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Charleston follows trend in upscale condominiums
By Nadia Shamsedin
Contributing Writer
Can the nation expect to experience a housing bubble? The flurry of residential real estate development in the Charleston metropolitan area has many people asking that question, but experts speaking recently at the Counselors of Real Estate conference in Charleston say they don’t think so.
“Everybody needs to be housed; there’s a shortage of housing, pricing may change, people’s perspective of value may change, but there still are going to be producers of product,” said CRE moderator Jim Curtis.
Other experts at the CRE attribute this upscale residential boom to the demand for high-end condominiums.
Richard Hanson, with Mesa Development in Chicago, said the realities of growth are based on changing demographics, zoning, quality of product and location. Part of the rising demand for condos stems from empty nesters and retirees who want to live where they were born or near their adult children.
But the appeal of condominium living is not limited to an older population seeking to downsize from a large single-family home. Young professionals who wish to live in areas closer to work, shopping and social venues are also looking to condominiums as the alternative to living in traditional single-family homes in suburban neighborhoods, Hanson said.
Permissive zoning for building condominiums is reshaping communities. Rezoning for residential construction near employment centers eliminates commute time for residents.
Hanson was also careful to point out that “we don’t just build condos and say let’s see who comes and buys it.”
Market study and analysis determines building projects based on demand.
For instance, in the San Jose, Calif., valley where Hanson has a project underway, there is a shortage of 34,000 housing units. The median price for a house in the valley is $740,000. At $600 per foot, that comes to $720,000 for a 1,200-square-foot condo. Construction costs in the Charleston area are not at California levels, but the demand exists.
Building condominiums is good business for developers, Hanson said. With pre-sale levels between 65% and 70%, developers are nearly assured construction loan repayment, which significantly lowers their risk.
Also, by including contract restrictions, such as no flipping and no multiple sales, developers can control a large percentage of units being sold to investors.
With an increasing selection of upscale condominium properties in the Charleston area competing for buyers, new buildings will have to offer more amenities than just a gate and a swimming pool.
Examples of local high-end condominium developments include:
The Village at Wild Dunes, for which developers broke ground in November 2005, is expected to be completed by fall 2007. Phase One is offering 115 units with oceanfront views on the Isle
of Palms.
The Renaissance at Charleston Harbor offers residents gourmet kitchens featuring granite countertops, custom-made cabinetry and Sub-Zero, Thermador and Bosch appliances. Concierge services, a private entry, a health club and a caterer’s kitchen are also part of the offerings.
At The Tides, which overlooks the Cooper River in Mount Pleasant, Buildings One and Two have already sold out. Building Three has a limited number of residences available with prices from $800,000 to $3.5 million. This building will offer sauna, steam and massage rooms, a therapeutic whirlpool and a juice bar. A library and media room with high-speed Internet access will be built on the second floor. Adjacent to Mount Pleasant’s planned $4 million waterfront park, The Tides will have a rooftop terrace providing views overlooking the harbor.
“We all want to live the life we dream about, and fortunately, we live in a time where we can do that,” Hanson said.
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