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Residential development slower but steady
By Kathleen Dayton
Staff Writer
Before the housing market weakened, a number of area developers had plans for major residential projects that would mean hundreds of rooftops along with luxury amenities, neighborhood retail and, in some cases, schools, civic buildings and other services. It seemed the Lowcountry was going to welcome not only new subdivisions but whole new communities as well.
Today, roughly two years since home sales began to sag, commercial construction is picking up steam where residential construction has taken a break.
“We’ve shifted our focus to commercial and have planted some seeds that are going to help validate Carnes as the new downtown business address for this part of Berkeley County,” said Matt Sloane, president of The Daniel Island Co., which is developing a community of about 6,000 homes in the area of Carnes Crossroads on U.S. Highway 176.
During the past 12 months, The Daniel Island Co. has announced plans for a school, a church, a hospital and a shopping center anchored by a Harris-Teeter supermarket at Carnes. Northwood Assembly church and its preschool and elementary school are relocating to Carnes from Rivers Avenue in North Charleston, where their facilities last year were damaged by fire. Roper St. Francis Healthcare chose Carnes for a new medical facility and Charlotte, N.C. developer Lincoln Harris is overseeing the supermarket and shopping center.
Infrastructure is now going in for the first phase of new homes at Carnes.
More modest approach
“We’re being more modest in the amount we’re putting out there,” Sloane said. “We’re not going to flood the market with home sites like somebody would have done in 2005. We’ve experienced some permitting delays on the residential side that are going to end up being a bit of a blessing. We originally planned on delivering homes at the end of 2007 and now it will be the end of 2008. All our indicators point to that (time) being a better series of market conditions.”
Not far away, Gramling Brother Real Estate & Development is still moving forward on its 10,000-unit Cane Bay Plantation, where it also has been concentrating on the commercial aspects. The development is also in Berkeley County, northwest of Carnes Crossroads.
“Residential (development) all over Charleston has slowed, but commercial has picked up,” said Mark Cherry, Gramling’s vice president of construction. “Overall, Cane Bay has been moving forward continuously. We haven’t seen the downturn that a lot of places in Charleston have. The commercial relies on the residential, but we’re seeing lots of movement on the commercial side of things.”
Cane Bay High School is set to open in fall 2008, Cherry said, and the elementary school will open in 2009.
Del Webb Charleston, a retirement community building in Cane Bay, plans 1,000 homes and has sold 130 in its first phase. Centex Homes and First Coast Homes have also launched sales in Cane Bay.
In Summerville, The Ponds officially launched sales April 5, as 26 lots have been sold and four custom homes are under construction.
“Our first homeowner will be moving in one week,” said Penny Davis, sales manager for The Ponds.
Other than some grand opening price initiatives, Davis said The Ponds has not altered the pricing it had planned, nor has it scaled back on the 1,950 units it plans to build on 850 acres. The rest of the 2,000-acre former plantation will be kept in a conservation easement and will be criss-crossed with walking trails. A 19th-century farmhouse on the site has been restored as an amenities center, and a 25-meter pool has been completed, along with a lakeside amphitheater where the community can hold concerts and other events. In addition,
The Ponds will be the site of a new YMCA, which recently broke ground, and a new fire station and emergency medical services facility is slated for completion by the end of the year.
Buy now
“The market’s going to tell us what we can and cannot do, but the indicators that we’re getting in new home sales is that the market’s starting to turn up,” Davis said. “That’s when the price starts to go up, so if people are in the market for a new home, they better be buying now.”
David Seiders, chief economist for the National Association of Home Builders, said in February that buyers who had been sitting on the sidelines were starting to research new home purchases, given improving affordability and the large selection on the market.
“That said, builders know there’s a difference between people looking and people buying, and their current outlook remains quite subdued,” Seiders said.
The Charleston Trident Association of Realtors will release tri-county home sales figures on April 10, but year to date through April 4, the median price of a single-family home in the Lowcountry had dropped compared to the same period last year.
In 2007, there were 2,568 single-family homes sold from Jan. 1 through April 4, compared with 1,584 homes sold during that period in 2008, a drop of 38%. Days on the market lengthened to an average of 106 days in 2008 compared to 78 days in 2007, and the median home price in the Lowcountry fell from $219,000 in 2007 to $206,208 in 2008, year to date, a decline of nearly 6%.
Vic Mills of Blanchard & Calhoun Commercial Real Estate in Augusta, Ga., is developing Poplar Grove, a 1697 rice plantation on Rantowles Creek, and said interest is stronger this spring than a year ago. He thinks the conservation-driven focus of the community is filling a niche.
“The consumer is more and more concerned about the environment,” Mills said. “Not just in Charleston but in our other communities, we’re seeing the greatest interest and high sales activity taking place in the environmentally oriented communities. People are now more interested in how the entire community lives, rather than in the individual homes.”
Poplar Grove has placed 3,100 acres in a conservation easement and plans about 450 homes instead of the 7,000 home sites that were originally approved. The community will have an equestrian center with stables built using sustainable “green” building materials. Entry-level pricing is $500,000.
“We are in the upper middle and upper price ranges, which has certainly experienced a downturn like anything else, but we probably have less inventory in those markets,” Mills said. “We have no national or tract builders in our community, so we don’t have excessive inventories. The biggest negative is that people who want to move to communities like Poplar Grove still have to sell their home somewhere else.”
Mills hasn’t seen property appreciation in the past year, but he hasn’t seen depreciation, either.
“The momentum of Charleston and the number of people wanting to move to Charleston will cause Charleston to recover at a relatively accelerated pace as compared to other similar-size Southeastern markets,” Mills said. “We’re actually seeing more traffic this spring than we did last spring. In the past 30 to 45 days, it’s the best it’s been in a year. It’s very encouraging.”
Kathleen Dayton is a staff writer for the Business Journal. E-mail her at
kdayton@scbiznews.com.
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