Local housing market adjusts to new normal

The Charleston area new homes market isn’t what it used to be, with single-family-home construction permits hovering around a third of the numbers seen before the real estate crash. But builders say they are adjusting to the new normal and trends appear to be improving.

“I would say we’re not seeing a whole lot of opportunity to increase prices, but there are more people out there looking,” said Jason Esposito, sales manager for the Charleston division of Charlotte-based Eastwood Homes. “We’re going through what is out there a lot quicker than we were before.”

In the new-home market, as in the existing-home market, sales fell sharply when the economy soured. The most positive sign that builders are seeing today is a substantial reduction in the inventory of homes for sale.

“At the peak of the downturn, when it was just a bloodbath, there were about 12,000 units on the market,” Esposito said.

That peak came in the spring of 2008, when there were 11,879 homes for sale in Berkeley, Charleston and Dorchester counties. As of September, there were fewer than 8,000 homes on the market, representing a five-year low.

The supply of available homes is still historically large, with about twice the inventory levels of 2004, and prices are depressed. But sales volume has stabilized and some builders are reporting increasing demand.

“We were the largest builder in Charleston last year, and we have some positions that continue to do well,” said Will Cutler, Pulte Group’s division president. “Our Del Webb/Cane Bay position continues to do well, and our entry-level positions are about where they were last year.”

Del Webb is an age-restricted community for older adults in the massive Cane Bay Plantation development in Berkeley County. Pulte includes Del Webb and Centex, which is building the Old Rice Retreat community in Cane Bay.

Value focused

Cane Bay Plantation master developer Ben Gramling said about 1,000 residences should be completed or under way by year’s end, an increase of about 200 from last year, but only about a tenth of the number of residences expected eventually. Gramling’s company expects the number of homes constructed yearly to increase to between 300 and 350 as builders increase activity.

Driving through the huge Cane Bay Plantation site, which includes multiple new-home communities under development by six builders, construction is clearly under way in many locations, and site-preparation work is under way for the next phase of the Del Webb senior community.

“Charleston is not immune to what is going on in the world, but it’s far better than other places,” Gramling said. “I think everyone has readjusted, and they are getting buyers. I think there is a more positive tone in the air right now.”

Esposito of Eastwood Homes said the company expects a solid rebound in sales this year.

“We closed 81 houses last year, which was really down for us,” Esposito said. “We’ll do 135 to 140 this year.”

Eastwood has been selling homes at Swygert’s Landing on Johns Island, building entry-level homes at Sophia Landing in Goose Creek and is clearing land now for the more upscale Retreat at Beresford on the Cainhoy peninsula.

“We used to be really focused on the entry-level home buyer; $140,000 to $190,000 was our sweet spot,” Esposito said. “Now, $150,000 to $300,000 is our range.”

Research by the Real Estate Information Service, which provides statistics for the Charleston Trident Home Builders Association, found that the Charleston area is home to four of the state’s top 10 new-home communities. Cane Bay Plantation tops the local list, followed by two West Ashley developments: Carolina Bay and Bolton’s Landing.

Pulte Group accounts for the largest sales numbers at Cane Bay and Carolina Bay.

“I think consumers are much more focused on the value of the home they are buying, as opposed to the features we may have offered four years ago,” said Culter of Pulte Group. “We definitely sell more smaller square footage homes.”

“Little things that allow them to save a few dollars on energy use — that’s something people are very focused upon,” he said. “If you can show it’s good for the environment and something that helps them save money, a number of consumers are willing to pay for that.”

Back to 1987

The Real Estate Information Service reports that the number of permits issued to build single-family homes could end 2011 slightly higher than last year, but last year was a low point when just 2,780 were issued for the three counties combined.

Mary Graham, the Charleston Metro Chamber of Commerce’s senior vice president for public policy and regional advancement, puts the numbers in perspective.

“We’re at the levels we were at in 1987,” she said. “Overall, we’re still looking pretty flat, though there’s been a little pickup.

“The other numbers that we track, retail sales and employment, they aren’t going down any more, and we are starting to see a recovery,” Graham said. “I think that there is still just a lot of uncertainty, and that’s keeping people from doing a lot.”

Home front

Top-selling new home communities in South Carolina:

Rank | Community | Region | Closings (Jan.-Aug.) | Avg. price

1 | Carolina Lakes | Charlotte | 123 | $286,681

2 | Cane Bay | Charleston | 110 | $229,608

3 | Prince Creek | Myrtle Beach | 74 | $267,661

4 | Carolina Bay | Charleston | 70 | $261,625

5 | Lake Carolina | Columbia | 69 | $235,875

6 | Sun City | Hilton Head | 58 | $281,770

7 | Boltons Landing | Charleston | 49 | $203,826

8 | Wellesley | Columbia | 48 | $173,716

9 | Gardendale | Charlotte | 46 | $280,839

10 | Spring Grove | Charleston | 46 | $195,968

– Source: Real Estate Information Service

Reach David Slade at 937-5552.