offices or light industrial uses. That portion of the tract remains vacant, however, as Brandywine continues to search for a suitable occupant. As part of the land transfer, both companies agreed not to build on 25 acres of land along Carter Road, where longtime residents demanded a 250-foot buffer zone from the new construction.
Westrum opened its first sample units on May 31, 2008. Sales underperformed the projections, but began showing signs of life in late 2010 when the company closed on 11 properties between October and December. Westrum is hoping to duplicate or exceed that fourth-quarter production this year. As of last month, the company was on pace to tally 36 sales for the year. Nevertheless, the economic signs are encouraging.
Housing prices and sales volume each increased citywide in the year’s second fiscal quarter (April through June), according to a quarterly report published last month by the University of Pennsylvania’s Fels Institute of Government. That has happened just one other time since the bottom fell out of the housing market in 2007. Third-quarter data have not been released.
Fels Senior Research Consultant Kevin Gillen, an economist, produces the quarterly reports in association with Penn’s Institute for Urban Research. The reports break the city’s housing sales data into nine districts or neighborhoods. The average or mean home price grew in all nine areas in the second quarter, including 2.3 percent in the “Upper Northeast,” which includes the Eagle Pointe site.
Citywide, the mean home price grew by 6.3 percent on the strength of gains in some of the city’s lower-income sections, including North Philly (8.6 percent), South Philly (7 percent) and University City (6.8 percent). That compared to a 1.3-percent decline for the 10-county Philadelphia region and a 0.8-percent growth nationwide.
“After several years of up-and-down prices and an unevenly spread recovery in house sales, Philadelphia’s housing market finally achieved widespread gains in the latest quarter,” the Fels Institute reported.
Meanwhile, the volume of so-called arms-length sales (those involving parties acting independently) increased by 10 percent over the previous quarter.
“Although sales were down slightly from the same quarter a year ago, they were much more geographically distributed across the city’s neighborhoods,” the Fels Institute reported.
For the Westrum folks, the data indicate that empty nesters dwelling in the city may be more willing to sell their old homes to relocate and downsize into the suburban-like 55-and-over community. Indeed, more than half of Eagle Pointe buyers previously lived in Philadelphia, while close to one-quarter moved there from neighboring Bucks County.
According to Joan Diaz, the Eagle Pointe sales manager, prospective buyers don’t seem as worried as they used to be — even last year — that they won’t be able to sell their old homes as they sign purchase agreements on their new homes.
“This year, I don’t have any home-sale contingencies,” Diaz said.
Over the years, Westrum has modified its pricing and products to make Eagle Pointe more affordable and manageable to those folks, too. Initially, the company priced the townhomes starting at $350,000 and the quads starting at $390,000. The developer further projected single homes starting in the high $400,000s and condominium units starting in the middle $200,000s.
Now, townhomes, also known as “carriage homes,” are selling for $275,000 and up, while singles are $330,000 and up. The base price on the most expensive two-story single is $440,000. Quads, also known as “villas,” are like two sets of twins configured back-to-back. There were 80 on the original plan, which have virtually sold out. The full site plan still includes 97 townhomes and 80 singles. Condos won’t be available until the latter stages of construction due to the high cost of building numerous units at one time.
From a product standpoint, the company has begun offering units with reduced floor space and new configurations to respond to customer feedback. There are more rancher-style options and more two-bedroom options for buyers who don’t want stairs or those who would rather have a den or “flex space” instead of a third bedroom. The smallest available townhome is about 1,100 square feet, while the largest available single is about 2,800.
“Everything has a minimum of two bedrooms on the first floor. … The main thing we did was (design) one-level living,” Westrum said. “We started with larger units and toned down a bit and focused on spaces people really wanted.”
John Westrum recognizes that such accommodations may mean little to local folks who have been living alongside the massive construction site for years. But were it not for Eagle Pointe, the property might still harbor the dilapidated monstrosities of the former Byberry hospital.
“If it wasn’t as far along as it was (in 2007), it wouldn’t have started,” the builder said. “There were times with our lenders when we asked, ‘Do you want us to keep going?’ ”
The answer was yes.
“The bottom line is I think (people) are happy that Byberry state hospital is no longer there,” Westrum said. ••
