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Long views, short money

Ocean-front condos on the block, hinting at severity of housing downturn in Revere

Twenty new units at the Atlantica on Revere Beach will go to auction in March. Minimum bids: $215,000 to $315,000. Twenty new units at the Atlantica on Revere Beach will go to auction in March. Minimum bids: $215,000 to $315,000. (Globe Staff / Pat Greenhouse)
Email|Print| Text size + By Kimberly Blanton
Globe Staff / February 17, 2008

REVERE - In Marblehead, a 1,300-square-foot, oceanfront condominium sold last August for $795,000. On Salem Harbor, it would run about $500,000.

And then there is Revere: same ocean, lower prices.

Twenty condominiums in the Atlantica, a newly constructed project on Revere Beach, will go on the auction block March 9. The minimum required bids, $215,000 to $315,000, are relative bargains for one- and two-bedroom units on the water. Most either face the ocean or have views of the surf.

"Those are the lowest prices that are going to be on the beach," said Jodi DiLorenzo, a Coldwell Banker agent on Revere Beach. "God isn't making anymore oceans."

Revere Beach still hasn't fully recovered from the real estate bust of the 1980s. Now, just as new development along the city's waterfront was gaining momentum, the nation's real estate market has ground to a halt and sales here have slumped. For longtime Revere residents, the cycle is painfully reminiscent of the 1980s, when the St. George condominium - a pink stucco high-rise next door to Atlantica - went on the auction block.

The need for an auction to move Atlantica's reasonably priced, beachfront properties - just weeks before the spring selling season kicks into gear - may be the ultimate barometer of just how tough Revere's housing market is.

"The real estate market is a mess, and people aren't buying," said Paul Rupp, whose firm, Community Reinvestment Associates Inc. in Swampscott, consults with the city of Revere on development. "This project, which is a good project, was just caught in the wrong time," he said about Atlantica.

Condo sales in Revere plunged 18 percent from January through November of last year, compared to an 8 percent decline statewide, according to Warren Group, a Boston property-research firm. The median price for condos fell 6.5 percent, to $246,500, compared to 1.85 percent statewide.

The Atlantica in particular was affected by the credit crunch that roiled the US housing market over the summer. Last spring, 16 condos sold, but since then only six have closed in the 81-unit project, according to Accelerated Marketing Partners, which is conducting the auction for Atlantica's developers, Eurovest Development Inc. of Boston and Tambone Investment Group of Burlington.

Completed in 2006, Atlantica has New England-style architecture and yellow-and-green, fiber shingles that sparkle next to the dated St. George. The new U-shaped building has a courtyard, and the condos feature all the amenities now standard in new projects targeted to the middle market: stainless steel kitchen appliances, hardwood maple cabinets, and granite countertops.

But Atlantica has competition: Surfside Lofts on nearby Ocean Avenue opened last year. Half of its 48 lofts, priced between $289,000 and $419,000, have been sold, said sales agent Kristen Vitello.

The luxury units, some with soaring 28-foot ceilings and walls of glass framing ocean views, have primarily sold to downsizing baby boomers. "Not a lot of first-time homebuyers," Vitello said.

Surfside and Atlantica hit the market just as the beautification of Revere Beach Boulevard was being completed. Other developments nearby are also underway.

Atlantica developer Eurovest is also planning a $500 million, 10-year project, Waterfront Square, with retail and office space and luxury condos, to link to the Wonderland Blue Line stop.

Developer Steve Fustolo is planning another big condo project, the Ocean Club, on Revere Beach Boulevard, which the developer said would open next year. With 242 units, prices for Ocean Club will push Revere Beach into a higher price bracket: Condo sales prices range from $450,000 to $1.7 million. With construction barely underway, about 40 percent of the condos are under agreement, Fustolo said.

Revere Beach may be the last place on Boston's North Shore - and one of the last on the Northeast coastline - where middle-class couples such as William and Nancy O'Brien can afford to live oceanside. He is an assistant foreman for the Boston subway system; she is a housewife and personal trainer.

The couple moved into the Atlantica last August with their adult daughter, a year after buying a two-bedroom condo for $299,900. It took longer than they anticipated to sell their former home in Saugus, but Nancy O'Brien said she has now "come to paradise." Their son also bought a unit on the same ground-floor level.

From their balcony on the building's south side, the O'Briens can see the ocean surf.

"It was a no-brainer," she said, taking a break from preparing dinner for her family. "It's brand new, it's the ocean, and it's affordable."

Since the O'Briens purchased their property, the market has screeched to a halt, and prospective buyers fear that prices, which dropped last year, will continue to decline.

Accelerated Marketing's chief executive, Jon Gollinger, said the auction is a way to show dubious buyers that they can get a bargain. "People have great reservations about putting down deposits because people don't know where the pricing's going to go," he said.

At auction, bidders can continually assess whether the property is worth the latest bid price "so they can be really, really comfortable" about buying, he said.

The housing market in this blue-collar, oceanfront enclave largely missed out on the boom that propelled oceanfront prices to stratospheric highs in tonier communities. The real estate boom was in its last breaths just as it reached Revere Beach Boulevard, leaving the city, once again, in the lurch.

This pattern appears to be a repeat of what happened during the late-1980s real estate bust. But real estate agents and city officials said this cycle is different, thanks to Revere's determination to develop its waterfront. Revere Beach, the first beach officially reserved for public use, is known for the 19th-century wood pavilions that stand sentinel.

Revere Beach has long had a honky-tonk tone to it. With brand-new construction, such as Surfside and Atlantica, it is slowing moving up-market.

The City of Revere is promoting this conversion, touting the beach's proximity to Boston and mass transit and encouraging development on its precious waterfront. To do so, the city extended a sidewalk along Revere Beach by 2 miles, and beachcombers can now walk 3 miles along the coast.

"Revere Beach is a totally different marketplace from the City of Revere," said Bob Upton of Century 21 North Shore. "The City of Revere is more of a working-class area. Revere Beach is becoming a little more upscale, and buyers are coming from across the country to look at Revere."

And despite the seizure in the nation's credit markets, Eurovest's ambitious mega-development progressed last year, with $16 million in state and federal aid, said Rupp, Revere's consultant.

There is a "residual negativity about Revere that isn't at all justified," he said.

Atlantica's developers decided to sell the remaining 20 condos in a one-day auction, rather than wait as much as 12 to 18 months for the market to rebound, the auctioneer said.

Most of the premier units in the complex are already sold, including those at the front of building with panoramic views.

In the auction, to be held at the Seaport Hotel in downtown Boston, a single one-bedroom and eight "one-plus-den" units will be sold - the dens are essentially lofts overlooking the living rooms. Several of these units are at the back of the building, with views of Boston's skyline or the marshlands to the west. Most have minimum prices - the lowest price the developer agreed to accept during bidding - in the low- and mid-$200,000s.

The rest are two-bedrooms, with starting bid prices of $255,000 or more; three at the front of the building have $315,000 minimums.

Kimberly Blanton can be reached at blanton@globe.com.

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