Lowcountry Luxury: Home Market Remains Robust
May 09, 2018 06:32AM
By Makayla Gay
By Brian Sherman
Photography by Somerset Photography
The luxury home market in the Charleston area is strong, vibrant, and riding the combination of an energetic economy and excellent weather, relatively modest housing prices, and low property taxes that lure people who have money to spend to the Lowcountry.
“I would certainly describe the market as exceptionally busy,” said Christopher Ibsen, president and owner of Dolphin Architects and Builders.
His company builds homes in the $750,000 to $3 million price range on Kiawah and Seabrook Islands and in downtown Charleston and Mount Pleasant. He attributed the strength of the market to a strong economy and the large number of people who are moving to the Charleston area. On the other hand, he added that many of his clients aren’t quite ready to escape the winter weather in the Northeast and elsewhere. Instead, they are planning for the future.
“A significant number of the homes we build are second or vacation homes,” said Ibsen. “They’re building a house as a family getaway home now, and, in 15 or 20 years, that’s where they’re going to live full-time.”
Ryan Buck, co-owner of R.M. Buck Builders, agreed that their slice of the market is booming, not only where the company builds homes ranging from $2 million to $15 million on Kiawah, Seabrook, Johns, and Wadmalaw Islands, but throughout the Charleston area. He said many people build their retirement or second homes when the economy is doing well, but he added that many take advantage of a down market, when prices are typically lower.
Buck pointed out that when the luxury home market is thriving, subcontractors tend to charge more for their work.
“When the subs are very busy, trade labor gets expensive. They all have tons of work. If there’s not a lot of work going on, they’re hungrier and they’re willing to negotiate more,” he said.
Ibsen noted that a recession, as in 2008, takes longer to affect the luxury home market than the market in general, in part because the design and construction timeline. He said it generally takes at least a year and a half to complete one job – six months to design the home and another year to build it.
“That can be longer, depending on the size and complexity of the house, as well as the speed of the homeowner’s decision-making. It just takes longer to deliver a high-quality product,” he said, adding that his company is usually working on 10 to 12 projects at a time, three quarters of them new homes and the rest major remodels.
R.M. Buck builds only two or three houses at one time, usually taking 16 to 18 months to complete a project. Buck said it would be eight to 10 months before he starts building another home.
“Right now, we’re booked up for the next year plus,” he said. “We’re even talking to folks beyond that.”
People who move to the Lowcountry from places such as Los Angeles, Seattle, New York, and New Jersey, where homes cost much more than they do in the Charleston area, are prime customers for real estate agents who specialize in luxury homes.
“When they come here, they can afford pretty much our best,” said Bambi Magraw, who is with Pam Harrington Exclusives on Johns Island and is also a member of the Charleston Luxury Group, an organization of independent professionals who work together to market and sell luxury homes.
She said that outside of Kiawah, which is not included in the Charleston MLS, Mount Pleasant is leading the pack in new construction of homes valued at more than $750,000, most of them on the town’s north side in Carolina Park, Dunes West, and Oyster Point. On the south side, 30 luxury homes were sold last year in The Oaks Marsh View.
According to Drew Grossklaus, sales director and East Cooper broker-in-charge for William Means Real Estate, the luxury market is strong but inventory is low.
“It’s hard to find a good product. We have buyers, but we can’t find the perfect home for them,” he said. “Demand is high, and we hope to see an increase in inventory over the next few months.”
All four real estate professionals think the luxury home market will remain strong in the coming year, though they disagreed somewhat about the most important factors that might affect the industry’s immediate future. Grossklaus cited inventory and political factors such as trade deals that might influence the economy, while Magraw remained “cautiously optimistic” but pointed out that every one percent rise in the mortgage interest rate steals 10 percent of a potential homeowner’s buying power. The builders, Buck and Ibsen, were more concerned with the stock market.
“Our client base is typically invested in the markets,” Ibsen said. “When the Dow is up, people are feeling confident. When it’s down, they take a more conservative approach.”