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By Tampa Tribune CHRISTIAN M. WADE

Published September 2, 2006

NEW PORT RICHEY - The full-page advertisement in the Gulf Harbors Civic Association's newsletter was a desperate plea to homeowners.

"WHY IS EVERYONE SELLING?

MORE HOMES FOR SALE MEAN LOWER PRICES!

STOP SELLING!"

The appeal was not as surprising as the woman who submitted it: one of the affluent subdivision's most successful real estate brokers.

"The signs are going up faster than they're coming down," said JoAnn Milano of Century 21. "The market is suffering."

Her advice to Gulf Harbors homeowners: Unless you need to sell, don't.

"People are starting to take their properties off the market because they're not selling, and that is driving down prices," she said. "I'm telling them to wait."

The slowdown of waterfront property sales in this seaside subdivision - long a haven for northern retirees - is the "perfect storm" of rising insurance premiums, climbing interest rates and a sluggish real estate market, Milano said.

Nowhere is the market downturn more evident than along Floramar Terrace, where rows of "for sale" signs are sprouting like mushrooms in front of well-groomed houses.

In Gulf Harbors, Gulf Harbors Woodlands and Gulf Harbors Sea Forest, nearly 200 homes are on the market. Only a handful of them are selling, Milano said.

Since January, only 33 homes have been sold in the three neighborhoods, compared with about 145 homes sold in the area during the same period last year.

The houses on the market range from megamansions on West Shore Drive, one recently listed at $4.2 million, to modest single-family houses listed at about $134,000.

Another factor in the Gulf Harbors housing crisis was the unintended consequence of a recent crackdown on short-term rental properties in the deed-restricted community.

In December, the county attorney's office sent letters to dozens of homeowners warning that the county planned to start enforcing a 1999 law limiting short-term rentals.

Complaints About Tenants

The county attorney's office got involved after receiving numerous complaints from residents and the Gulf Harbors Homeowners Association about the revolving door of tenants, many of them with out-of-state license plates, late-night parties and disruptive boaters.

But the move prompted homeowners and real estate investors who were renting out their properties to sell, dumping more than 50 houses onto the market earlier this year.

Milano said that translated into bad news for sellers. "It's a buyer's market now," she said. "That's if you can afford it."

Still, the abundance of houses for sale west of U.S. 19, from Hudson to Holiday, masks a broader trend: People are moving away from the densely populated part of Pasco County in droves. Some of them are migrating to Hernando and other northern counties. Many are leaving the state.

'Killing The Housing Market'

The story is the same with other subdivisions west of U.S. 19 - Holiday Lake Estates, Sea Pines and Westport in Port Richey - where "for sale" signs line the streets.

Much of it has to do with rising insurance rates.

"The state's insurance crisis is killing the housing market," said Chris Kowalczyk, vice president of the nonprofit citizens advocacy group Homeowners Against Citizens, referring to Citizens Property Insurance Corp.

Kowalczyk, who lives in Sea Pines just north of Port Richey, said many residents are leaving Florida because they cannot afford the skyrocketing homeowners premiums.

"In my neighborhood alone there are more than 100 houses on the market," he said.

The sluggish market is a dramatic turnaround for the region. Beginning in the late 1990s, a scarcity of land and of access to the Gulf in Pinellas and Hillsborough counties sparked a migration to the subdivisions west of U.S. 19. The new arrivals, many of them middle-class professionals with young families, were jumping on available properties that used to belong to elderly residents.

Over the past decade, Gulf Harbors recorded the largest increase of any Pasco subdivision as home buyers came from neighboring counties.

Orville Holtz, 62, was one of them. He bought his single story, canalside home in Gulf Harbors for $80,000 in 1998. With the steady rise in property values, it is worth several times that now. Earlier this year, Holtz decided the time had come to sell. But after several months of working with real estate agents, and a few months on his own, he has only gotten a few offers.

"Personally, I'm in no rush to sell," Holtz said. "Other people aren't that lucky."

He wants to move to Georgia, but for now he has to wait.

A year ago, local brokers were clamoring over a handful of available homes in Gulf Harbors, a community of 1,850 houses carved out of the coastline about 30 years ago. This year, closings are few and far between.

So Milano, who has lived in Gulf Harbors for decades, tells them to wait, for now. "The market will bounce back," she said. "But it will take time."

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