The Future of Ultra-Luxury Real Estate in Isle of Palms

Located just 12 miles away from downtown Charleston, South Carolina, Isle of Palms is known for its beautiful beaches, unbeatable sunrises over the Atlantic, and a variety of beachfront restaurants and bars. It’s also a haven for those who want to live the luxury lifestyle in ultra high-end homes either on or near the water.

Though ultra-luxury real estate has different meanings depending on the location, it’s usually defined as homes over $3 million that have high-end amenities, exclusive locations, and plenty of square footage. These homes have features such as elevators, saltwater pools, boat docks and lifts on the water, and elevated ground-floor garages.

Are you interested in buying or selling a home in this exclusive area? While working with an experienced local agent like Jameson Cokas is key when it comes to achieving buying or selling success, it also helps to have knowledge about the Isle of Palms ultra-luxury real estate market before you make a move.

As one of the fastest-growing states in the country, South Carolina has been attracting new residents due to its healthy economy, affordable cost of living, and natural beauty. The top markets in the state include Columbia, Myrtle Beach, Greenville, and Isle of Palms’ close neighbor Charleston. Though Charleston has plenty of multi-million dollar homes on the market, many of those seeking ultra-luxury look to nearby Isle of Palms when they want to relocate. This has led to a robust market in the small city of just under 4,500. Homes in Isle of Palms are selling after only 56 days on the market, down from 120 days last year. There were also 94 homes sold in September of 2023, up from 87 that sold in September of 2022. The median list price of homes in Isle of Palm is also increasing: from $1.8 million in 2022 to over $2 million as of September of 2023.

When looking at the present and future of the ultra-luxury real estate market, several factors need to be taken into consideration. The first is rising interest rates. As of mid-October 2023, interest rates on a 30-year fixed-rate mortgage are 7.57% compared to 6.66% at this time last year. Most experts agree that rates are unlikely to fall below 6% until at least 2025, though they are anticipated to decrease in the next year. The rising rates are causing some luxury home buyers who need to secure a mortgage for their purchase to hold off, though it clearly has not made a large impact on the robust market as of yet. One impact this may have on the ultra-luxury market is the continued trend of all-cash sales.

Another influential factor when it comes to ultra-luxury homes is that volatile job markets tend to have less of an impact on wealthy Americans. Those in higher income brackets are often able to work from home, are in stable fields, or are the owners of large businesses and feel confident about making a luxury home purchase without the fear of job loss or reduced income.

Finally, the rise in working from home, either part-time or full-time, has fueled the growth of second home ownership. It’s believed the demand for luxury homes to increase due to the fact that buyers no longer have to worry about getting days off work to spend at second homes.

The face of ultra-luxury homes is constantly changing, influenced by economic and lifestyle factors. While the pandemic led to many people buying larger luxury homes where they could live, work, and play, that trend is fading and more are embracing smaller homes again. The rising prices of homes could also be leading to the downsizing trend.

International transactions are also on the rise and will continue to shape the market. Not only are buyers from out of the country looking at U.S. purchases, but 92% of American buyers in a recent survey stated they were considering buying a home overseas. This is likely due to strong U.S. currency and the continued competitive U.S. market. American buyers are primarily interested in homes in Mexico, Central America, Canada, and parts of Asia.

Buyers in the current ultra-luxury market should be prepared for continued rising prices and higher mortgage rates. Due to these trends, many buyers may want to make arrangements to pay cash for a luxury home. A cash offer may also allow them to offer at or slightly below the asking price, as these deals have less red tape and generally move along more quickly than offers that are dependent on a mortgage.

Sellers are more likely to put their ultra-luxury homes on the market and downsize to smaller properties as they and their families return to work or look at making the move to owning property overseas. This may lead to more high-end homes being listed in the coming year. These sellers may also opt to buy their next home with the cash they receive from the sale of their home rather than take out a new mortgage with higher interest rates.

Though no one can predict the future, relying on past and current trends as well as economic and lifestyle conditions can help us make smart choices for the future. If you are ready to buy or sell in the Isle of Palm ultra-luxury real estate market, reach out to experienced local agent Jameson Cokas. He can answer all your questions and help you through the entire buying or selling process.