Carolina Coastal Review

Beach Renourishment Up For A Vote

Wild Dunes property owners will decide on special fee

By Jessica Johnson

The Post and Courier

Tuesday, January 29, 2008

ISLE OF PALMS — Wild Dunes property owners will receive a ballot this week asking if the homeowners association should impose a special assessment to pay a portion of an offshore dredging project to renourish their eroding beach.

Wild Dunes Community Association members met in the Sweetgrass Pavilion Saturday for an overview of the proposal that asks for $1,500 for every dwelling unit and for owners of beachfront property to pay an additional voluntary amount.

Sixty percent of property owners would have to participate in the referendum for it to be considered valid. And 66.67 percent of those voting would have to approve of the assessment for it to go into effect.

Payments would be due in April so that the city could move forward with contracting with an offshore dredging company. Pumping sand could be done in June and July.

The eroding beach has affected the Wild Dunes Resort, said community association board member Gary Lauderdale.

"The reality is, we're all in this together, and when the resort is financially healthy, we're financially healthy," Lauderdale said to property owners. "When they get sick financially, we get sick financially."

If the referendum issue is approved, property owners and the Wild Dunes Resort would pay $5.8 million of the expected $9.7 million renourishment project.

The Wild Dunes Community Association board of directors expects public funds to support the remaining cost. Isle of Palms City Council already has approved spending approximately $2 million. An additional $900,000 has been requested from Charleston County and $1 million from the state.

"Those numbers are not firm, to say the least," Lauderdale said.

The city requested the funds.

Mayor Mike Sottile said the city has applied for a $1 million grant from a S.C. Office of Ocean and Coastal Resource Management fund and will ask the county for $900,000. Charleston County has discussed setting up a county beach renourishment fund that all beach communities in the county could draw from.

Current state law requires public beach access before entities can tap into the OCRM beach management fund. And the county has yet to approve its proposed renourishment fund.

Sottile said the city is waiting for answers before deciding what to do next.

"Right now, we've asked for a certain amount of funds," he said, "and we have to wait and see if they give it to us."

Reach Jessica Johnson at 937-5921 or jjohnson@post andcourier.com.

Public Hearing on Wild Dunes Beach Nourishment Project

The S.C. Department of Health and Environmental Control's Office of Ocean and Coastal Resource Management has scheduled a public hearing for 6 tonight at the Isle of Palms Exchange Club.  On the agenda is Wild Dunes Property owners proposed plan to harvest 180,000 cubic yards of sand from the Cedar Creek spit, also known as the Morgan Creek spit, and truck it along the shore to the affected beach.   Some Wild Dunes residents are concerned about the project, and thus the public meeting for discussion before any permits are issued.

Read the full Post & Courier article

Health of Wild Dunes Beach

I recently received the Wild Dunes Community Association’s 4^th quarter newsletter. Lots of good information, but the article on the Long Term Health of the Beach caught my eye.

The association last month voted to begin to collect and disseminate information about beach management options and hinted that it may need to collect money, via a special assessment, from property owners. In a letter to the Board of Directors last week, I urged them to take a proactive role in the current erosion situation, which is currently being spearheaded by a group of condo associations who have banned together.  In that email I also questioned the need for any assessments due to the significant sums of money that have been collected through the Wild Dunes Transfer Fee that deposits one-half percent of any real estate transaction into a reserve fund.

The article asked owners to please email thoughts or questions to thebeach@wilddunesowners.org. If you are a current property at Wild Dunes, please let your directors know your opinion.

Moving toward a 'Normal Market'

The real estate market has slowed at Wild Dunes. Is the slow market a bad thing? It may be for some of the folks currently looking to sell their property, but a change of course was needed.

The market was 'on fire' the past couple of years. Around May of this year, buyers threw water the fire and reduced it to just smoldering.

This chart tells the story. It reflects average selling prices of one-bedroom condo's at Wild Dunes, but is typical for most of the areas properties.  We had a fairly healthy increase in real estate values over the years.  Property was appreciating in the neighborhood of 15% per year, providing an excellent return.

That all changed as we neared the end of 2004.  Investors started gobbling up real estate and supplies became very low.  With little inventory to choose from, prices began to rise sharply.  In the past two years, we've seen price increases in the 30-38% range providing a fantastic return for those who bought into the market.  Appreciation at that level could not be sustained.

Fast forward to today - I would characterize our current situation as "returning to a more 'normal' market" and would expect to once again see appreciation in the 15% per year range.  The challenge for many (not all) sellers, is that they remain priced out front of the market, asking too much for their property in light of this correction.  As prices come back in line with where they should be, we will see buyers once again move into the market. 

Have any questions or comments?  We welcome you to post them to this site or if I can assist in any way, please don't hesitate to contact me.

Is the Tide Turning?

Better economic news came on November 27 from the National Association of Realtors, which reported that existing home sales unexpectedly rose by 0.5% to a seasonally adjusted rate of 6.24 million units in October, the first increase since February.

Rates on 30-year mortgages dipped to their lowest level since January, Freddie Mac reported November 30. Economists attributed the third straight weekly decline in rates to easing inflation pressures as the economy slows.

A Look Back Over The Past Ten Years

It's been a profitable ten years for those invested in real estate on the islands.  I thought you would be interest to see a few examples of what properties were selling for ten years ago versus today (numbers reflect median selling price).

In 1996:

• Port O Call villas were selling at a price of $166,000 - today they are $680,000
• If you purchased a cottage at Sandpiper, Sandcrab or Twin Oaks, you paid just under $165,000. Those same properties sold just over $700,000 in recent times.
• A 3-bedroom unit at Mariners Walk would set you back almost $292,000 and today the last sales were $990,000.
• At Ocean Club, a 3rd floor condo in the number one building had a price tag of $425,000. The last sale on that floor closed at $1.865M

This graph to the left reflects the average prices across all properties at Wild Dunes since 1995. (Click on the graph for a larger view).

Over the years, I have heard a number of comments from people who have told me that "it just can't go any higher". I remember thinking that myself (briefly) as Port O Call's were approaching the half million dollar mark and then quickly went well beyond that number. While the market is taking a pause for the moment, I expect we will see prices continue to climb. We will need to see a few price adjustments to listings that are priced beyond the market and properties will begin to move once buyers become comfortable again.  It's unlikely the pace will see the price jumps like we saw over the last couple of years. I think more reasonable increase in value is anticipated - it's it back to the neighborhood of 15% a year, that's a fantastic growth number for a leveraged purchase.  It's a simple truth that the Lord isn't gracing us with any more beach property, but the number of people continues to grow.  It is a simple calculation of supply and demand.   

It's also true that most everything has gone up in price over the last decade. You may be interested to know just how much the dollar that was used to buy the real estate in 1996 is now worth.  According to the CPI inflation calculator, it would now take $1.29 to buy what $1.00 did ten years ago.  If you were fortunate to store your dollars in real estate, I think you more than covered the 29 cent spread.  May your investments continue to rise!

Sands of Time

Beach erosion was the major topic at the Port O Call annual meeting of home owners this past weekend.  Property owners received an update from their condo association about the challenges of trying to keep up with Mother Natures effort to shift sand from the north end of the island further south.

The plight has been a major challenge and has resulted in ton's of sand being hauled in and the placement of thousands of 5-gallon sand bags in an effort to hold back the water from impacting a number of homes and condo buildings along the beach.  The finishing hole at the Links Course has also seen the buffer between the fairway and the ocean disappear out to sea. Storms during lunar tides have especially been bad news for the area.

IOP North Beach Owners, LLC has been formed with representatives of a number of Wild Dunes Condo Associations on board. This group is working with government officials to determine the short term fixes and long term solutions for the problem.  It is hoped that approval will be granted for the use of 50-gallon sand bags to shore up the shoreline.

It's a concern for every resident of Isle of Palms as our beaches are our most treasured asset. This topic will be alive for sometime to come and we'll share more information as we get it.