Sunday, Jul. 12, 2009

Columbia-area real estate | Two developers defy down market

A pair of high-end subdivisions are being built despite the worst recession in 80 years

A couple of developers in Lexington County are taking a chance that the real estate market will brighten soon.

They are moving forward with plans to build neighborhoods of $250,000 to $500,000 homes — despite higher-priced homes being the hardest hit in the worst recession in more than 80 years.

Industry experts say the new neighborhoods could signal a turnaround is near for the down real estate market.

“Most people seem to anticipate a better economy toward the end of this year, beginning of next year,” said Earl McLeod, chief executive of the Home Builders Association of Greater Columbia. “To be ready for that, you’d have to get started now.”

Columbia-area home sales overall are down 27 percent for the year. Most of the sales have been homes priced around $150,000 and under to first-time buyers eager to take advantage of a new $8,000 tax credit and historically low interest rates, industry experts have said.

McLeod said the higher-than-usual inventory on the market is dwindling. Many builders have stopped or severely slowed construction in the past two years as banks tightened lending standards to build and buy homes.

New home-building permits are down 38 percent through the first six months of the year, compared to the same time period last year. Permits are down 61 percent in the first half of the year from the peak of building in 2006, according to industry data.

A home-building bust in once-hot areas, including Northeast Richland, has led some builders to get out of the business and others to switch to remodeling to weather the downturn.

But developers of Saluda River Club and Paradise Cove think their neighborhoods are attractive enough that they will get buyers to open their shrinking wallets. They are throwing in resort-like amenities and homes that are decked out with the finest materials.

They reason their projects are just unique enough to bring interest from those who are still willing — and able — to buy higher-priced homes.

After a dull winter, home sales took off in mid-February in Saluda River Club and haven’t let up, said developer Andy White. They have sold 18 vacant homes — called specs — this year with seven more under construction. Six custom homes also are going up. Most of the homes have sold for more than $400,000, White said, chiefly to people buying their first move-up homes. And some custom homes are being built for more than $1 million.

“We’re not going to be able to get the specs up fast enough to meet the demand,” he said.

White, who got financing for the neighborhood in place just before the bust, has loaded it up with amenities, such as hiking, kayaking with a river guide and a community center with a lounge and concierge, to draw people in.

Its location on Corley Mill Road, about a mile from U.S. 378 near its intersection with I-20, and a 15-minute drive from downtown Columbia, also has attracted buyers, he said.

Marty Eckster, a developer of Paradise Cove on Lake Murray, is trying to draw in buyers by being realistic about pricing on the concrete, Mediterranean-style homes he is building on Lake Murray.

Homes there are priced at $299,000 and up — and are going for about $100,000 less than what they would have three years ago, Eckster said.

The neighborhood — backed by European developers — was put on hold for three years as developers wrangled with state officials over dock permits. If they had built in 2006 when the market was red-hot, they likely would have sold out quickly at much higher prices, said sales agent Todd Beckstrom, with ERA Wilder Realty.

Two spec homes are under construction for $358,000 and $685,000. For each home that sells, developers will build two more.

Eckster said the neighborhood also will be unique to the market.

All of the homes will be made with concrete slabs that are sealed and bolted together, with every crevice sealed tight to keep electric bills low. The homes will come with upscale appliances and granite stair railings and window sills.

Kit Oswald, an agent with Coldwell Banker United, Realtors who specializes in the lake area, said it is unusual to have a neighborhood on the lake where you can keep a boat in the water with homes priced at $300,000.

She said it will be interesting to see how sales go at Paradise Cove in the coming months.

“They’re seeing some light at the end of the tunnel, and if they don’t have inventory on the ground they’ll be left out in the cold,” she said.

Reach Rupon at (803) 771-8308.

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