Island real estate market is thriving as area population booms
An estimated 34 people are moving to the Charleston area each day, according to numbers released by the U.S. Census Bureau on March 22, 2017— and many of those newcomers will likely take up residence on Daniel Island and in other parts of Berkeley County.
In fact, growth data released by the Berkeley Charleston Dorchester Council of Governments (BCDCOG) estimates that the population in the region will reach over 250,000 residents in 2025 and over 300,000 residents by 2035.
As population estimates have surged upwards, Berkeley County’s housing stock has also increased, according to a draft summary of the BCDCOG’s “Comprehensive Plan 5-Year Review” presented to Berkeley County Council on Aug. 22.
“After adoption of the 2010 Comprehensive Plan, not only did housing construction in the County accelerate as the nation recovered from the Great Recession, but Berkeley County announced that future economic investments totaling more than $1 billion had been committed by new corporate arrivals,” states the BCDCOG summary. “In anticipation of more than 4,100 new jobs by these companies, it is expected that there will be even greater demand for housing and services in the near future.
In 2015, the estimated total number of housing units in Berkeley County was 76,503 and since then has increased, although not proportionally. A majority of the County’s stock was built from 2000 to 2010, the study continues, causing an increase in the total number of housing units of just over 30 percent.
“Since 2010, the number of housing units has increased at a slower rate, with an estimated increase of only 9.1 percent units, much less than half of growth in the previous decade,” the report states, “yielding a total housing stock estimated at 76,503 units in 2015.”
For 2016, building permit data for the county showed that 1373 housing units were approved for construction, only a 1.79 percent increase from the previous year, according to the BCDCOG report.
Daniel Island’s housing market
Although the increasing numbers provided by the BCDCOG are for all of Berkeley County, Vice President of Sales for the Daniel Island Company and Broker in Charge for Daniel Island Real Estate Rick Vale explained that Daniel Island is a bit of an “anomaly.”
While from 2008 to 2012, house prices were down in most other parts of the County, Daniel Island’s prices were up 4.2 percent, according to the study.
“When you look at overall Berkeley County during that period of time, you can see that we caused it to skew, even though we’re small,” said Vale. “All of the others were negatives during that period of time. You can see how Daniel Island tends to carry the ball as far as a lot of the appreciation in Berkeley County from the period of 2008 to 2012.”
Even though real estate on Daniel Island was affected during the recession, the market on the island, although small, has rebounded well, Vale continued.
“Sales from 2012, ’13, ’14, ’15 and on would continue to build,” said Vale. “The average prices have gone up. The desire for people to live here continues. When you look at the inventory, there are approximately 200 single family homes that turn over every year, so it’s not a huge market. If you add condominiums and town homes to that, I think that number is about 150.”
Looking ahead to next year, Vale is optimistic about the status of the market on the island.
“The builders on the island, both production builders as well as custom builders, still have a very optimistic attitude of what’s going to happen in 2018. I do,” said Vale. “I think that 2018 will be the year that will surpass 2019. Prices may be up, but interest rates are low. There’s still a lot of pent up demand. The economy and stock market are doing well. All of the indicators are that we will have a very good 2018.”
Currently, sales on Daniel Island are 13 percent ahead of last year, while the average pricing is up approximately 7 percent, according to Vale. With this, he explained, a majority of those who experienced a decrease in property value during the downturn have gained most of the equity back that they had lost.
As for the housing price increase, the demand to live on Daniel Island is high, Vale continued. With Downtown Charleston, the airport and the beaches 15 minutes away, the island is a desired home for many.
“There’s a number of driving factors when you look at the price increase,” he said. “We’ve created a place where people want to live. People enjoy the lifestyle—the ability to go to Publix, or go get pizza or get whatever you want on the island… A real estate agent a couple years ago said something that I will never forget. He called it the, ‘five minute island.’ I asked what he meant and he said, ‘Well, you can just about get to anything in about five minutes.’ That’s a very attractive thing for a lot of people.”
As more people move to the area, construction of new family homes, apartments and condominiums on the island will continue. At least, until the contractors run out of land, Vale explained.
“Because we’re an island, we built out from the center to the edges and we have the best product. We have Rhoden Island, which will be completed later this year. We have the south end development as well… But, there is only so much acreage and only so much to be built. When we’re built out to the edges of the island, that will be it.”
When asked if Daniel Island will be affected by the expected population growth in the County over the next two decades, Vale replied, “The growth of what’s going to happen in Berkeley County is very much up to the north… It will not have any kind of negative effect on Daniel Island at all. In fact, it should continue to have a positive effect…By 2035 there will be no more new construction built on the island. All of the product that we have as a development company will have been sold, so it will become a resale market. I think you will continue to see homes turn and people will be selling. Now, will they reach the levels of what they reach now of 200 homes a year? Yeah, likely. The maturity, historically will bring a stabilization in pricing. If people want to live here, the market itself is going to dictate the value.”
To view the BCDCOG draft summary, visit, http://berkeleycountysc.iqm2.com/citizens/fileopen.aspx?Type=1&ID=2621&I... (see pages 14 to 27 for specific growth information).