Macon making sustainable growth in real estate market
It hasn’t been a quick or easy recovery, but Macon County real estate is back on the rise and Realtors see that trend continuing into 2017.
After a slow downward spiral following the market crash, John Becker, owner of Bald Head Realty, said Macon County is finally starting to dig its way out into a more healthy and manageable housing market.
A total of 609 houses were sold in 2016 for a total value of over $81 million — that’s almost double the real estate sales in 2012. Becker’s business alone has seen a 30-percent increase in 2016 over 2015. With only seven agents on staff, the independent agency grossed about $29 million.
“In general, this market had been descending for five years or so. It was cruising downward steeper and steeper and it was pushed that way by all the foreclosures and short sales we had,” Becker said.
All those foreclosures and short sales following the recession further hurt the local markets when the federal government stepped in and mandated that appraisers had to start including those foreclosures and short sales when determining comparable home values in the area.
“It lowered the value of homes and spurred some sales at the time,” Becker said.
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But now that many of those foreclosures and short sales are off the market and not bringing down the value of other homes in the area, Becker said real growth is underway.
Home value recovery mixed with interest rates that are creeping upward has put dual pressure on the real estate market. As interest rates begin to climb, many people have that “fear of loss” pushing them to either put their home on the market to sell now or buy a home now while rates are still good. Becker predicts things will only get better moving forward.
“Our records don’t indicate a sharp ascent — it will be gradual — but with the new administration in office, a whole lot of regulations are being peeled back to make it easier for people to get a loan. That will really help,” he said.
President Donald Trump’s administration is working toward rolling back some of the financial regulations that were put forth in the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010 in the wake of the 2008 financial crisis. Dodd-Frank put an end to loose lending practices that helped cause the bubble and crash, but the downside is it made it much harder for people with lower credit scores or higher debt to get approved for a mortgage.
Macon County’s real estate has always hinged on the second-home market, whether people are buying million dollar homes in Highlands or buying a more moderately priced home closer to Franklin in anticipation of retiring to the mountains.
Local Realtors will tell you that Macon’s second-home market has always been dictated by what’s happening with Florida’s real estate market because that’s where most of the buyers are coming from.
“When we see big movement in Florida, we know there’s going to be big movement here,” Becker said.
Another eye catcher when looking at the housing market stats for Macon County is the increase in the number of cash offers. Out of 609 home sales in 2016, 262 of those were cash transactions while 240 were done through conventional financing.
Becker said the increase in cash offers could be attributed to what’s been going on in the Florida market over the last few years.
Two years ago there was an “artificial movement” in parts of Florida when big hedge fund companies came to areas like Cape Coral and bought up all the foreclosures in one clean sweep, which gave the appearance that the area didn’t have any inventory. Becker said that spurred contractors to start building and when inventory was stable again, the hedge fund companies put all those foreclosure homes back on the market at a much lower value.
“That’s all over now. All those areas are doubling in home values and people are selling them and coming up here to buy a home — that’s where all that cash is coming from,” Becker said.
Sherman Pope, a broker with Pat Allen Realty Group in Highlands, confirmed that the second-home market is indeed on the rise.
“I can tell you that 2016 was our busiest year yet and we’ve already started 2017 off with a bang,” he said.
Pope said folks coming from Atlanta and Florida to buy a home in Highlands are still getting good deals on homes since the prices are still down compared to 10 years ago.
“Some new houses are being built but for the most part, people are buying older homes and remodeling them because the prices have come down over the last few years,” he said. “It just makes sense for them to buy now and renovate.”
While other counties like Swain have reported an inventory shortage, Macon County is in the sweet spot with plenty of options for every price range. As of Monday, there were about 400 homes on the market.
Pope said Highlands usually has plenty of inventory, though a good deal of it was cleaned out during 2016. If priced correctly, he said, sales are brisk, but others have sat on the market for more than a year.
Pope said people are drawn to places like Highlands and Cashiers because of the privacy and the small-town feel they can’t get in the urban areas.
“People want a sense of community and to get away from the big cities where they’re living,” he said.
Homebuyers with the same goals but small budgets may choose to come to Franklin or the surrounding Macon communities. In addition to retirees and second-home buyers, Becker said he’s also seen many younger Macon County natives who are now returning to their hometown to start a business and settle down with their families.
“Young people leave here in droves after high school because there’s nothing to do, but they end up coming back and now you see these mom and pop businesses popping up here,” Becker said.
It’s a natural progression Becker sees continuing into the future without the fear of over-development. Franklin is unlike Waynesville or Sylva because it’s surrounded by national forests.
“We can’t sprawl out and that’s good because it keeps the population small. We don’t have the demographic footprint that appeals to national chains and that will keep the town quant and little and that’s what people really like,” he said. “I’m optimistic for 2017 — the inventory is there, the loan capability is there — there’s no reason why we shouldn’t have a good year.”
At the end of the day, everyone benefits from a healthy real estate market. When real estate values are up and more people are buying homes, it means more money for county budgets. County Manager Derek Roland recently made his preliminary budget presentation to commissioners and reported that revenue is up more than $1 million over last year — $760,208 of that increase was from property tax.
Macon County real estate trends
(Excluding homes sold in Highlands)
2016
• Homes sold: 609
• Number of new listings: 1,019
• Average price: $133,388
• Average days on the market: 203
• Total sold amount: $81,233,277
2015
• Homes sold: 523
• Number of new listings: 971
• Average price: $134,166
• Average days on the market: 214
• Total sold amount: $70,168,842
2014
• Homes sold: 435
• Number of new listings: 948
• Average price: $135,388
• Average days on the market: 210
• Total sold amount: $58,893,963
2013
• Homes sold: 482
• Number of new listings: 1,024
• Average price: $130,698
• Average days on the market: 207
• Total sold amount: $62,996,322
2012
• Homes sold: 349
• Number of new listings: 889
• Average price: $128,197
• Average days on the market: 218
• Total sold amount: $44,740,886
Source: Navica MLS
