2 weeks Ago
The Holy City draws new residents from far and wide every year for many different reasons. There are beaches to enjoy, historic landmarks to visit, great food to eat and beautiful nature to wander in. And that’s just the tip of the proverbial iceberg.
Owning a Charleston home is a goal of many, but depending on where you want to put down roots, the homes may come with a lofty price tag. Fortunately, a significant portion of Charleston’s buyers are looking for luxury properties, making a fast-growing segment in local real estate. "Luxury means different things to different people," explains Alton Brown, broker in charge at Carriage Properties.
"For some, it is a new home; for others, it is a 200-year-old home that is an antique with tall ceilings, plaster walls, uneven floors, old fireplaces, and hand-carved mantles. Or it's something waterfront, on the beach, or a few acres surrounded by trees. Luxury is what you make it.
" In the Charleston area, the luxury market also depends on the area where you choose to buy a home. "Luxury can be found in many neighborhoods depending on location and proximity to things people like to do – the waterfront, beach front, close to culture and the best restaurants etc.," says Charles Sullivan, partner and broker at Carriage Properties.
"For example, $3 million in some areas can be considered luxury, but in others, it's the basic cost of the dirt." Sullivan says that if you are looking at top prices in metro Charleston, neighborhoods like the Historic District, Old Village in Mt. Pleasant, Sullivan's Island, and Isle of Palms are typically mentioned.
"Further out, it's Kiawah, Seabrook and the rural waterfront. Pocket neighborhoods such as The Crescent, Country Club of Charleston, and I’on are all performing very well with new price points so far this year." Rising sticker shock Luxury home prices and statistics can vary throughout the region, so sometimes it’s good to look at each section of the market separately.
When it comes to downtown luxury, for example, Sullivan says, "It's no joke that $1M to $2M in metro Charleston now has become entry-level within a very short period of time. When you track the upper level of the luxury market, at $5M plus, the metro area is doing well compared to last year. Our MLS reported that 12 homes closed so far at $5M or more.
Last year, during the same period, only seven closed." Transactionally, he states that last year's sweet spot was around the $6M range, but so far this year, it seems to be around the $7 to $10M range. "However, our inventory remains low in general, especially if you have stringent criteria as a buyer," adds Brown.
The lack of inventory is a direct correlation to pricing, explains Sullivan. "It's a little early to tell, but pricing is up slightly over last year same period. Homes needing updates or functional changes are taking longer to find a buyer, so I'm seeing a price adjustment in some areas as those sellers reposition for the spring market.
Currently, I do not see any change in demand within our market." "People prefer certainty to make buying decisions, but that is an illusion," says Brown. "Markets fluctuate, the stock market reacts to the news cycle, and real estate reacts more slowly but still fluctuates.
Committed buyers are taking action." In her experience, Hayley Smith, a Realtor at The Exchange Co., LLC, says that it's pretty rare for a luxury home buyer to be a first-time homebuyer.
"It's a bit unusual for them never to have owned a home before, and then all of a sudden buy one that is $2.5 million," she says. "Usually, they've had some sort of home ownership experience and, for example, that first home amasses a good bit of wealth, which is very possible.
Then, they can buy another home. For example, I have one client who I helped buy a home in about 2012 for about $309,000, and today, we can sell that home for $1.3 million.
" Brown states that sales have been busy since January, "if you can find the right property," he says. "People from all over the country have an interest in moving here." To each his own Playing the luxury market is significantly different from the normal real estate market, and there are plenty of nuances and fundamentals in this space.
However, putting the luxury market in perspective can help buyers and sellers navigate more easily. Smith looks at the luxury market through the eyes of the buyer. "A million dollars is a lot of money, but because of where our market has gone since COVID, it's not a lot of money to the amount of transplants we've had from the north and the west coast," explains Smith.
"If you're selling your home in Connecticut for $12 million, the idea of buying a home for $6 million is a bargain. That isn't the same as a person who is in Charleston spending their first million dollars on a home." In addition, Smith explains that the most significant jump in luxury home buyers was during 2021 and 2022 because of the pandemic.
"It was the fastest increase I've ever seen since I started real estate. Now we're dealing with a lack of inventory but still have people who are ready to move down here." Smith also adds that luxury homebuyers look at the real estate market differently.
"They are very strategic and smart on the purchases they make. First, they live in the homes they buy, and when we do a 1031 exchange." That allows the buyer to use part of the proceeds of the sale of the first home to fund the next home they purchase.
"It's about thinking three steps ahead so that all of their money is working for them," explains Smith. "They then have a house they enjoy and passive income." Some buyers also want their luxury homes to be turn-key properties that won’t require a costly remodeling plan on top of a hefty price tag.
"Turnkey properties in some price points are receiving multiple offers or are under contract in days/weeks," said Brown. "Properties with a few quirks that can be improved or need a price adjustment tend to take longer to sell but are still perfectly marketable. For example, an elevator is a luxury for some but a must-have for others.
" Looking ahead, Brown predicts that the turnkey luxury market will remain strong. "It then quiets down over July and August until school starts," says Brown. Buying and selling tips If you're in the market for a luxury home, Brown suggests talking to your Realtor and determining what you really want.
Once you’ve created your list of must-haves, move fast once you find the perfect property. "Especially for turnkey and ready homes, if you can check 80% of your boxes, you better move quickly," advises Sullivan. "On the flip side, if you recognize the potential of a property and you are willing to roll up your sleeves, you may find more sellers open to negotiating this spring season.
" Smith explains that moving fast in today's market with the right agent is vital. "You want to work with an agent who understands how to find stuff that's off-market or knows where the streets are that get water and knows how to write a contract quickly," she says. If you're selling a luxury home in today's market, Smith says to work with a savvy agent who can market it properly.
"That means Instagram reels, advertising, mailers, open houses and more," she says. "You have to have an agent who is going to hustle for you." The good news is that the quality of homes coming onto the market is better than ever before, according to Smith, especially in Charleston’s oldest districts.
"A lot of homes were ones that had been in families for a long time, and they were getting put to market, and they were not in great shape," she said. "Now a lot of those homes have been renovated, and now they're coming to market, and everything is really good. It's like taking a walk through the history of Charleston.
" But remember, luxury is in the eye of the beholder. "If you have moved all over the country or world for a demanding career and lived in major cities with no outdoor space of your own, sitting on a porch overlooking a pond or marsh full of birds or walking the beach or streets of downtown Charleston at sunrise can give you peace," adds Brown. "That can be the ultimate luxury.
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