A handful of years ago, before the housing fall became the housing crash, only the fairly well-off could afford a home on Charleston, S.C.’s Johns Island.
A quarter of an hour or less across the Intracoastal Waterway from historic Charleston’s downtown, and minutes to the beaches of Kiawah, the barrier island has both location and Southern charm dripping from the wide-spreading branches of its historic oak trees.
“It’s in an area where nobody would have built anything even remotely affordable, and everybody had big ideas about what their land was worth,” says Steven W. Mungo, principal of The Mungo Cos., an Irmo, S.C.–based builder.
Then home sales in the area nearly stopped, and Mungo’s leaders, smelling potential bargains in a good location, went shopping for some distressed assets on the island, says Lee McLoud, the company’s division president for Charleston, Myrtle Beach, and Savannah, Ga.
Mungo targeted a development called The Cottages of Johns Island where the developer was left with a stalled subdivision after other builders had backed out of lot-buying deals.
“We chased it,” says McLoud. “We found it and probed and prodded and probed and prodded and finally, through a personal connection, got to the developer.”
Mungo bought the 64 remaining lots in the community and started selling skinny, deep, tall homes there in August 2010. By the end of October 2011 it had sold 54 houses, a pace of 3.6 a month in a market where most builders have been happy selling two a month, says McLoud, adding that the community was likely to be sold out by the end of 2011.
The company was thrilled, he adds, “to get that kind of sales pace in a niche situation like that, where we were able to provide a product and a price point that hasn’t been seen in that submarket in a while.”
Because Mungo was able to buy the lots for less, homes in The Cottages start at $150,000 and were closing at about $186,000 on average after upgrades. Before the market meltdown, builders were hoping to get roughly $225,000 for each home there.
The new price point made the units affordable for the many buyers who hadn’t had an option for new construction within a quick commute to Charleston’s downtown. The only other desirable new-home options are out in the Summerville suburbs, a 30-plus minute commute, says Mungo. “We got all these people who wanted to live near downtown but couldn’t afford it,” he says.
But the houses offer more than location and price point. The designs are a functional, appealing take on the cottage. Their narrow, deep footprints are pure Charleston, where historic homes were often narrow for several reasons, including the fact that property taxes were based on the width of lots.
Mungo had already been selling the plans at The Ponds, a master planned community in the Charleston suburb of Summerville. The designs started life as attached townhomes in its Raleigh, N.C., market. When the company moved the designs to South Carolina, it gave the façades a Charleston Low Country look and detached them.
The six floor plans stretch from 1,368 to 2,135 square feet with base prices from $159,900 to $195,900. However, most buyers are opting to finish out the third-floor attic space on several of the models into a bonus room, a sizable upgrade, helping to boost the sale prices.
Three of the models feature detached, single-car garages in the back reached via old-fashioned dual concrete strip driveways. Three others, on lots that aren’t wide enough to allow a driveway, have the garage built into the front of the homes.
The Cottages helped Mungo attain the rank of fourth largest builder in the Charleston market, behind three national builders. “When we can duke it out with the nationals with all the capital they’ve got, we are doing well,” says Mungo.