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Wednesday, 08 February 2017 15:28

Selling a mountain lifestyle: Haywood housing demand is high but inventory is low

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Brian Cagle is vice president and managing broker at Beverly-Hanks in Waynesville. Beverly Hanks doesn’t sell real estate, however; Beverly-Hanks sells a lifestyle.

“That’s one of the cool things about being here in the mountains is that either you are here, or you’d like to be here. So we get to help a lot of people who’d like to be here,” Cagle said. “Some of the funnest times we have are when somebody comes in and they’ve been coming here for summers on vacation since they were kids — maybe with their parents or even grandparents — and they’ve dreamed of buying a house in the mountains. They’ve saved their whole life, and finally it’s time. That’s pretty special to be able to help people in that moment.” 

Cagle alluded to the amount of work involved in making that moment a happy one — builders must build just as sellers must sell and for that to work in concert, demand must be sufficient enough to justify the orchestrations. 

Haywood County has seen a pitched increase in demand, especially since 2011. In 2007, the sales volume of all real estate in the county — residential and commercial, homes and land — was $266.4 million. That volume declined to just $166 million during the depths of the Great Recession in 2011, but has since recovered to the tune of $236.6 million for 2016. 

Other data from the Haywood County Board of Realtors also shows encouraging growth. In 2012, sellers could expect their homes to sit on the market for more than 32 weeks; today, that figure is closer to 22 weeks. Price per square foot is up 17.7 percent since 2012, and the amount of units sold in the county is up 41 percent over that same span. 

“It’s just supply and demand, simple as that,” said Cagle. 

Driving that demand is not only the national recovery from the Great Recession, but also Haywood’s better-known neighbor to the east. 

As Asheville became a nationally known cultural destination over the past decade or so, it’s seen population growth fuel a bustling real estate market that has led more and more buyers to find better values in Haywood’s nearby municipalities — especially Canton, a scant 15 miles west on Interstate 40. 

While local demand appears strong as of late, the single biggest problem in the Haywood County real estate market continues to be supply. 

According to Beverly-Hanks Agent Broker and HCBOR President Ellen Sither, a perfectly balanced market has six months of inventory; Haywood County currently has just four months. 

“The change would have to be with new home starts,” Sither said. 

“There’s really no new inventory coming on line — or very little,” said Cagle. “And there’s a lot of reasons for that. People that were building spec homes in the past, when things got really rough, a lot them decided to retire. So the inventory’s really old, and a lot of it’s really tired, in all price ranges.”

Spec homes — short for speculative — are homes built by entrepreneurs using either their own private money or bank loans, with the sole intent of being sold. 

These capitalists assume massive amounts of risk in hopes of great reward, but rugged and mountainous Haywood County’s lack of developable land — and accompanying sewer/water issues — consistently serves as a ceiling to development and has in turn contributed to the county’s affordable housing crisis. 

Yet, in some quarters, optimism about housing stock still prevails. 

“This is a historically low time of the year for the industry. Everybody’s mindset is, ‘We don’t want our house on the market in the winter,’” said Cagle. “But it continues to be an issue for us. Will we slow this year because of lack of inventory? It’s possible. I’m optimistic we won’t in Haywood.”

Supply-side pricing is also an issue, and a relative one at that. Buyers coming from oversaturated markets further afield than Asheville are pleasantly surprised with the bargains in Haywood, Cagle said, but not everyone can afford to live in the area. 

“If they’re coming from New Jersey, they’re going, ‘Wow, these are great prices!’ but if they’re coming from Greenville they’re going, ‘What? I can’t move here.’” 

Semi-retired couple Peter and Jane Garrod are among Haywood County’s newest residents; originally from the United Kingdom, they spent almost 25 years in the Bradenton, Florida, area before purchasing a home in Crabtree in July 2016. 

“If Florida is ‘100’ [in terms of value], then Haywood is 120,” Peter said. 

Residential mortgage interest rates remain near historic lows, indicating a renewed willingness on the part of lenders to engage in that line of business and a renewed faith that the U.S economy is again on solid footing. 

The wild card in all that is the never-ending parade of legislative proposals that could impact an already heavily regulated industry.

On the state level, N.C. Realtors is a 96-year-old trade association with 37,000 members and advocates for a variety of positions meant to ensure the ongoing success of its members. 

Among its current legislative priorities are the prohibition of sales tax on professional services, increased economic development and Workforce Housing Loan Program funding, increased historic preservation tax credits and beach renourishment. 

Although the beaches of Haywood County aren’t in exactly in need of renourishment — since there aren’t any — another more locally relevant priority of the group is private road maintenance. 

“Roads are either state-maintained, maintained by the townships or the private homeowners,” Sither said. “But there are many roads out there without written agreements for maintenance, which can be costly.”

These “orphaned roads” are an issue for Realtors because when mortgage companies can’t verify a contractual or deeded relationship designating a homeowner or homeowners association responsible for road maintenance, they’re less than thrilled. 

On the federal level, the powerful National Association of Realtors spent $64.8 million in lobbying efforts during 2016, second only to the U.S. Chamber of Commerce’s $103.9 million. 

Traditional NAR agendas include the vigorous defense of the mortgage interest tax deduction, which critics say rewards the richest Americans.

President Donald Trump, himself a developer, doesn’t appear to have the deduction on the chopping block, but wasn’t shy about poking the NAR right in the eye just hours after inauguration by indefinitely postponing a quarter-point cut in FHA mortgage insurance rates.

And then there’s Dodd-Frank. 

On Jan. 30, President Trump said he’d “do a big number” on the Wall Street Reform and Consumer Protection Act, commonly known as Dodd-Frank because it was sponsored by Democratic Sen. Chris Dodd of Connecticut and Democratic Rep. Barney Frank of Massachusetts. 

Designed to prevent the kind of industry practices that led to the housing bubble and Great Recession, Dodd-Frank was enacted in 2010.

Its repeal or evisceration would loosen restrictions on banks and lead to easier access to the market for those with borderline financial histories, but would also carry with it the risk of another financial collapse like the one that hopefully remains in Haywood County’s rear-view mirror forever. 

“The only thing I know — and I don’t follow all that real closely — it does seem to me that people with money are a little more optimistic and are going to turn it loose a little easier,” said Cagle. “But we’ve got to make it work no matter who’s running stuff in government, and that’s what we try to do.”

Cagle’s optimism, seconded by Sither, seems to indicate that people will continue to buy that Haywood County lifestyle they’ve long sought. 

“The pace of life is a little slower,” said Peter Garrod. “The small-town atmosphere, people are very genuine — that’s what we found. If they say they’re going to do something, with a shake of the hand, they do it. It’s sort of old fashioned in that respect.”

“We’ve had the largest January we’ve ever had — we’re up 70 percent in written business over last January, so it seems to be taking off with a roar,” said Cagle. “Historically, January is a time we all rest up and recharge our batteries, but we’ve been running hard, so that makes me feel pretty good.”

 

Haywood real estate market at a glance 

              sales volume all real estate      avg. residential closed price

2007                 $266,478,214                                 $215,075

2008                 $142,347,987                                 $191,328

2009                 $113,587,012                                  $180,297

2010                 $115,453,988                                 $175,997

2011                 $109,558,922                                 $162,550

2012                 $147,713,367                                 $165,227

2013                 $154,195,034                                 $165,091

2014                 $163,089,357                                 $172,947

2015                 $197,455,130                                 $176,931

2016                 $236,577,508                                 $193,440

 

Haywood real estate sales figures

            days on market    res. price per sq. ft   listing inventory    res. units sold    land sold

2012              225                        $96.00                         935                         722                   143

2013              207                        $95.00                         995                         778                   129

2014              211                       $100.00                         997                        781                   137

2015              189                       $106.00                        840                         941                   141

2016              153                       $113.00                        745                        1020                  160

Source: Haywood County Board of Realtors

 

2016-17 county tax rates and revaluation schedules

               rate in cents per $100     last revaluation     next revaluation

Haywood               56.61                           2011                    underway

Jackson                   37                              2016                      2022

Macon                    34.9                            2015                       2020

Swain                      36                              2013                       2022

Buncombe             60.4                             2013                       2018

Henderson             56.5                            2015                        2020

Source: North Carolina Department of Revenue Local Government Division Aug 2016

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