Roster of new homebuilders growing with sales
Atlanta developer Ashton Woods Homes is planning to construct some of its first Lowcountry homes in the Carnes Crossroads planned community in Goose Creek.
Arthur Ruttenburg Homes franchisee Coastal Premier Homes has its eyes on Charleston, Mount Pleasant and Daniel Island. Lael Building Group recently uprooted its Winston-Salem headquarters and moved it to Mount Pleasant.
The three are among a wave of homebuilders from off that are kick-starting operations in the Lowcountry.
Drawn in part by the rebound in home sales and by big-name employers such as Boeing, the developers are looking to make inroads in a rising market, said Phillip Ford, executive director of the Charleston Trident Home Builders Association.
“They see Charleston is a growing market and they feel like the home price points they’re going for works and they see some potential and market share here,” Ford said.
For Ashton Woods, the expansion has been years in the making.
“We certainly don’t do anything flippant. We have always kept our eye on the Charleston market,” said Hampton Pitts, executive vice president. “We have really studied it hard for the last 18 months.”
Ashton Woods Homes is looking to grow beyond its 11 markets largely concentrated in the South. Its expansion includes adding footprints in Georgia and North Carolina.
“We continue to expand and grow, and Charleston is a natural expansion opportunity geographically,” Pitts said.
The firm builds homes he described as above the average sales price. Locally, the company is still aligning its acquisition and sales staff to target places in Summerville, Mount Pleasant and Daniel Island.
“We create all home plans for the specific market and community,” Pitts said. “We believe that Charleston is a market that appreciates quality architecture and has a good history of quality architecture.”
Another Atlanta developer, Brock Built Homes, is eyeing new home developments in Goose Creek and on Johns Island, according to Steve Brock, founder and president. It plans to start construction on its first Lowcountry homes within two months.
“The motivation is we think Charleston is a great long-term market that is stronger than the Atlanta market,” Brock said.
New builders are moving in as the region’s housing market has been posting robust sales.
The Charleston Trident Association of Realtors reported that 1,028 homes sold at a median price of $200,000 in April, up 22 percent compared to the same month in 2012.
April’s sales data nearly mirrored the 1,089 homes that changed hands at a median price of $210,000 in April 2007, just eight months before the start of the brutal last recession.
The strong sales includes newly constructed homes. There were 757 new homes sold between January and April this year, up 19 percent from 2012, according to Real Estate Information Service Inc.
Construction activity also is moving higher. Work began on 1,225 new homes through the first four months of this year, up 22 percent from the same period of 2012, the firm reported.
The new developers are filling voids left after the last housing crisis forced the local exit of some homebuilders, including big names such as KB Homes. Others, like Summerville Homes and the original developer of the Whitney Lakes subdivision on Johns Island, either failed or sought bankruptcy protection after the market went into a tailspin.
Ford of the builders association said the newcomers won’t necessarily flood the market, which already includes names such as Ryland, David Weekley Homes, Lennar, Centex, Sabal Homes and Eastwood Homes.
“They saw the Charleston market is one that will not be down as much as other markets, and now, with strong jobs growth and home sales, they’re coming in,” Ford said. “They saw a vacuum by names like KB Homes leaving, and now it’s a good time to come in.”
Chuck Lattif, owner of Coastal Premier Homes, part of Arthur Rutenberg Homes, is planning to build some model homes in the area to jump-start sales.
“The majority of custom homebuilders do not invest in model homes,” Lattif said. “It is just not a common practice, but with the Arthur Rutenberg Homes, we do build the model home and furnish it and decorate it very extensively so that the perspective purchaser can see the actual quality we produce and how the space works for practical living.”
Shifting population trends led Lael Building Group to move to the Lowcountry from the Tar Heel State. It offers custom homes, remodeling and interior design.
The company said in a statement that it moved its headquarters in Mount Pleasant to take advantage of the “tremendous growth in the young professional demographic in Charleston.”
“They’re buying their first homes and starting families,” according to the statement.
The wave of new builders also includes local offshoots such as West Ashley-based Southern Shores Real Estate Group. It recently launched Southern Shores Design & Construction Group to add home building to its list of services, which already includes property management, rentals and sales.
The larger pool also adds variety, officials said.
“New builders bring innovation, and increased competition among builders keeps everyone on their toes,” said Bill McKenzie, vice president of development for Daniel Island Co. “So for a company like ours that works with many different builders, the increased number of builders ultimately can lead to better, more diverse residential neighborhoods.”
In addition to the ongoing development of Daniel Island, Daniel Island Co. is the developer of Carnes Crossroads, a 2,300-acre project that could have about 5,000 residences.
McKenzie said the additional builders means more home options for buyers. “I’m not sure the addition of new builders will increase the pace of development of a community like Carnes Crossroads. The market ultimately dictates that,” McKenzie said. “But we have a lot of houses to build as this new community takes shape, so we welcome the addition of new builders in the market.”
Elaine Worzala, director of College of Charleston’s Carter Real Estate Center, said the new developers are following the money.
“They see it’s a diversified housing market, and it has some incredible wins in the market with new jobs and the need for housing,” Worzala said. “There’s employers like Boeing creating jobs, and we don’t necessarily see this type of growth in other parts of the country.”
She added the new homes growth could help keep prices from rising too quickly. She also cautioned that developers must be mindful about overbuilding.
“If new people are coming into an area, you know they have to live somewhere. If you have limited product, you will need to build more but keep from overshooting,” she said. “That’s hard to do because you don’t know what project will go and what permit will get approved, and that’s the stuff that’s hard to tally.”