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RESIDENTIAL REAL ESTATE
2004’s hot real estate market to continue in 2005
By Sarah G. McC. Moise
Staff Writer
As hot markets in Mount Pleasant and downtown are pricing buyers out of the market, Summerville and parts of North Charleston have been picking up the slack, thanks to good schools and more affordable homes.
“There has been a lot of growth in Summerville in the past year,” says Sara Perry, director of marketing and communications for the Charleston Trident Association of Realtors. “From January through November 2004, 1,475 units were sold, with a median price of $147,900. During the same time period this year, 1,728 units sold, with a median price of $155,455.”
Summerville
Summerville’s median home value in 1994 was $90,050, says Perry. “So in the last 10 years, home values have appreciated 72 percent. I literally had to double-check that. Talk about a good investment.”
Past president of the Board of Realtors Jeff Bowers has worked for ReMax in Summerville and North Charleston for 20 years. “There’s been a lot of growth and appreciation in North Charleston. And there is a lot of new construction past Ashley Phosphate near the mall, along the Dorchester corridor, Westcott and in Summerville in the Knightsville area.”
He says that home prices in Park Circle and around the old Navy base have almost doubled in the last four years. Formerly an affordable area passed over by homebuyers, Park Circle has been cleaned up in anticipation of the Noisette development. “Now a lot of people are moving to that area or are buying investment property. I think we’ll continue to see a lot of that in the North Charleston area.”
Mount Pleasant
Mount Pleasant has also seen an increase in both the average and median single-family home prices for several years. January through November 2003, 1,983 houses were sold with a median price of $223,000. During the same period in 2004, fewer houses were sold—1,887—but the median price was $260,000. “It’s directly related to the building cap permits on single-family homes,” says Perry. “From 1994 to 2004, homes appreciated east of the Cooper River 124 percent.”
“I think there’s been a lot of pressure on prices because of permit allocations,” says David Kent, a buyer’s agent with The Real Buyer’s Agency in Mount Pleasant. “Without a lot of new construction, the value of resales has gone up a lot. If you’re able to build a house in a certain price range, you can sell it. There are a lot of young investors buying property and building spec homes.”
Condominiums
Every region of the Lowcountry has witnessed growth in condominium development, conversion and sales. “About five years ago, we saw a lot of appreciation in single-family homes, especially in the north area,” says Bowers. “Homes are not as affordable as they used to be, so townhomes have become an option for a lot of singles, young families and retirees.” He says that Portrait Homes has built several communities in the Coosaw area, on Highway 78 and on Greenridge Boulevard, starting around $100,000.
Condo conversions were also big for Mount Pleasant’s first time homebuyers, says Kent. “Price range was what it was about. There’s still a lot of demand in Mount Pleasant, but if there’s no inventory, buyers are going elsewhere. Daniel Island and Summerville are able to capture a lot of the people who are going elsewhere.”
Daniel Island
Daniel Island’s 2004 residential sales volume exceeded $225 million, and over half the real estate transactions were multi-family. “Over the last 12 to 18 months, we’ve had over 600 condo transactions, with a price range from the low 100s up to just under a million,” says Matt Sloan, chief operating officer of the Daniel Island Co.
In 2004, Daniel Island introduced 200 River Landing Drive, with 250 units of new condo construction. All 300 units of the highly successful condominium conversion, Daniels Landing, were sold. “The centrality of our location has been a key factor in our success, particularly due to the area’s growth curve moving more toward the Summerville and Goose Creek area,” says Sloan.
Urban planning
There is a big demand for vacant land in Mount Pleasant. Developments are moving farther out of town due to lack of available property within the boundaries of Interstate 526. “To contain sprawl, people are having to go in and buy infill properties, any place they can find them,” says Kent. “Any places where there are three or four lots left over in a development, people gobble those up to build a house. A good example of infill is this year’s spate of condo conversions.”
Decisions made by local leaders have changed what’s on the market. Planning has increased the lot size, so the geography of the area is definitely expanding, Perry says. “It’s sprawl basically. Look at the commutes people have and how spread out the neighborhoods have become.”
To combat sprawl, the developers for Magnolia and Noisette are looking at ways to plan for mixed use and infill developments. And one of Daniel Island’s key marketing strategies is its mixed use appeal. “People can live, work, play, shop—for years we have sold off of that imagery and now it’s a reality. Having a little town on the island is a major selling point, and there are more and more businesses providing neighborhood services,” Sloan says.
Amenities
Both the move-up market and retirees are not as interested in buying bigger homes as in getting nicer features. “Empty-nesters may be downsizing, so size may not be much of an issue,” says Kent. He adds that both groups like custom features, such as moldings, hardwood floors, plumbing and light fixtures, and good views.
Buyers are choosing homes with open, well-lit floor plans, and are adamant about having some kind of home office, either for personal use or for running their own business. Amenities are also important, walking trails, golf courses, swimming pool and proximity to beaches and shopping.
Predictions for 2005
Charleston County and North Charleston still have problems with their school reputation, such as which Bowers believes is one of the things the area will have to overcome. “It’s why a lot of people are turning to Berkeley and Dorchester counties instead,” he says.
The addition of two schools will increase Daniel Island’s selling proposition. A preschool, Daniel Island Academy, is already open and the new Berkeley County public kindergarten through eighth grade school is expected to open in 2006. In 2005, Daniel Island Real Estate will introduce two new collections of home sites on the Ralston Creek golf course and the new Smythe Park neighborhood on the south end of the island.
“Smythe Park is extremely close to the new school, so we’re programming it with young families in mind,” says Sloan. “Next year should be big for both single-family homes and condos.”
Mount Pleasant growth is expected to be somewhat limited in 2005 until the construction cap is lifted. “Even if they lift the growth cap, and there is no indication that they will, there are not many buildable lots,” says Kent. “There is more and more pressure on buildable land, and we will see most of new developments go to Summerville, Goose Creek and Moncks Corner.”
“Home prices in the north area have been going up, and I expect that will continue,” predicts Bowers. “Homes in the $200,000 to $400,000 range don’t stay on the market very long. If your house is in good shape and good saleable condition, you can get a good price in any of the neighborhoods.”
From the tri-county perspective, Perry says that the Charleston area has been strong for a while and hasn’t seen any kind of slowdown. “Interest rates have been lower, and as stocks became a less safe option, investors turned to real estate for a safer option. The economy is on the way back up, but it won’t affect us,” she says.
She predicts that in 2005, median prices and sales will still be higher. “The rate of increase is going to change, but the increase is still going to be there. People are still coming here, in every demographic. That’s part of Charleston’s appeal. There are so many great things drawing people to Charleston, the real estate market is not going to crash. It’s just too great an investment.”
Sarah Moïse covers residential real estate for the Business Journal. E-mail her at smoise@crbj.com.
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