Real Estate Blog Asheville, NC

Hi everybody, it is been a couple of weeks since my last entry.  I haven’t written anything because I was waiting to see where all this economic turmoil is going.  The really short answer is nobody knows.  However, to expand upon that just a little bit I will share with you a conversation I had was some clients just the other day.

I was on a listing appointment with a residential client and they ask me my honest opinion of where things stood.  This wasn’t my verbatim response that it went something like this:

Currently our real estate market is suffering however since we are in Asheville, NC real estate market we’re not as bad off as say South Florida.  Primarily what we’re going to see in the market at least through the second quarter of next year are the bloodsuckers; defined as people with the ability to purchase at extremely discounted prices.  Somewhere moving into the third to fourth quarter of next year we should see a slight turnaround in the Asheville real estate market.  So, at the time we listed the property for one month during the fall, for leaf season, and then we will remove it for the winter.  We will then place it back on the market somewhere late spring to early summer of 2009.

However, after seeing what has happened over the past 72 hours and some of the conversations I have had makes me wonder if our turn around and slow painful recovery is not further out.  While our market in Asheville is surviving it is still starting to show some battle scars.  I honestly feel that this recent bailout OK OK not a bailout but a gov’t loan program will be hardly felt by main street.  The main benefactors of this move of course is wall street.  While the fed buying up all of these crappie assets provides money for the banks to start loaning money to each other it does nothing to make it available to the average Joe.  Let’s face it if you do not have a FICO score a ball of 700 and a job history that is long and illustrious YOU DO NOT STAND A CHANCE of getting a loan!!!!  So, while the overall economy may keep moving the future health and prospects for real estate in Asheville are going to be tight at least for the next year to year and a half.

However, the one bright spot in the real estate in Asheville is the green industry.  While conventional stick built construction and sales of preexisting homes seems to be slowing somewhat it appears as though healthy built/LEED certified homes are selling well.  So, the economic turn down is going to have some affect on the green industry, but I feel it will outperform the traditional real estate and construction industries by a long shot.

Brian

I wanted to post a real quick note to let those of you who haven’t refinanced or are home shopping to GET IN THE GAME!!!  I have attached a  little email message I got from a lender today.

The bond market has moved below the 200 day moving average for only the 3^rd time in the past 3 years! When the bond market suffers, so do interest rates and you begin to see them climb. We have already seen this since late last week!

Reports are saying we are beginning a shift in the market towards higher interest rates!

That being said, If you have been thinking about a refinance or purchase but haven’t locked in yet, NOW IS THE TIME before rates get any worse.

Call or e-mail me ASAP for current pricing!

Thanks!

Joseph Wahl

Mortgage Specialist

The little ticker on the right hand page of my website www.carolina-mountain.com jumped .12% on the 30yr fixed in just 36hrs.  We all knew this was going to happen, just not so soon.

Brian

Sorry it has been so rocky getting me to post, but believe it or not I have been busy.  YEAH!!!!!!  But, seriously, I have been working on the mother ship www.carolina-mountain.com to hopefully make it more useful for my clients, both current and future.  I hope to have the members section open soon, but it has been a real bear.  I have been teaching myself HTML as I move along so please stand-by.  Also anybody out there good at SEO?  Please let me know…..

There has been an absolute ton of developments in the real estate markets around Asheville and I promise to set down in the next couple of days and elaborate.  Anyway talk to ya soon.

Brian

Well it has been a while since my last post so I thought I would take just a second for a couple of updates:

1) Well the Super Wal-Mart and Lowes in Weaverville is finally back underway.  After some wrangling with local utilities companies it appears as though the developer of this project has finally gotten back underway putting to rest the rumor mill that had reported the developer as being bankrupt.  It appears that the rumor was nothing more than ill informed locals.  I personally look forward to having the shopping amenities in the area north of Asheville.

2) It appears as though we are finally starting to see some drop in the 30yr fixed mortgage rates.  After months of steady increases we are finally starting to see rates right at 6% or just a little under.  While is not having an effect on home sales, the new rates are at least helping many refinance their homes into locked interest rates.

3) Fannie Mae and Freddy Mac have finally been given a need shot in the arm from the fed, fannie-rates-reduction.pdf, and have also lowered their rates and amount of down payment needed in an effort to prop up the ailing Real Estate markets across the country.

4) And miracles of miracles,  Mars Hill has voted in alcohol sales.  For the first time ever we can go to the local store and buy either beer or wine!!!  It will be interesting to see what effect this has on the area, but everyone I have talked to seems very excited about the prospects.

5)Also in Mars Hill news, Ingles is slated to open the doors on its new grocery store in about 10 to 11 months.  This another huge boost for locals who have been suffering with a woefully inadequate store for many years.  Thanks Bob…..

Just a couple of thoughts as sit and watch the SNOW coming down here in Madison Co. 

Brian

   I am not sure how many of you saw the article in the Citizen-Times on Sunday, but it is alot of the same in most aspects.  The link for the article is here, Real Estate Market in Asheville 01/27/2008.  However, there was a little glimmer of hope at the end of the article.  I had been saying all weekend that while the market was down and still declining, that I felt that there were alot of buyers out there circling.  I believe there is a lot of money targeting the Asheville area starting this year and continuing for quite sometime.  As the article mentions the “Baby Boomers” have some savings and might be waiting it out to see if they can time the bottom of the market and get the best deal.

As for the developers, I feel that a good portion of the serious “full-time” land developers will be back in the hunt this year and ready to get something going for the end of 08 into 2009.  However, these developers have got to do better than one acre subdivisions with no since of community.  ITS DONE, ITS BEEN DONE, lets move on to something more inventive, more imaginative. 

Anyway, folks if you are thinking of refinancing wait til Feb.  If you are thinking of selling a home wait til spring.  If you are a buyer, I think I would start looking now and be ready for the bottom of the market somewhere late winter early spring.

Hopefully I am not completely wrong, but I agree with the Citizen-Times article, that there is a whole lot of pent-up of desire for Asheville and it is going to bust.

Brian

With all of the national news surrounding home prices plummeting, and home sales falling, i read this article in the Citizen Times.  Here is the gist of it.. 

ASHEVILLE – Area single-family homes are still increasing in value, a federal government report released today says, even though the number of homes sold has declined dramatically.

Single-family homes in the Asheville metropolitan statistical area – Buncombe, Haywood, Henderson and Madison counties – increased 9.4 percent in value over the 12 months ended Sept. 30, according to figures from the Office of Federal Housing Enterprise Oversight.

That was the ninth-highest appreciation rate among metropolitan areas across the country. The national average was a 1.8 percent increase, the lowest since 1995. (end) 

So, what now?  sales are slowing.  Time on the market is increasing, but prices are still rising and a great pace.  For those of you used to 12-18% increases per year, close to 10% is still great, if not a little too high.  So what does this all mean?  Normally, when sales slow ie time on the market increases, prices begin to decrease or fall so that the homes will sell.  this is the natural supply/demand curve.  By saying this, i do not mean that prices will decrease to a negative rate (ie -2%), but one would think that prices would not rise 10%.  I just do not know.  I hope that prices will find a good steady rate, somewhere in the 6-8% a year growth, and time on that market will rebound to an accceptable rate.  3-4 months or so average.  When time on the market is short prices go up.  When i bought my house a few years ago in west asheville, if the house was on the market more than a few days, it had something wrong with it.  When this happens, prices skyrocket year to year.  that is not sustainable, and is what happened in San diego, Florida, California, New Jersey, etc.  While our prices are nowhere near theirs, all it takes is 5 or 6 years of 15-25% growth for regular people to get priced out of the market.  I guess we just wait and see.

On the lighter side, reading the local business section about housing normally scares people to death.  It seems like the Citzen Times reprints AP articles that are really national, or washington DC based articles about housing “crisis” or falling prices, etc, but leaves the local market wrap-up for footnotes and side-bar articles.  At least this one should offer some hope to local people that our housing market has not tanked.  while you may need to wait a little longer to sell, prices are still up.  Theoretically, of you are willing to give up on some of your INCREDIBLE gains over the past years, you will be able to sell in whatever time frame you need to. 

Just my thoughts.  Anyone have anything to add?

David

Mud 081407, This article from the Citizen-Times dated Aug 14, 2007 is yet another black eye on the developers in the Asheville area, which ultimately will result in the tightening of restrictions.  As a developer, I agree with the article in that there should be harsher penalties handed out to developers when they are in blatant violation of current regulations.  This would prevent them from just shrugging off their responsibilities.  However, I think the fines should be placed on a sliding scale based on the size and value of the development being planned.  It is ludicrous to fine the same amount to small lot developer who’s return on a project is very small compared to a larger developer who could possibly reaps millions of dollars of profit from a larger scale development.  The small developer could go broke very quickly, while the larger developer could laugh in the face of similar fine and simply pass them on to you the consumer.  I also think that people do need to understand that there are some naturally occurring events that you simply can not plan for and in these cases, if a developer quickly assesses the damages and medicates for those damages then cut the person some slack.  If, however, the developer is not quick to remedy the problem that is created, I think he/she should be fined to the fullest extent.  Development is not going to go away, this area is just too popular.  I do think though that there are proper ways of doing things and some of the developers in this area have no business being in the business.  Their lack of knowledge and general lack of concern for anything other than the bottom line makes them dangerous.  What do you think?

Brian 

Folks its getting ugly if you have a home to sell.  Generally that would mean good news for home buyers.  However,  if you do not have good credit you may not be able to find financing, because of the turmoil in the mortgage markets.  The following link has the latest article on what is proving to be a severe stagnation and/or decline in real estate markets: Home Prices Drop.  The article, as with most data, is based on National averages and does not reflect the Asheville, NC market as accurately, but the effects of other regions faltering real estate markets can be felt here.  As of today there are 7,409 single family residences available through our regional MLS system, this of course does not include any of the For Sale By Owner listings.  This number is way up, and I do mean WAY UP.  What does this all mean?  If you have strong credit and are looking to buy, now is a good time or even wait a couple more months and see what happens this winter, because sellers are going to start getting desperate, if not already there.  As home builder I can tell you what it means.  My construction company, Blue Ridge Homes, has stopped all spec building for the time being and has turned its focus on custom only.  Its lean times around our household, because we’re not building as much and as a Realtor sales are sharply off.  At this point all I can do is keep my fingers crossed that our illustrious government and banking institutions do not totally slaughter us with their lack of foresight when setting new policies.

Brian

Spruce Pine Developer,  When I read this article and makes me wonder how people can be so damn crooked and immoral.  As a Realtor and a Developer I am appalled a what some people will do to benefit themselves.  It seems that there is no extent that some folks will go to in order to increase their bottom line and yet if this SOB is ever caught he’ll probably just get a slap on the wrist and be placed in some country club prison.  I think he should be thrown under the jail or better yet chained to a chair in a room with all the people he swindled.

Realtors See Sales Drop - If you had any doubts, which I could not see how that is possible, that are real estate markets have softened and transitioned trastically from the sellers market of the past couple of years to a buyers market, just read the linked file printed last week in Asheville’s Citizen-Times newspaper.  As a Realtor its scary as hell and I try to take solice in the statements from the Association of Realtors that this trend should level out come the middle of next year, but thats still some time off.  The markets that seem to be the most affected are in the price range of $350K to somewhere around $800K.  I know that my clients who are currently trying to sell for a number of reasons or searching far and wide for a light at the end of the tunnel.  I guess we can only count our blessings that we are living in Asheville and not some of the other markets in the nation that have seen retail values drop close to 40% just to generate activity, with no end in sight.  How are the markets doing where you are from?