High-end houses compete for sales

CHARLESTON -- Despite the big drop in real estate prices, more than one out of 10 homes for sale in the Charleston area today has a price tag of $1 million or more.

That's more than 700 homes with seven-figure asking prices — and a handful of those are listed at more than $10 million.

“There aren't 700 people out there to buy them,” said Daniel Ravenel of Charleston-based Daniel Ravenel Sotheby's International Realty.

His Broad Street firm's listings include the two most expensive residential properties on the market; a $26 million estate on Kiawah Island and a $23 million South of Broad mansion.

“Most of these houses are wonderful. They are loved,” Ravenel said. “There's just a lot of uncertainty out there right now, so they aren't selling.”

Multiple Listing Service data shows that 204 homes sold for $1 million or more last year in the Charleston area, and there were 689 for sale at year's end. The figures do not include most properties on Kiawah, where an additional 127 million-dollar-plus homes were listed privately, not through the public MLS database.

Chris Drury, president of Kiawah Island Real Estate, said the number of properties for sale on Kiawah is at the lowest point in four years, and about 200 sales closed last year.

But there's still plenty of hesitation among potential buyers, he added.

“There's lack of confidence in the government, the financial system and the global economy, and those things weigh heavily on the mind of the discretionary buyer, which is what we have on Kiawah,” Drury said.

Thin air

The area's record-price home sale, the $14 million sale of 181 Ballybunion Drive on Kiawah in the summer of 2010, came only after the huge oceanfront property was on the market for more than five years.

There are five homes for sale today with higher asking prices, but it's anyone's guess when they might sell and for how much.

“Certainly the air gets pretty thin up at that level,” said Rick Vale, broker-in-charge at Daniel Island Real Estate. “Based on sales, there's probably a four-year inventory of homes priced at $1 million-plus.”

That means if no new listings came on the market, it could take four years to sell those currently for sale in that price range.

Generally speaking, the higher the price, the longer it takes.

The inventory of million-dollar-plus homes peaked in the summer of 2008 at 1,186 and has been declining since then, MLS figures show. But at the same time, the number of days on the market has increased every year since the housing bubble burst several years ago, while the percentage of the asking price paid has fallen steadily.

Helen Lyles Geer, broker-in-charge at William Means Real Estate, said the market is pretty strong in the $1 million to $2 million range. But homes $3 million and up are a different story. Price reductions in that category have been common.

In Goose Creek, for example, the 6,728-acre Medway Plantation, home of the state's oldest masonry structure, is listed by Geer's firm for $15 million today versus $25 million in 2010. The 15,000-square-foot, 12-acre Kiawah estate that Daniel Ravenel Sotheby's is listing for $26 million hit the market at $29 million about two years ago.

Price adjustments

Charleston resident John Dunnan is among those hoping to sell a high-end home, the historic Nathaniel Ingraham House on the city's High Battery. The six-bedroom house at East Bay and Water streets went on the market in 2010 and has since been reduced from just under $10 million to under $8.5 million.

“We've had a couple of offers, and we're hoping the right buyer comes along,” said Dunnan, an artist and gallery owner whose family has another home at Yeamans Hall in Hanahan. “Obviously, it takes a particular kind of buyer in that price range.

”We've come down a million and a half,“ he said. ”I simply don't think we'll lower the price any more.“

Less common are the one-of-a-kind properties now listed for millions more than what they sold for last time. The 10,000-square-foot Col. John Ashe House at 32 South Battery, for example, changed hands in 2003 for $6.9 million, and now is offered at $9.875 million.

”It's a one-of-a kind, it's historically important,“ said listing agent Pam Harrington of Pam Harrington Exclusives.

At the other end of the spectrum, properties in the low-seven-figure range are selling well in Mount Pleasant, according to Will Jenkinson, broker in charge at Carolina One New Homes.

”The million-dollar market in Mount Pleasant is at about an eight-month supply,“ he said. ”Once you get up above $2 million, it's a different story.“

Buying time

Brokers say high-end buyers are taking their time, particularly if they are looking for a second home. Tight bank lending standards have thinned their ranks.

”It's just a much more conservative buyer,“ said Harrington, whose agency is based near Kiawah and Seabrook islands. ”They want to feel like they are getting a good buy, and are paying the lowest they could pay for the quality they are getting.“

While historic mansions and oceanside estates typically command the highest prices, most of the seven-figure homes are in the $1 million to $2 million range.

Some carry high prices due to locations at the beach or in downtown Charleston's Historic District. Others are swanky suburban mini-mansions in the 4,000-square-foot-plus range in Mount Pleasant and on Daniel Island.

Every broker interviewed about the high-end market said that if a property is priced right, it will sell quickly, but the price a buyer thinks is right might strike a seller as too low.

”If you don't have to sell, then you shouldn't sell, because the buyer mentality today is that if something is on the market it's because they have to sell,“ said Vale of Daniel Island Real Estate. ”You could have a house listed for $2 million and someone might offer $1.4 (million).“

But buyers are out there, he added.

”We have a house listed for over $5 million, and we've had showings,“ Vale said. ”We had a guy fly in from New York and look.“

While million-dollar homes have become commonplace in the Charleston market, it was only 25 years ago when the first million-dollar home sale was recorded in Charleston.

”I remember when I sold my first million-dollar home, and I was so proud,“ Geer said. ”I remember, it was a big deal.“