Amid market slowdown, I'On holds its own

REAL ESTATE

Grace Beahm
The Post and Courier

Lake views and diverse building styles are among the features that continue to draw buyers to I'On. Sales this year to date in the subdivision have fallen off only slightly from the peak two years ago.

Grace Beahm
The Post and Courier

Despite the real estate slowdown, I'On continues to grow. New homes are adding to the number of properties for sale in the nationally recognized 'New Urbanist' development, which began construction a decade ago.

Grace Beahm
The Post and Courier

One of I'On's roughly 680 homes looms behind a 'for sale' sign. About one in every eight of the community's homes is on the market, but some of the sellers plan to move to roomier houses within the neighborhood.

The neighbors didn't fret when Bob and Barbara Fry listed their home for sale this year in the acclaimed I'On community. After all, the Minneapolis natives were just moving around the corner.

Soon after buying a second home here in 2001, the couple decided to spend more of their time in Charleston after Bob Fry, a marketing executive, retired. So earlier this year, a neat black "for sale" sign went up in their yard, and the Frys began preparing to move to a roomier, $1.35 million home nearby in I'On.

Their sign joined dozens of others already posted across this nationally recognized "neotraditional" neighborhood of about 680 homes. About one out of nearly eight residences in I'On is for sale. That's a steeper ratio than on Daniel Island or in the town of Mount Pleasant, where one in 11 homes is on the market.

To anyone who drives through the community to marvel at its creative "New Urbanist" design, all those "for sale" signs prompt an immediate question: What's happening in this picturebook-looking place that's causing so many people to put their homes on the block?

But a closer look at the numbers shows that real estate in I'On has held its ground relatively well amid a messy overall real estate market. Home sales have cooled only slightly there, while the Charleston region as a whole faces declines of 30 percent to 50 percent from the peak of the boom.

Some of the empty I'On homes are newly built. And then there's the Fry family, who by one estimate are one of about 10 sellers who plan to move within the development.

"There aren't any implications to be drawn that people are bailing, or that there is something afoul here," said Bob Fry. "There really isn't."

Attention-getters

Still, the scattering of for-sale signs has caught the attention of outsiders — and of I'On homeowners themselves.

"Every time I take my dog for a walk, I think I see another house for sale," said longtime resident Brooke Niznik, a Chicago native.

The signs are especially noticeable at the intersection of North Shelmore Boulevard and Ponsbury Road, where three of four corner homes are on the market. Looking down the streets of tightly packed but neatly placed homes, five more signs are in plain sight.

"You could probably see that in a lot of places," Niznik said.

Vince Graham, I'On's developer and broker-in-charge of I'On Realty, admits the community is feeling some of the effects of a nationwide real estate slump and a wobbly U.S. economy.

The median sale price for the neighborhoods hasn't dropped, but Graham thinks some sellers are asking too much. He estimates that no more than 40 percent of the homes on the market in I'On are realistically valued, and as a result some motivated sellers are now lopping thousands of dollars off their asking prices.

So far, financial hardships have not had a major impact on I'On, where the least expensive houses start in the $500,000 range, more than double the region's median home price.

Two homes have been sold as "distressed" properties — one a foreclosure, the other related to a personal bankruptcy filing. Two more residences are listed as potential short sales, in which a lender accepts less than what is owed on the mortgage because the home value has dropped below the loan balance.

And at least a dozen single-family houses have been rented out, most likely by sellers or custom builders who never intended to become landlords.

But other statistics show that market conditions in I'On aren't that bad, Graham pointed out. As of last week, 37 homes had sold in the neighborhood in 2008, according to the Charleston Trident Association of Realtors. As sales across Charleston boomed in 2005 and 2006, a total of 39 and 43 residences changed hands during the same year-to-date periods, suggesting sales activity has maintained a relatively steady pace despite the overall market slowdown.

Diverse digs

LeGrand Elebash, an I'On resident who once worked for Graham's development company, credits that consistent track record on the diverse selection of homes in the neighborhood.

"When you're facing a time of elevated inventories, I would always rather be the guy selling the house in a neighborhood like I'On than somewhere less unique," said Elebash, whose home has been on the market for several weeks.

The circumstances behind each home for sale also shed light on the community's stability. Laurie Thornhill of Places Real Estate, which has listings in I'On, estimated that one-fifth of the current listings are for speculatively built homes that are under construction or vacant and ready for occupancy.

Another 10 or so homes are occupied by families who plan to relocate within I'On.

That's what Bruce Kinney, president of the homeowners' association, did after he realized he wanted to spend more time in Charleston than his previous hometown of Chicago. Shortly after moving to South Carolina, he and his wife downsized in Chicago and moved to a more spacious home in I'On.

Moving within a neighborhood might sound like a hassle, but Kinney said it makes sense for a subdivision that wasn't stamped from a cookie-cutter. In I'On, it's not uncommon for a modest townhouse to sit in the shadow of a stately 4,000-square-foot mansion.

"That's something that most developers don't do. They have a sense that people who want to live in big homes only want to live with other big homes," Kinney said.

Still, the array of homes available in I'On has captured the attention of passers-by, real estate industry players and downtown social circles. After all, I'On is one of the few Charleston neighborhoods that consistently has siphoned away downtown loyalists from their South of Broad homes. Some have said they moved for the newer construction, renewed sense of community and streets that are free of slow-moving carriage tours.

"I'On has been so successful for so long that when there's even a hint that things aren't booming as much as they used to be, it just stands in stark contrast when there's a hiccup," Elebash said.

Charleston residents were abuzz about I'On even before the first home was built. As plans for the community made their way through the town of Mount Pleasant's governing boards in 1997, nearby residents loudly opposed them, citing density and traffic concerns.

Though developers eventually reduced the number of homes by about 500 units, construction was delayed by a legal challenge that ended after the S.C. Supreme Court ruled in I'On's favor.

Chatter about the community later turned into tales of riches: Those who bought the first homes saw the value of their properties skyrocket in the following years.

Moving experience

Thornhill, who worked for I'On Realty during its early years, recalls how shocked she was to learn that the agency had priced some of the first homes above $300,000.

"We were just fretting over how we were going to sell them," she said.

Now, some of those houses can sell for as much as $900,000.

Homes sold so quickly in the early years that selling agents never got a chance to "stage" them with plants and furnishings, Thornhill said. Several times, people who had casually stopped in at the sales office ended up signing contracts hours later.

"They doubled, even tripled their money," Thornhill said. "That fueled a lot of people talking about it."

In recent years, as the real estate market in I'On has cooled somewhat, so has the talk.

But Kinney said the talk doesn't bother most residents, especially those with long-term plans to stay in I'On. Cocktail-party conversations in the neighborhood now tend to focus more on topics such as the stock market or presidential campaign rather than real estate sales, he said.

"That's somewhat old news, the fact that homes are taking longer to sell and sitting on the market," he said. "There are buyers. It's just a matter of price right now."

Reach Katy Stech at 937-5549 or kstech@postandcourier.com.