Charleston area new-home market percolating again

Cane Bay, which has five neighborhoods, was one of the local communities that weathered the housing downturn (Photo by Laura Olsen/Olsen Imagery).

By JIM PARKER The Post and Courier

A housing player thought extinct has resurfaced in the Charleston area this year.

“Developers. Yes, developers,” says Will Jenkinson, broker-in-charge of Carolina One New Homes.

The tumbling housing market had spooked investors who buy up land and prepare them for the next new communities on horizon.

“They have taken a hiatus for a few years,” says Jenkinson, who with research economist Joey Von Nessen provided an update to builders and Realtors of the region’s new homes market June 20 at North Charleston City Hall. But developers are back.

During the housing boom up to early 2007, there were lots of talks about major projects. “Those were put on the back burner,” Jenkinson says.

A few neighborhoods forged ahead, such as Cane Bay in Berkeley County, The Ponds in Dorchester County and Pulte Homes-backed Carolina Bay west of the Ashley.

Just as often, large builders took on the role as developers, buying up vacant lots in existing neighborhoods or starting modest-sized villages.

“You are starting to see a move to small developments, 20, 30, 50 (lots) at a time,” he says.

Examples are Branch Creek in Summerville, the new Woodlands west of the Ashley and Lieben Park in Mount Pleasant — all where a builder is moving in and constructing 50 or fewer homes.

Another development driver has been the conversion of townhomes to single-family lots. Jenkinson says.

The Ponds “townhome square” was an case in point. “There wasn’t a market for them,” he says. The lots were converted to 35-foot widths, and Harbor Homes built close-together “row homes.” Another example was a 96-townhome neighborhood at Grand Oaks west of the Ashley built by now-defunct Portrait Homes. Local builder Sabal Homes bought the property and carved out 72 lots.

Jenkinson focused on the three counties in the region individually and how developers are starting to return:

• Berkeley County. Cane Bay is the top performing community, he says. One lagging Berkeley County settlement last year was Daniel Island. “In 2011, Daniel Island had 40 new home closings,” Jenkinson says. In the first five months of this year, there have been 35, he says. Between Goose Creek and Moncks Corner, the large Foxbank Plantation community has four builders and nearby Spring Grove has three. Berkeley County, he says, is “a thriving county for new home activity for sure.”

• Dorchester County, “The Ponds accelerated sales,” he says. The Greenwood development brought in new builders and adjusted prices downward. Last year, 22 houses sold. There have already been 36 closings this year, and The Ponds leads the county in new home sales. “The highest sales price is $300,000,” he says.

Also in Dorchester County, the semi-established Legend Oaks village where new home construction continues had “really suffered,” Jenkinson says. “Now it’s reenergized.”

• Charleston County. “I really want to highlight Johns Island,” Jenkinson says. “Once it was a place that builders pretty much neglected, a rural part of the county. However, that’s changed dramatically.” Since the beginning of the year, 131 new home sales have closed or are pending. “That’s off the charts,” he says. More than 75 percent of residential sales in the competitive Johns Island market are new homes.

Jenkinson singled out one other market. “Mount Pleasant is an interesting bird,” he says. There’s been 221 closings in the previous six months and what remains is a four-and-a-half month supply. The $300,000-$450,000 range is most active. “That’s where the hole in the market is. For home builders and developers, that means opportunity.”

Jenkinson believes the moratorium on home permits that Mount Pleasant enacted in 2005 sent new home builders fleeing to Dorchester and Berkeley counties. Custom homes accounted for much of the new construction. Permits lagged as the housing downturn stretched on, and the moratorium went away.

“That’s had an impact on activity.” Jenkinson says. “It dropped from a buyers market to a sellers market in less than a year. You have seen the return of the new home community market in Mount Pleasant.”

According to Jenkinson, the reemergence of developer influence has rekindled long dormant projects.

“We have the reopening of Carolina Park later this summer or early fall,” Jenkinson says. Ryland Homes and David Weekley Homes will be the first to build in the vast community near Wando High School.

The Carnes development, backed by Daniel Island Co. and located near U.S. Highways 17A and 176, has lined up builders: Pulte, Sabal, Eastwood Homes and David Weekley. The Parks at Berkeley, a MeadWestvaco development, is set to have the first homes delivered by 2014, he says.

And, still on the drawing books are Long Savannah in West Ashley and the three-county East Edisto development from MeadWestvaco.

He dubs this year’s resurgence of land developers as “the awakening of the sleeping giant.”

Reach Jim Parker at 937-5542 or jparker@postandcourier.com.