The Law of Supply and Demand in Bulls Bay
One trend that continues is the increasing number of sales and the decreas-ing inventory of property for sale. We’re starting to see new listings put on the market at fair market value receiving multiple offers in the first few days where in the past they were not. You can see in the chart on the left that the number of sales of homes and land in McClellanville and Awendaw has been steadily increasing. Sales doubled in the area from 2010 through 2013 and then almost doubled again the following year. Since 2014, we’ve held fairly constant at these sales levels.
From an inventory perspective, there is a direct correlation between these increased number of sales. The chart on the right shows
how the number of homes and land for sale in the area remained fairly consistent from 2010 through 2014, meaning that for every property sold
another person would list theirs for sale. But in 2014 we can see that both the number of homes and land has been decreasing. This
decreasing inventory creates a greater feeling of scarcity and without scarcity, you can not see price increases.
It takes a little time for that scarcity to sink in and reach across the pool of buyers. Some buyers have to lose out on a couple of opportunities in which they either underbid a property and lose to a better offer or drag their feet making an offer only to find that someone else has already scooped up their dream property. It doesn’t take long to feel that burn of regret until you are ready to pounce when new listings hit the market and that is the point that we have finally reached. If you’ve been sitting on the fence to buy, get more
involved and let us know what you’re looking for so we can keep an eye out for you in this quick moving market. If you’re looking to sell, let us properly market your property and negotiate offers so that you can ensure you get top-dollar!
With every builder that I know in McClellanville committed to projects for the next 6 to 12 months, it’s safe to say that we are in the midst of a building boom the likes of which we haven’t seen since 2005-2006. Nearly every neighborhood has a house being built and a lot being cleared for another to start. It’s a lagging effect that I predicted from the land sales boom that we saw in 2016 and 2017. There is a shortage of turn-key homes on the market that buyers, such as those from Mount Pleasant (read more on op- posite page), are in search of. The spec home we have listed at 325 Mercantile is nearing completion and its sale will undoubtedly lead a few more investor/builders to start spec home projects of their own. We have seen that this building boom has started to increase the price per square foot of construction, due in part to both an increase in material costs as well as the higher demand of skilled workers and builders having enough jobs that they are no longer having to bid jobs as competitively.
I have previously mentioned the extremely high demand for long-term rentals and predicted investors even coming into the area to build rentals. I personally acquired a piece of land last month for future rental investments and have worked with numerous other buyers who have bought or are buying fixer-uppers or land to build rentals. A lot of these investors are pulling their money out of the stock market with fears that it can only rally for so long. With people ready to rent or buy, you really can’t go wrong investing right now. Keep in mind that “building” doesn’t just have to mean on-site stick-built construction. New or used mobile homes can create great rental or sales opportunities when placed in a desirable area. Modular homes can also be a way to reduce building time and costs and end up with the same product. These homes are sometimes confused with mobile homes, but are constructed much the same as a traditional custom-built home but are simply built in a factory located in areas where the labor and cost of living is lower and are then trucked here to be set and finished.
The Draw of Rural Life
For the past few years, Mount Pleasant residents have been the overwhelmingly largest demographic of buyers in McClellanville and Awendaw. This demograph- ic was less than 5% when I started in real estate more than a decade ago, but has risen to roughly 50% in recent years and doesn’t show any signs of lessening. Rarely does a week go by that someone living in Mount Pleasant doesn’t walk into our office and begin to tell us about how they want to move to get away from the traffic congestion, overcrowding, and rampant development. It doesn’t seem to matter whether they moved there 5 years ago or 50, for many it seems to have reached a tipping point where the conveniences of city living and proximity to work have become outweighed by these constant annoyances. Not only are people wanting to escape the growth of the area, but they also want to start a new chapter in their life. They are coming from yards that are just a fraction of an acre or no yard at all in the case of apartment and townhome dwellers and they want to spread out and have a little room to breath. They often talk about finally getting a dog, growing a garden and even hav- ing chickens, horses, or livestock. There is a whimsical romance of country life that makes people feel more free, more alive. Sometimes it’s the simplest thing that are taken for granted my whole life, like the ability to park a boat in your own yard. I’ve also heard nightmares of one crazy person on a homeowners association board with nothing better to do than going around looking for ways to pester people and wreak havoc on their daily lives.
I joke about the time that I was working with a client that came to me adamantly stating that he wanted at least a 5-acre lot for his new home. As we were on our way to the first listing, we passed a nice cleared lot with a for sale sign on it. “What about that one?” he asked. I was puzzled, knowing that the lot was only an acre in size. Before I could answer he said, “Let’s go look at that one”. We walked around the property for a moment and he exclaimed, “This is more than enough space!” “OK”, I said, “Well this lot is an acre, so maybe we should expand our search parameters going forward”. He knew how big his small fenced lot in the city was and he just couldn’t imagine that if you put five of them together it would amount to much space at all, but he had never really seen one cleared acre! He also overestimated the amount of buffer you need between yourself and your neighbors to enjoy a little privacy. Just 20 or 30 feet of woods can really block out your neighbors and change the entire way you feel about the solitude enjoyed from your personal space.