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Strong demand prompts auction for I’On lots
By Sarah G. McC. Moise
Staff Writer
Eight years ago, skeptics questioned whether a “traditional neighborhood design” concept would work in Charleston’s suburban setting where sprawling homes and large yards dominate.
The answer appears to be “yes” as real estate values in Mount Pleasant’s I’On development have increased more than 20% per year since 1998, its first year of development. I’On now has 500 families who call it home. Next month, interested buyers have a fair and perhaps final shot at the award-winning neighborhood.
On Feb. 17, the I’On Co. will auction off 25 marshfront and interior home-sites. Due to strong interest in the few remaining homesites, the auction offers a fair and equitable method for buyers to acquire the homesite of their choice. This is the first auction of its kind in the Charleston area.
“Of the 762 home sites in I’On, we have 100 left. But this is really the last run of the premier marshfront lots in Montrose Borough,” says Chris Anderson, broker-in-charge of I’On Realty.
The philosophy behind the 243-acre I’On community is to create a neighborhood that enhances the social, economic and environmental aspects of life. I’On has been nationally recognized for its use of smart growth design and as a model for land planning for a sustainable future and has been named “Best Neighborhood in the Nation” and “Best Smart Growth Neighborhood in the Country” by Professional Builder magazine and the National Association of Home Builders.
Previous homesite releases over the last four years have been done through a lottery system. “We’ve had maybe five lotteries, releasing between 25 and 40 lots at a time,” says Anderson. “I’On has had some feedback from customers that they were disappointed that they didn’t get the lot of their choice and didn’t like that selection was decided by random luck.”
In a lottery system, which is also the preferred method of popular neighborhood developments on Kiawah and Daniel Island, perspective buyers submit paperwork with their top choices. Names are drawn from a hat and assigned to a lot.
Anderson says many people wanted the same 10 lots and were frustrated when they didn’t get their first choice. “People said they didn’t feel in control, and this is a very emotional purchase. It’s where you’re going to build your custom home. If they like a certain lot, they want more control in attempting to purchase it.
“We think an auction is a fair way to do that process, which gives our customers more control over their own destiny. But it’s untested in this market. I don’t know about anyone else who had tried it here,” he says.
While Anderson can’t say yet whether the new method will also yield higher sales prices for the lots, explaining that it all depends on the demand, I’On had more than 250 inquiries from 20 states from Maine to California in the first week alone.
Tranzon Hagen, a real estate auction company based in Carrolton, Ga., is overseeing the auction in conjunction with I’On Realty. Kim Hagen, who is handling the I’On auction, says that momentum in the auctioneering method has increased drastically since 2000.
“Sellers like this method because it’s quicker—there’s no holding or listing period. And the selling value is sometimes higher than they expected. Buyers like it because they feel they are getting a fair price and fair opportunity,” says Hagen.
“Buyers in I’On were complaining they would have paid more if they could have had the lot they wanted, so I feel very good that the market will be very competitive,” he adds.
The National Auctioneers Association reports that land and agricultural real estate gross sales increased from $19 billion in 2003 to $21.8 billion in 2004—the largest increase in auction areas for the year.
“We’ve seen more interest in the auction than the lottery, partly because we are winding down with only 100 lots left total,” explains Anderson. As the development nears final build-out, it is anticipated that the last homesites will be made available sometime in early 2006.
Since 1998, approximately 17.5% of sales in I’On have been to residents. “Our current residents are always our best sources of customs for new purchases. They liked the building process, and after living in a home here for a few years, they get inspired by what their neighbors are building and are intrigued with the idea of a new home.”
Buyers of the properties will still have to wait to build and are subject to the same requirements as any other home purchasers in Mount Pleasant.
“The building permit allocation system has definitely affected the ability of our customers to start their home at their desired point. It takes four to six months or longer, and last year we had some people who waited nine months,” says Anderson, adding that it has influenced some of his clients to purchase elsewhere.
However, he says buyers understand that custom home building may be easier this year than in the past. “They may not have as long a wait. They’re already out of permits available for the first quarter of 2005 but are taking applications for second quarter.”
It is recommended that interested buyers pre-register for the auction at the I’On Realty office located in I’On by Feb. 15. Participants will need to prove they have certified funds of $25,000 and a driver’s license, and will need to either attend the auction or be represented.
Participants are invited to preview the homesites and attend a special information session and auction preview on Feb. 12 at the Creek Club in I’On. The auction will take place at the Creek Club in I’On on Feb. 17.
Sarah Moïse covers residential real estate for the Business Journal. E-mail her at smoise@crbj.com.
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