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Wednesday, 09 March 2011 20:30

Second-home economy makes its mark on WNC

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The second-home economy has fueled far more than construction and real estate jobs over the past decade.

“If it’s someone’s second or third home, they aren’t bringing anything with them,” said Doug Worrell, the president of High Country Furniture in Waynesville. “They aren’t moving their furniture.”

As a new economy emerged to support the second-home movement, furniture stores have proliferated throughout the region.

Worrell saw a customer last week who bought a home at Bear Lake Preserve in Jackson County and wanted it furnished by Friday. On the other end of the spectrum, a couple who hadn’t yet closed on their lot, let alone started building, were already browsing for their dream furniture.

A brand-new house also calls for art and décor. Enter the many galleries and boutiques filling downtown store fronts through the region.

“What impact does the second home market have on Main Street? Major,” said John Keith, owner of Twigs and Leaves gallery in downtown Waynesville.

Many second-home owners make a hobby out of decorating their new mountain abodes, and Twigs and Leaves had the sales to prove it. But as second-home construction slowed over the past three years, so did the purchase of artwork, Keith said.

While Keith has no doubt the second-home market will return — few places can beat WNC as a destination for retiring boomers — some galleries have been unable to wait out the downturn. Just last month, Echo Gallery in the upscale Biltmore Village closed down.

No one knows the importance of the second-home economy more than Danny Wingate, the vice president of Haywood Builders in Waynesville.

Haywood Builders nearly tripled its sales over the first half of the decade, peaking at $30 million in sales in 2006. The robust growth was fueled almost entirely by the second-home market, Wingate said.

“Our business was made up primarily of high-end second homes,” Wingate said.

The large number of gated communities popping up in Jackson County spurred Haywood Builders to open a Design Center in downtown Sylva, where people building homes could pick interior features from kitchen cabinets to bathroom lighting.

“It was a platform for us to access the Jackson County market, particularly for cabinetry,” Wingate said. It was a savvy move: Wingate recalled one homeowner who spent $140,000 on cabinets alone.

But that has all changed now.

“We are off substantially,” Wingate said of sales today compared to that boom period.

Last year, sales had dropped to $12 million, a precipitous decline from the peak of $30 million in 2006.

Wingate has a bird’s eye view of the construction industry, with builders constantly funneling through his store, where both prices and customer service beat out his big-box competitors. Contractors who were once among his top 10 biggest clients are now struggling to find work.

“Even our big boys are out of work,” Wingate said.

 

Time for reflection

The slump in second home growth isn’t all bad, according to Ken Brown, Chairman of the Tuckasegee Community Alliance in Jackson County.

Brown questioned whether the growth rates of the past decade are sustainable. Jackson County saw the largest population growth of any county in WNC among year-round residents, as well the biggest increase in home construction, much of it in the second home market, according to the census.

“It is hard to gauge what kind of an impact that had when you have that many folks building second homes,” Brown said. “It is kind of unprecedented in my time.”

The economic downturn has been like a pressure relief valve on a boiler.

“I think we need to assess just what kind of development we want,” Brown said. “You wonder if that trend could happen again if the economy does pick up. It would put a tremendous amount of pressure on the county.”

Now is not the time for counties to let down their guard on mountainside development or roll back ordinances regulating slope construction, he said. Jackson County passed some of the region’s most progressive and restrictive development regulations four years ago — largely in response to the unparalleled building boom. But that could change given a slate of new commissioners elected last fall.

“We felt like they may try to weaken or water down the ordinances,” Brown said.

So Brown and like-minded citizens in Jackson County have formed a grassroots task force to keep an eye on any moves by the newly elected board of commissioners to undo construction regulations, Brown said.

Brent Martin, who lives in Macon County and works for The Wilderness Society in Sylva, said the face of the mountains could change dramatically if the second-home dynamic continues on its current trajectory.

“It will be very interesting to see what this place turns into in another 30 or 40 years,” Martin said.

“I don’t know how we would handle it. The current downturn is allowing us to catch our breath and step back and figure out how to address the next wave of it — because it is certainly coming.”

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