Condo mortgages comes with extra stipulations. Some examples:
More than half of the condo units must be owner-occupied.
No owner may own more than 10% of the units.
No more than 15% of owners can be delinquent on their condo dues.
All amenities must be completed if the development is more than a year old.
Buyers whose down payments are less than 25% of the sale price pay an additional 0.75% of the loan amount at closing or a higher interest rate, usually by about 0.25%.
Earlier this year, Steve Rosenberg decided it was time to downsize from his large, two-story home on Chapel Street in downtown Charleston.
Year Sales Median price
2012 1,163 $152,750
2013 1,311 $170,827
Year Sales Median price
2012 182 $112,000
2013 210 $135,250
Year Sales Median price
2012 102 $92,000
2013 146 $99,950
Source: Charleston Trident Association of Realtors. Figures for Jan.-Sept.
That prompted the 67-year-old College of Charleston music professor to recently buy a condominium in Shelmore Village, a mini-downtown between a Bi-Lo shopping center and I’On Village in Mount Pleasant.
“I was also just ready for a change,” Rosenberg said. “Here it’s just so easy. I pay the (homeowners association) fee each month and that pays for everything including insurance, so I don’t have to worry about a roof or painting or stuff like that.”
Retirees John and Anne Yancey traded in their home in Cincinnati for a unit in the Parkside condominium on Daniel Island. Eager to move closer to their daughter and her family on the island, the Yanceys rented in the condo community for several months before they recently found one to buy.
Being close to family was also the reason Leigh and Ann Moore recently purchased a unit in Parkside, making a second home for the semi-retired couple from Huntsville, Ala.
“We still have our house here (in Alabama) and we will keep it until we decide if we want to live on Daniel Island (year-round),” Ann Moore said.
The three buyers reflect the resurgence of a corner of the housing market that had been bogged down for years by the last recession and the lengthy real estate downturn that followed. There’s even some new development plans in the pipeline.
Locally, at least, the rebound is being fueled by a combination of a strengthening economy, growing population base and greater availability of credit.
The uptick in Charleston mirrors U.S. trends. The National Realtors Association reported that condo sales nationwide are up 8.9 percent through September.
The Charleston Trident Association of Realtors does not categorize the condo market specifically, but the agency’s data on “condo-townhomes” sales are showing strength this year.
The most active area in the region has been Charleston County, which had 1,311 such sales in the first nine months of the year at a median price of $170,827. That’s an increase of 12.7 percent in sales volume and nearly 12 percent jump in prices from the same period of 2012, according to the association.
The condo market is also seeing buyers paying cash for units, bypassing mortgage requirements that are often more stringent than single-family financing.
Such cash-only deals have been popular on some high-end developments like The Tides in Mount Pleasant and Bee Street Lofts in downtown Charleston, industry officials say.
While there is no data that breaks down the demographics of buyers in the region, anecdotal evidence suggests that most of the purchasers are first-time owners and empty-nesters.
“Those considering condos appear to cover a wide range, from young professionals seeking a starter home, to pre-retirees looking for a second home, to retirees who are downsizing,” said Julie Dombrowski, spokeswoman for the Daniel Island Co.
The Daniel Island Co. reported that condo sales accounted for half of the 169 single-family sales through October, up 15 percent compared with the first 10 month of 2012. The average sale price for those units was $298,000, a gain of nearly 15 percent, she said.
Other condo communities are reporting similar trends.
“This is mostly a segment for those who are buying their first property and even some who are buying a second home with the intent to make it their permanent home in a few years,” said Will Jenkinson, broker-in-charge for Carolina One New Homes, which is marketing condos at several communities offering various price points. They include The Tides in Mount Pleasant, Arboretum in West Ashley and Palmetto Place near Daniel Island.
As the condo market regains its strength, experts warn about dwindling supply, which is pushing prices higher nationally.
The situation is partly the result of the fact that some proposed projects were shelved during the housing downturn.
Other properties were converted into rental units as banks tightened their mortgage-lending standards.
“When you look at supply figures, they’re pretty tight,” said Walter Molony, a spokesman for the National Association of Realtors. “In the condo market, it’s a 4.8-month supply, and it needs to be at a six-month supply to have a balance.”
Rising prices are welcome news for investors like Dave Wertan, who’s been in a holding pattern, waiting for the day he can start selling the dozens of units he owns.
“I’ve got over 100 condos myself and had to turn them into rentals,” he said. “I actually had a few sales this year, but I had to discount the price really low.”
Wertan, who is also a RE/MAX broker in Mount Pleasant, has closed six sales so far this year, all cash. Among his largest holdings are dozens of units in the Cedars in Windsor Hill development in Summerville. Wertan said he will keep renting the unsold units until he feels he can get a good sale price.
“I need to wait for them to come back in value,” he said.
Many hiccups in the condo market have been tied to the far-reaching effects of the recession that began in late 2007.
High-profile projects such as The Tides, Bee Street Lofts and Shelmore Village were completed just as the housing crisis was starting. In many cases, buyers who had committed to purchases learned they no longer qualified for mortgages. Others walked away as values of the units they planned to buy fell along with the broader real estate market.
This year, all three communities are reporting strong sales.
The Tides and Shelmore Village were acquired by new investors, which promptly cut the list price of unsold units to attract buyers.
Charleston-based firm Ecovest Development LLC cut the price of 31 unsold units at Shelmore by roughly half of what they were in 2007. That was enough to sell out of all the units, which ranged from $275,000 to $395,000, officials said.
In the case of The Tides, prices were slashed at an average 35 percent. The price-cutting was enough that 19 of 35 units sold changed hands in all-cash deals, Jenkinson said.
With sales rebounding, condo developers are looking to come off the sidelines.
One local example is a plan to erect condos at a former ice factory at 24-30 Woolfe St. in downtown Charleston. A company has submitted plans to the city seeking the OK for dozens of condos to be housed in an eight-story building over two levels of parking.
Near Daniel Island, Xcelsior Palmetto LLC has acquired 51 unsold units at Palmetto Place, a 73-unit project off Clements Ferry Road. The new owner is now looking into whether to add 100 more, said Jenkinson, who is involved in the deal.
Reach Tyrone Richardson at 937-5550 and follow him on Twitter @tyrichardsonPC.
Steve Rosenberg talks about downsizing to a Shelmore Village condo from his downtown home. Wade Spees/Staff Tuesday November 12, 2013×
Communties such as Shelmore Village are seeing new life.×
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