Real estate market continues to shift along with Folly’s makeup
By Bill Davis | Staff Writer
More than the ocean is eroding Folly Beach.
Every year, more and more homes are sold to become vacation rentals on Folly. And every year, the balance of the island tips more and more away from a great place for everyone to live to a great place for anyone to visit.
Great beach, great places to eat, and a great vibe attract more and more visitors to Folly. Some stay for a week; others fall totally in love and stay for a lifetime.
But, concerns continue that the Edge of America could become Cleveland-South, losing a piece of what makes Folly so special.
One longtime resident was grousing recently that she’d heard that 200 homes had sold and become purely rental property.
Of course, that’s anecdotal. But figuring how much the pendulum has swung is hard to do.
City manager Spencer Wetmore tried with no success recently to get someone from the county tax assessor’s office to tell her how many residences went from a 4-percent property tax to a 6-percent levy, signalingif they are owner-occupied or used for rental.
That change would partially identify how many addresses went from private to “for-hire.”
Wetmore said municipal records showed that property owners pulled 115 additional rental registrations, but even that may not cover the entire swing.
“However, we did a large enforcement effort last year and believe that this increase may be largely due to people signing up who have always been renting but had not registered,” said Wetmore.
New neighbors
Charleston real estate agent Doug Holmes, who also teaches statistics at the College of Charleston, tracks the real estate market for the Tri-county area.
Holmes recently compiled a quick comparison of sales on Folly that shows that while the island might have physically shrunk from Hurricane Joaquin, it’s value is going up and up and up.
From New Years Day to the last week of November last year, Holmes found that 58 single-family detached properties sold on Folly in 2014. They ranged in price from $150,000 to $1.6 million – two were under $250,000, while three were more than
$1 million.
Holmes found that the median price for those properties were $524,000, with a per-square-foot cost of $308.
For the exact period of time this year, New Years Day to the last week of November, 712 properties sold, a 22-percent increase. They ranged in price from $235,000 to $1.86 million -— only one was under $250,000 and six, twice last year’s number, were more than $1 million.
He found that the median price for this kind of property increased nearly 9 percent in 2015, compared to the same period last year. But, the square foot cost dropped by a similar percent.
Holmes said there was little to worry about in that drop. “Larger homes means that as the price goes up, the cost per square foot goes down,” he said.
Currently, there are 54 active single-family detached listings, with about eight months of inventory “which represents a sellers market, still,” said Holmes.
According to Holmes, the condo, or single-family attached market, is more balanced on Folly. For the same period of time, he found that slightly less condos are up for sale this year than last, 52 to 56. While median price rose 7.2 percent, square foot cost only increased $5, from $234 to $239.
The Folly condo market has about six and a half active listings, at 32 units, which he said, “represents a balanced market.”
Statistics Don’t Always Tell The Whole Story
Vince Perna, a real estate agent at Dunes Properties on the island, said only a local can truly understand a statistical review like Holmes’, which Perna said doesn’t take into consideration how one big sale can alter the numbers in such a small market.
“We have a pretty unique situation here on Folly, where a 4,000-square-foot home gets foreclosed on and skews all the numbers,” said Perna, adding that some homeowners being content to hold out for years for what seems an unreasonable price can “blow up your inventory stats.”
Perna currently lists four Folly properties on Dunes’ website, ranging from a $1.6 million luxury beachfront home to two adjoining lots on E. Erie Avenue that go for more than $300,000.
And its what those lots represent that are the untold story on Folly, according to Perna. “Existing houses can be so expensive relative to the current cost to build,” that he said Folly has reached a “tipping point.”
Perna said buyers are now faced with the option of buying an existing home for, say, $600,000, or they can buy a lot for $250,000 and build on it for $350,000 and then get the benefits of a new structure.
With interest rates poised to go up at the whim of the Federal Reserve, Perna said now is the time to buy and sell, when monthly mortgages will be lower and owners can get more for the same house.
“And I know a guy who can help,” Perna said with a laugh.
But with every sale and every passing year, will anybody know any of their neighbors on Folly in the near future?
