Real Estate News — Carolina Park trumpets residential milestone; greater Charleston area housing values climb, foreclosures tumble
•Neighborhood hits century mark in home sales•
Give or take a few, agents sold a home every three days to kick off the selling effort at an upper Mount Pleasant planned community.
Carolina Park residential village disclosed its 100th new-home sale late last month. According to backers, the fast sales pace exceeds expectations and shows no signs of letting up.
“We’ve been extremely pleased with the sales pace and are excited to offer an even wider selection of options in the coming year,” says Brian Keels, marketing director at Carolina Park.
The selling team showed confidence “that buyers looking for a new home in Mount Pleasant would respond favorably to what we’re doing here – the quality, value, convenience and amenities,” Keels says. “But I don’t think any of us could have predicted this kind of response and demand,” he notes.
Spread out over 1,700 acres, Carolina Park describes itself as a “family oriented mixed-use residential and commercial community” situated along U.S. Highway 17 in Mount Pleasant. The property takes in Wando High School and Roper St. Francis Mount Pleasant Hospital. As planned, Carolina Park will be home to more than 1,700 families, developers say.
“Things started fast and the momentum has continued to grow,” said Haley Cuzzell, community sales manager.
“In less than a year, 100 families have made the decision to call Carolina Park home,” she says. “That’s a great sign for the development.”
Six top homebuilders currently construct houses in Carolina Park. New-home prices start in the $300,000s and custom homes in Riverside at Carolina Park begin in the $500,000s.
“People are talking about Carolina Park and homes are selling quickly, she says. “Interest rates are low and prices are increasing as demand grows and inventory becomes limited.”
The newly opened Riverside neighborhood, home to custom dwellings on larger private lots, has logged 16 sales under contract. A handful of homes started construction recently, she says.
Carolina Park, located minutes from local beaches and downtown Charleston, this summer opened its Residents Club. Sporting a junior Olympic-size pool, kid-friendly water features, changing rooms and a playground, the new club already finds itself a magnet for residents, marketers say.
“The neighborhood amenities, coastal lifestyle and top notch builder team is a draw for many residents and has helped boost the demand for new homes in Mount Pleasant,” Cuzzell says.
•House prices rise in Charleston area, nation; distressed properties decrease in S.C.•
Lowcountry homes on average finished July 7.2 percent pricier than a year before, although the rate of increase trailed the U.S. and state as a whole.
In a different report, the number of residential foreclosures continued to dwindle in July across South Carolina and the nation. Charleston area figures weren’t immediately available.
Findings stem from CoreLogic’s monthly Home Price Index and National Foreclosure reports, each released in the past two weeks.
Year-over-year home price gains in metro Charleston-North Charleston-Summerville work out to a $7,200 premium on a $100,000 dwelling. From June, prices rose 0.3 percent, or an extra $300 on a $100,000 residence.
House price gains sharpened locally in greater Charleston when distressed sales, such as short sales and properties taken over by the lender, were excluded. Without distressed sales, prices jumped 9.8 percent in July from a year earlier and 1.9 percent from a month earlier.
While substantial, Charleston area home value increases paled in comparison with average gains throughout South Carolina and the country.
CoreLogic, a residential property information and analytics company, found that home prices surged 12.4 percent nationwide in July from a year ago. July marked the 17th consecutive month that home prices rose in a 12-month period. Prices edged up 1.8 percent from a month earlier.
Excluding distressed sales, home prices climbed 11.4 percent in July from the previous year and 1.7 percent from the prior month.
“Home prices continued to surge in July,” says Mark Fleming, chief economist for CoreLogic. “Looking ahead to the second half of the year, price growth is expected to slow as seasonal demand wanes and higher mortgage rates have a marginal impact on home purchase demand,” he says.
“Home prices continue to climb across the nation in July with markets hit hardest during the downturn leading the way,” notes Anand Nallathambi, president and chief executive of CoreLogic.
“Nationally, home prices are now within 18 percent of their peak levels reached in April 2006,” he says.
CoreLogic expects more of the same going forward.
The venture’s Pending HPI expects August home prices to rise by 12.3 percent on a year-over-year basis and by 0.4 percent month-over-month.
Excluding distressed sales, August home prices stand to increase 12.2 percent year over year from a year earlier and 1.2 percent from the previous month.
Nevada remains the state with the highest home price appreciation at 27 percent. South Carolina placed 21st at 8.1 percent.
Taking out distressed sales, Nevada again lead all states, up 24.2 percent. South Carolina prices excluding distressed sales ranked 21st, in a tie with Illinois.
Separately, the rate of homes in some stage of foreclosure in South Carolina declined 0.9 percent from a year before to 2.6 percent in July. That’s a slightly higher figure than the national 2.4 percent rate, which was down 1 percentage point from 2012.
South Carolina ranks seventh highest among judicial states with 9,903 “completed” foreclosures — cases where homes were actually lost to foreclosure — in the past year, according to CoreLogic. Courts are more involved in foreclosures in judicial states than in non-judicial ones. According to CoreLogic, there were 49,000 completed foreclosures in the U.S. in July, down 25 percent from 65,000 in July 2012.
The researcher says 4.5 million completed foreclosures took place across the country in the five years from the start of the financial crisis in September 2008.
As of July, 949,000 homes in the U.S. were in some stage of foreclosure, known as the foreclosure inventory. That compares with 1.4 million in the foreclosure inventory in July 2012, a year-over-year decrease of 32 percent.
“As the housing market continues to recover, the foreclosure inventory is declining quickly,” CoreLogic economist Fleming says. “Continued strength in the housing market will contribute to our outlook for ongoing improvement in the stock of distressed assets through the end of this year,” he says.
“Completed foreclosures and delinquency rates continued their rapid descent in July. Every state posted a year-over-year decline in foreclosures and serious delinquencies fell to the lowest level since December 2008,” company president Nallathambi says.
“Not surprisingly, non-judicial states have come the farthest the fastest in reducing shadow inventory and lowering delinquency rates.”
Florida lead in completed foreclosures in the past years as of July at 110,000 and with the highest foreclosure inventory as a percentage of all mortgaged homes at 8.1 percent.
•Coldwell Banker highlights local business, multifamily real estate trends•
Across the commercial spectrum, the Charleston area shows signs of progressing as stores, offices, apartments and industries spring up.
That’s according to Coldwell Banker Commercial Atlantic International, which unveiled projections for the second half of 2013.
The reports, released in a newsletter, came from Brent Case, Certified Commercial Investment Member, on the retail outlook; John True, multifamily; Jim Davis, office space; and Mike Rose, CCIM, on industrial properties.
In an overview, Case says the metro Charleston retail trade posted a “strong” first half of the year. “We have seen new development deals, vacancy rates have dropped and rental rates have increased,” he says.
Cash-rich corporate tenants drive the market chasing low prices, construction cost and interest rates,” Case says. “The biggest issue restraining further growth is the lack of prime real estate for sale,” he says.
Franchises, meanwhile, spark renewed business. Rebounding from a slow market, “new concepts are popping up every day,” he says. Too, lenders look to free up financing. Meanwhile, “small-shop” rentals maintain reasonable rates. Look for rental rate increases and vacancy rate declines, he says.
Growth in start-up businesses has lagged. “These are harder to finance,” Case says. “For now, these start ups are relying on cash or landlord allowances,” he says.
Keying on apartments, True says the multifamily market “seems to be approaching pre-recession levels” after years of stagnant development.
He cited notable apartment home communities across the Lowcountry ready to open or pre-leasing, including:
• Downtown properties East Central Lofts, a 72-unit complex at Huger and Meeting streets; and Elan Midtown, with 200 units at Spring and Meeting.
• “Impressive” Mount Pleasant projects such as 325-unit mixed use The Boulevard along Coleman Boulevard and 270-dwelling River’s Walk, off Mathis Ferry Road.
• Element at Carolina Bay, a new rental complex in the sprawling Carolina Bay neighborhood west of the Ashley.
• Kilnsea Village, a 168-home apartment community off Dorchester Road in Summerville.
“All and all, this increase of activity shows that the Charleston multifamily development market is hot again,” True says.
In the office segment, Davis focuses on the improved leasing and sales activity in greater Charleston.
“Rents continue to slowly trend upward as the existing inventory is gradually absorbed,” he says. The second quarter rental rate was $21.43, up .4 percent from the first three months.
Second quarter sales transactions reported on the area Multiple Listing Service totaled 20 deals for $13.6 million and an average $121 a square foot, up from 13 sales for $7.7 million and a $111 square foot average in the first quarter.
At the same time, leases grew in the second quarter to 170,275 square feet on 75 transactions from 71 deals totaling 135,207 square feet a quarter earlier.
The greater Charleston vacancy rate stands at 15.6 percent, down 1 percent from the first quarter and below the national 17 percent figure, Davis says.
Even so, professional and business services’ job losses held back demand. “Tenants continue to seek discounted rent and concessions because of still high vacancies,” he says, although it’s less so with top-notch “class A” space. The one new class A property last year was 80,000 square foot Faber Point, while the 100,000 square foot Nexton Office Campus in Summerville is slated to open in early 2014.
The industrial report provided a bullish outlook. “Charleston is now prime for new industrial building,” Rose says. He points out that South Carolina leads the nation “in tires, auto related products and now aviation.”
Boeing’s long-term commitment to metro Charleston, he says, has been “a huge driving force in the market.” Similarly, the Charleston port proves a “key economic engine for South Carolina” with 250,000 jobs dependent on the state’s coastal shipping trade.
“The five (Charleston) port terminals are closer to the open sea than any competing east coast port by a significant margin and excel in quick turnaround times,” he says.
“In conclusion, Charleston has outpaced many major metro markets in new employment and resulting housing growth to rank ninth in U.S. job recovery among the top 100 metro areas,” Rose says.