The Charleston Coast From Our View...
As we hit the mid-year mark, we are starting to notice a reoccurring trend – low inventory and steadily increasing home sales. In addition to this, we are currently seeing a slight rise in days on market (up 8.5% from this time last year), which is most likely due to schools being out for the summer causing buyers to wait to make those large purchase. That being said, markets across the country are starting to level off, meaning more wiggle room for buyers which is always a good sign. As long as the weather works in our favor, we anticipate a healthy real estate market for the Charleston area.
Closed Sales +3.0% | Median Sales Price +4.0% | Months Supply -2.6%
Market Statistics by Area
Tax Credits for Historic Properties
People from all over the world love Charleston and its wonderful architecture. Our leaders years ago, knew that preserving that charm would be important to its future. What might seem to some like draconian rules that must be followed have become the unswerving guiding principles to preserving these beloved historic structures. Consequently, incentives have been put in place to encourage owners to “do it the right way” and truly restore and not just remodel historic buildings.
How does it work?
Taxpayers who rehabilitate their owner-occupied residence may be eligible to subtract 25% of the costs of many expensive repairs and renovations from their state income taxes.
How do I qualify?
Your building must meet both of these criteria:
1. You must own and live in the building or a portion of the building that will be rehabilitated. It can be a house or another type of historic building, such as a school or store, that you are rehabilitating to live in. An historic outbuilding associated with your residence, such as a barn or a garage, can also be eligible for the credit. The credit does not apply to buildings or portions of buildings that are used in a trade or business or produce income.
2. Your building must be one of the following:
• listed individually in the National Register of Historic Places
• contributing to a listed National Register historic district
• determined by the State Historic Preservation Office (SHPO) to be eligible for individual listing in the National Register
• an outbuilding that contributes to the significance of a property listed in the National Register
One might be surprised to learn that tax credits are available all around the Lowcountry and not just downtown Charleston that qualify. Here are a few: Historic District (HD) in Summerville, Hampton Park Terrace, a carriage house downtown, a Freedman’s cottage in North Central, Mt. Pleasant HD, Ashley River HD Atlanticville HD Charleston Navy Yard Officer’s quarters HD, French Quarter HD, Moultrieville HD, Pinopolis HD, Pineville HD, Sullivan’s Island HD, Successionville HD to name a few.
What elements qualify?
Money spent in the following categories may be counted as “Rehabilitation Expenses” when calculating the amount of credit:
• restoration of historic plaster
• energy efficiency measures except insulation in frame walls
• repairs or installation of heating, air conditioning, or ventilating systems
• repairs or installation of electrical or plumbing systems exclusive of new electrical appliances and electrical or plumbing fixtures
• architectural and engineering fees.
Allowable expenses do not include the cost of new construction beyond the footprint or volume of the existing building, the cost of acquiring or marketing the property, the value of an owner’s personal labor, or the cost of personal property.
Are there other requirements?
You must spend more than $15,000 within 36 months on Rehabilitation Expenses that qualify. Remember, this is a government program. There will be forms to complete, timelines, reviews, and copious documentation is required.
What is the most important take away?
Do not start any work until the first form is approved by the state of SC. You must have documentation of every element you intend to claim with before and after photos. You must tract specific expenses scrupulously throughout the process and you must quantify all work. This is not easy and contractors don’t like doing it so you will likely be the project manager for the tax credit work. But remember, it pays well come April 15th.
Spring has SPRUNG and eager buyers are out in full force this season. With beautiful weather and new listings up 4.2%, it’s no wonder competition is fierce for well-priced homes in the Charleston area. Although inventory is still a factor, sellers are poised to make quite a profit in the coming months. With the the national unemployment rate dropping to 3.6% during April 2019 (the lowest level since 1969) we anticipate a positive affect on the real estate market.
Closed Sales -2.6% | Median Sales Price 0.0% | Months Supply 0.0%