At a condominium building on Dorchester Road in North Charleston, where one-bedroom units were offered for nearly $70,000 during the housing boom, one lender is now giving a condo away.
“They just didn’t want to deal with it, and asked if we would take it,” said North Charleston Mayor Keith Summey.
Wells Fargo & Co. is in the process of donating a foreclosed-upon condo at Regency Square to the city, which plans to use it for affordable housing. It’s one of many condos that have been foreclosed upon during the past several years at the complex near the Air Force base.
Summey said the condo might be used to house people transitioning from homelessness.
While the Charleston-area market for single-family homes continues to recover, Regency Square is an example of the exuberance seen at the height of the housing market bubble, and a vivid example of how apartment-to-condo conversions particularly suffered in the crash that followed.
When real estate prices were soaring in the mid-2000s some businesses started converting apartments to condos and selling the units rather than renting them. The B&B Flynn Corp. had purchased the award-winning Regency Square apartment complex in 2004, for $4.18 million, and the following year started selling the small units as condominiums.
Regency Square was built in the 1970s, and features 110 units on two levels, with exterior hallways and entrances not unlike those at a motel. All of the units in the rectangular building open onto an interior courtyard with a pool, artificial putting green, and other amenities.
Those units were offered for sale in 2005, starting at $69,900. Few sold for that price, and most remained unsold after the asking price was slashed to $50,000.
By the end of 2010, nearly half the condos at Regency Square were going through foreclosure, and one sold that year for just $32,000.
“The original foreclosures really hurt us because they stopped paying their regime fees, and that almost bankrupted us,” said Roy Grantham, a condo owner who has served on the homeowner’s association board. “There were some maintenance issues and a lot of the long-term people moved out.”
For those living at Regency Square, that meant living in a complex where many of the condos were vacant. And the foreclosed-upon units weren’t paying their condo dues, so those who owned the remaining units saw their dues more than double.
Fast-forward to 2013, and many of the condos have been through foreclosure and have been sold to new owners at reduced prices. Just about a dozen of the 110 condos are now owner-occupied, in most cases by people who bought them in 2006 or 2007.
“It hurts because the values have all gone down,” said Grantham.
Charleston County values the condos at $38,000 each, for tax purposes. Most of the units are currently owned by out-of-state investors.
One of the condos will be owned by North Charleston, and the mayor has told City Council members that the city may give it to Crisis Ministries, which operates a homeless shelter in Charleston.
“We’re going to turn it into affordable housing for someone,” Summey said. “We want it to go into hands that will use it to help people.”
Anne Jackson, annual fund manager for Crisis Ministries, said the organization is interested in getting more details from the city.
“It will take board action for us to accept it and we do not have all the details yet to do that,” she said.
Wells Fargo Corporate Communications Manager Josh Dunn said the condo donation is part of a broad effort by the bank that has donated more than 3,000 properties since 2011.
“We have programs that donate or sell the properties to government entities or housing intermediaries that have a history of providing sustainable affordable homeownership or rental properties to low-to moderate-income families,” he said.
At Regency Square, despite the condos apparently being worth considerably less than in 2005, Grantham said the situation has been improving. And the idea of one unit being turned into affordable housing doesn’t concern him.
“As long as the people aren’t causing trouble, I don’t care who lives there,” he said.
Reach David Slade at 937-5552 or Twitter @DSladeNews.