Asheville Mountain Real Estate Blog

Asheville, NC real estate for sale. Information for buyers, sellers and mountain homeowners, without pressure. Rich content for those who are far away about what it is like to live here through the generous use of media. And some nostalgia with our, "Baby Boomers' Fun Stuff", Thanks for stopping by.

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Location: Mars Hill, NC, United States

A small, highly personalized real estate firm specializing in mountain homes and land in greater Asheville.

Tuesday, February 24, 2009

Greater Asheville's Shadow Inventory?

John Boyle of The Asheville Citizen Times had a column yesterday that addresses some pertinent questions. (ED Note: Citizen Times articles eventually disappear from their original locations).

He examines the growing number of new mountain lifestyle communities that have fallen on hard times lately:
Every time I read another story about a high-end real estate development halting building, staving off creditors or going under, I can't help but think of the boom the mountains saw in the 1920s.
Later in the article are some comments that get to the heart of the matter, begging the question of what it all means for the market (emphasis added):
Great Depression chills, anyone?

“Absolutely,” said Jim Coman, a planner for Buncombe County. “I've got a whole drawer full of plans and drawings for subdivisions and developments that I don't think will ever be built. I see a very close parallel to the Great Depression.”
Shadow Inventory
The local market, already oversupplied, will have to deal with the fallout from so many approved subdivisions now idle or nearly so. For those developers who survive, their projects will presumably restart. This represents a portion of what some have called pent up supply or shadow inventory that will hit the market in the future.

Even those developments that ultimately fail will contribute to inventory in some way, land or unfinished homes. Will it be enough to slow down a recovery? Too many variables is the quick answer.

Hyperlocal View
In our home county, there is a 7,000 acre area with 4 or 5 planned communities, now in various stages of slowdown. As many as 3,000 homes were once planned there, not to mention extensive amenities. And this is around 30 miles from Asheville, in a county with a population of 19,000.

In the five county Western region the number of planned homes has to be in the five figure range, 20,000 new homes?. More? One thousand here, 800 for that community over there, it adds up after a while.

The Metro Atlanta region is grappling with the same, but more widespread problem. 148,000 lots have been approved there for building.

Related & Unexpected
2008 was a great year for land conservancies in Western NC.

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Thursday, February 19, 2009

Thursday News Roundup: Asheville and Beyond

*The City of Asheville is now posting current street and sidewalk closures online.

*Asheville area home development is alleged as a ponzi scheme.

*Another upscale development enters Chapter 11:
Creditors have forced the upscale residential development Versant into Chapter 11 bankruptcy and a minority partner is accusing the majority partner of embezzlement.
*Regarding home prices, everyone wants to know, everyone has an opinion, but there remain certain fundamental relationships that must be restored. The Big Picture provides some insight textually and graphically on this with respect to GDP and household incomes.

**Ending on a light note...
*There are always great new photos of the Western NC mountains over at Blue Ridge Blog.

*And Mountain Express, our local news and arts weekly continues their fairly new feature, This Weekend on a Shoestring.

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Wednesday, February 18, 2009

Property Taxes: Finally Explaining The Paradox

We have addressed the continuing anomaly of falling values and rising tax assessments in the past, here, and also here.

For today, we offer a more lighthearted view which finally seems to explain it clearly. It's all a matter of perception.

Your home as seen by you:

Your home as seen by your buyers:

Your home as seen by your lender:

Your home as seen by your appraiser:

Your home as seen by the county tax assessor:

Original Source as far as we know is here.

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Monday, February 09, 2009

Household Odors? Might be Chinese Drywall

Not so long ago we wrote about the possiblitiy of radon emissions from granite countertops. Some say as much as 10% of granite in homes might be effected.

The culprit in the granite/radon issue was that huge demand in recent years made supply less uniform, and granite from some new sources may well emit radon. Blame the boom.

And Now....Chinese Drywall
Of late, another material used during the boom has raised its profile in a negative light. This would be imported Chinese drywall. The allegations here seem to be centered in Florida for now. Some officials have wondered though how far the supply chain may have actually reached before building came to a virtual halt in the US.

MSNBC leads us off with a story from January, concerning Florida:
Chinese-made drywall imported during the height of the housing boom is suspected of being responsible for the corrosion and failure of metal components, as well as foul odors...
And later in the article:
Air-conditioning evaporator coils, which are supposed to last a decade or more, are corroding and failing in homes only a couple of years old. Pipes and wiring may also be deteriorating.
The risk to human health is not definitively known, the story is too recent, but Channel 10 in Tampa, among others, report claims of health problems.

To its credit, Lennar has been the most responsive big builder, and has filed a lawsuit while working to remedy homeonwer concerns. The judicial paper trail extends to manufacturers, suppliers and contractors.

Florida NBC Channel 2 has a list of items to look for in this developing situation:
Could you have Chinese drywall?

* Does your home have a strong smell (a sulfur or rotten egg-type smell)
* Do you have corroded copper coils in your air conditioner or are the coils black?
* Do you have KNAUF written on the back of your drywall? Go to your attic and look at the back side of the drywall for Knauf. This is the manufacturer's ID, which identifies it as the drywall in question.
* Chinese drywall is thinner and lighter than typical drywall.
Time will tell.

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Friday, February 06, 2009

Baby Boomers: February, 1959

Our occasional baby boomer feature...

February 3, 1959, known as The Day the Music Died just passed its 50th anniversary.

This of course is the day of the fatal plane crash which claimed the lives of Buddy Holly, Richie Valens, (Who was only 17), and JP Richardson, a.k.a., The Big Bopper.

Most of this fate ridden story is well known. Not to be irreverent, there are some aspects not often mentioned that music buffs and fans may find interesting.

Waylon Jennings was the bass player in Buddy Holly's band. He gave up his seat on the plane to JP Richardson who was battling the flu. Richie Valens won his seat on the plane by way of a coin toss.

There was another act on the tour that winter, Dion and The Belmonts, led by Dion DiMucci, who had a string of hits in those years. Dion was offered a place on the plane, but turned it down. The $36 charter fee was more than he could justify.

This Edition's Video Clip
Buddy Holly, performing in 1957 on The Arthur Murray Dance Party.
2 minutes and 30 seconds.

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Monday, February 02, 2009

Real Estate Data: December, 2008

A couple of days late this time around, but some good detail.

The Quick Summary
Inventories in terms of raw numbers continue to fall, but demand falls at greater rates. This has been the major battle for a long time, even before the credit crisis, and now, the wider recession.

Supply and Inventories
Permits, Starts and Completions, (PDF): Declined from one year ago by 50.6%, 45.0%, and 23.6% respectively. It should be noted that the December, 2007 numbers were already down by 31% to 38% from December, 2006. Single family permits are now 77.5% less than the peak in 2005.

Single family starts have again set a record low dating back to 1959, the onset of data. In but one example of the ripple effect here, architectural billings, (Who knew there was such an index?), have also reached record lows.

New Home Inventories, (PDF): Despite these drastic cutbacks in building activity, for way more than a year, new home inventories jumped to 12.9 months of supply. 6 months of supply would be nice to see.

We continue to note however that the raw number of new homes for sale is far less than a year ago, by 33.8%, thus inviting the question, "How much lower can they go?"

Existing Home Inventories: This category, representing 85% to 90% of the market, fell to a little more than 9 months of supply. The data should be treated with caution however, as we discuss below with respect to existing home sales.

Sales and Demand
New Home Sales, (PDF): The December numbers were 44.8% less than 2007. Illustrating the plight of builders, December, 2007 new home sales were already 40.7% less than 2006.

Existing Home Sales: Declined from one year ago by 3.5%. For the year, the drop was 13.1%. Data for existing homes however should be treated with caution for a number of reasons.

Foreclosures represent 45% to 50% of existing home sales at this point. The argument is made that there are several results from this phenomenon:
1) That low foreclosure prices drive existing home sales higher than they might otherwise be.
2) That foreclosures eat into what would have been new home sales.
3) That individual sellers, the true actors in a normal market, are unable to compete with foreclosed prices.
4) That there are two "shadow inventories" of existing homes not yet measured:
A) Those owned by banks, and not yet listed for sale.
B) Those owned by "sellers in waiting", and not yet listed for sale.
Forecasts?
No great revelations here, equilibrium will come when we see a whole laundry list of items such as lower prices, lower inventories, rising employment, restoration of consumer confidence, etc, etc. Foreclosures, which rose by a record 81% in 2008 will either rise or fall in 2009, depending on the analyst.

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