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, June 30, 2009

Spotlight Asheville

In some ways it is the age of lists, but still, Asheville makes more "top tens" than we can count.

Recent designations range from best outdoor towns, to best places to retire, best arts destinations, the ultimate best places to live, and so on, ad infinitum. And now...

From The Asheville Travel Blog
: We are now a Top Ten Dog Friendly Resort Region.

From Good Morning America Weekend, click for a 2 minute and 22 second segment from the show about our fair city. It covers the usual attractions, our favorite quote however, "a place you can come and be a part of something".

And from Scrutiny Hooligans: A list Asheville ought to be on, the greenest cities in America, and why.

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Friday, June 26, 2009

Home Warranties: Newly Popular

Some observers have noted that the home warranty industry is experiencing a boom, no doubt. In 2008, 42% of existing homes conveyed with a warranty in place.

A home warranty is different than its more familiar cousin, the builder's warranty which is associated with new home sales. The home warranty is an instrument applied to the sale of existing homes.

Home warranties are designed to cover the systems and components of resale homes against unexpected failures. Depending on the individual warranty, new owners might be protected from financial loss on anything from appliances to central air conditioning, plumbing, and more.

Rising Popularity
Private sellers have struggled during the decline with how to add value and induce buyers without spending a lot of money. At a cost of roughly $400 to $650/year, the theory is that sellers can recoup more than its cost in the sale price.

But there are a number of cautions, largely directed at home buyers, and honestly the bottom line is read your warranty.

Things to Know
The NC Attorney General's Office: Provides six useful tips. The biggest thing a person can do is read and think. The bullet points include such things as; possibly waiving your right to court proceedings if unsatisfied with a repair, the exclusion of certain failures or systems in the house, replacing failed equipment with brand names of their choice, and so forth.

The NC AG recommends having your attorney look a home warranty over and never should a home warranty be a substitute for a home inspection as part of the purchase process.

Liz Pulliam Weston from MSN Money Central extends the buyer beware theme with such questions as; What is a pre existing defect? Where exactly does my plumbing "end"?

Here is a good quick reference check list from Elizabeth Weintraub at including, items typically covered, not covered, and some general means by which payment can be denied.

The web is filled with anecdotes of home warranty snafus for buyers. The summary lesson would seem to be, go slow, think, read, and seek good advice.

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Thursday, June 25, 2009

New Home Sales: May 2009

32,000 new homes were sold in May of 2009. This is 35% less than a year ago, and 75% less than the peak in 2005.

Sales were 11% less than the previous record low for May, (1982), and now represent the lowest number of new homes sold since record keeping began in 1963.

Inventories remain high at 10.2 months of supply, something more like 6 months of supply is seen as normal. This is 4.7% less inventory than a year ago.

The reduction of new home inventories was achieved at great expense by builders. For many months now, builders have cutback on new permits, starts, and completions by 30% to 50%, barely outpacing the decline in demand in their effort to pare back inventory.

In the South, new home sales were down 36% from May, 2008.

The Dynamics
For a over a year, builders, (and individual sellers of existing homes), have been utterly unable to compete with the number of foreclosed homes for sale at low prices. Distressed sales have accounted for 45% of existing home sales, falling to 33% in May 2009. Still a staggering number.

The result has been a relative increase in the market share of existing homes, at the expense of new ones. The persistence of this pattern has fundamentally changed historic ratios in the overall market. New homes have lost a lot of ground as a market component, leading to speculation, graphs, and analysis as to what it might mean for a recovery.

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Wednesday, June 24, 2009

Existing Home Sales, May 2009

Reported yesterday with headlines such as, May Existing Home Sales Continue Rising Trend, or similar ones at Yahoo News, as a sign of stabilization.

The headlines compare May with April, 2009. A number of articles noted it was the third consecutive month of increases. One has to dig a little to see that existing home sales were around 3.6% less than 2008, and that sales rising over the previous month is the norm at this time of year.

The Context
The headlines might be called misleading because 33% of sales are distressed/foreclosed properties, the implications of that are obvious on the numbers. Maybe more important, certainly more basic, is that sales always rise from January though the summer, click for a great chart and commentary that demonstrate typical seasonality in real estate.

Oh would that it were different but from our perspective May was consistent with recent patterns, still down on a year to year basis, though by less.

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Tuesday, June 23, 2009

Asheville White Water Rafting: 2009 Edition

Summertime is upon us, and before the year is out more than 400,000 people will take a white water rafting trip somewhere in greater Asheville, one of the best white water towns in America.

The NC Drought Monitor looks better than it has in more than 30 months, so the exceedingly low water which plagued the industry moves to the sidelines for the foreseeable future. Even so, there are a number of factors to bear in mind to choose the trip that's best for you.

What To Know Before You Go
Commercial rafting operations need a special set of conditions in order to provide a suitable product. Rivers that can typically support rafting fall into two categories: 1) Those with predictable flows from hydro electric plants, and, 2) Those with less predictable flows, but large supporting watersheds.

For dam controlled rivers, the main factor is, "When does the river have water?". The water level in the second type of river is variable with rainfall, and is key to your experience. Fortunately in the age of the internet water levels are readily available, but how can the uninitiated assess the meaning of the flow that week?

Click here for a detailed primer on three rivers close to Asheville, The French Broad, The Nolichucky, and The Big Pigeon. Our article includes age requirements, water schedules, and the kind of trip to expect at the water levels when you go.

Click here for the lowdown on two other popular rivers, The Nantahala, and The Tuckeseege. A bit farther from Asheville, but not without merit.

Happy Rafting!

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Filed Under: Sights, Sounds, and Attractions

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Monday, June 22, 2009

Greater Asheville Real Estate Market at Mid Year

Well, almost mid year.

A couple of weeks back The Asheville Citizen Times ran a story under the headline, Home Prices Decline Slight in Buncombe. Buncombe is Asheville's home county. (ED Note: Citizen Times articles eventually disappear from their locations).

A couple of pertinent quotes will summarize:
The number of existing homes sold in the county so far this year was down 34.4 percent from the same period of 2008 and was less than half the number sold for the first four months of 2006...
Home values, however, have held up relatively well. Not all experts and statistics agree, but several sources say the decline in values has been less than 10 percent on an annual basis and possibly in the low single digits.
At the same time, inventory expressed as "months of supply" has ballooned to 27.3. This is around 4.5 times the number we would like to see.

CNN Money recently took a look at the most under and overvalued markets, where Asheville makes the number 10 spot on the most overvalued list.

In Madison and Yancey Counties which we also watch closely, the situation is similar:
Madison & Yancey Counties
*Home Sales: Down 32% from 2008, and down 63.6% from 2006, months of supply is 56.3.
*Land Sales: Down 66% from 2008, and down 91.6% from 2006, months of supply is 229.4.

Added Factors & Summary
A number of times we have noted the special mechanisms of greater Asheville's real estate market. Simply that buyers in our region come from somewhere else with Georgia and Florida providing the lion's share. They are the feeders for our local market.

Being states that are at the center of the foreclosure and credit crisis, our buyers are unable to sell their homes back home. Our traditional buyers are on the sidelines.

When prices refuse to fall in such a situation, local buyers disappear as well. The result is excessive inventories, and declining sales volume with the bottom a good ways off just yet.

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Filed Under: Asheville Real Estate Statistics

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Wednesday, June 17, 2009

Behind The Headlines: Housing Starts-May, 2009

There was noise this week about a 17% "surge" in housing starts. Our reaction was like, "Wait a second, that makes no sense, new home inventories are huge already, must be some quirk in the data."

So What Really Happened?
Single family starts are but one component in the larger data series that was reported, although it is the most important segment there. Something accounted for the rise, but it was not the single family units.

The single family sector for May is actually 41% less than last year at this time. It did rise, by around 7% over April. A rise May over April is normal, and as we have often noted month to month comparisons are meaningless when reported as stand alone items.

Credit goes to Diana Olick of CNBC in her article entitled High Housing Starts Don't Reflect Reality:
First of all, the biggest part of the gain was in multi-family, up 61.7 percent month to month, but that’s after falling 49 percent in April.
To any observer of housing numbers, this should be no surprise. The multi family sector is notoriously volatile and has an occasionally disproportionate impact on total numbers.

We covered this very phenomenon last May. A rise in multi family construction, unaccompanied by an increase in single family starts, cannot be called a sign of a normal, healthy real estate market.

There are more quirks in the data such as the sampling, and margin of error to explain this erroneously reported rise in housing starts. These are covered by Barry Ritholtz over at The Big Picture, who also takes Jim Cramer to task for having proclaimed yet another bottom on his TV show.

For greater context, Calculated Risk has a graph of housing starts from 1968 to the present, we remain somewhere around record lows for one unit structures.

There you go.

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Filed Under: Real Estate Statistics and Data

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Thursday, June 11, 2009

Greater Asheville News Bits

New Construction is Nice
The blog Ashevegas fills us in on a local development in The River Arts District that had escaped our notice.

An actual groundbreaking during tough economic times. This is welcome news for any neighborhood.

Phish Concert
As testament to the vibrant live music scene here, the city was abuzz this week for the long awaited and first ever Asheville appearance by the band Phish. Streets were closed and bus lines altered around The Asheville Civic Center as a crowd of around 10,000 convened. The Citizen Times takes a look at the event.

NC State Budget
The NC budget is a source of discussion and rancor these days, particularly the impact on education. In greater Asheville the topic was enough to draw more than 1,000 teachers, students, and parents to a local rally.

The Charlotte News & Observer outlines how the legislature is remaking portions of the tax code to avoid, or at least mitigate the shortfall in revenue.

In Madison County
The print edition of our county weekly also featured budget constraints and the impact on education. The main story online is the ongoing meetings regarding permits for a concrete plant outside the Town of Marshall, our county seat.

Easy General Economic Info
This is a fairly new site, maybe just a week or two old, but check out blytic. It's an utterly convenient tool for assessing the general economic conditions for places with which one is unfamiliar.

The amount of information for a location seems to be related to population density. Here are the current charts on file for Asheville, for Buncombe County, for Madison County, and Yancey County.

A user at blytic can even overlay charts, for example, Asheville unemployment vs previous recessions. Some of the data might be in arrears by a month from its official agency release, but nevertheless.

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Friday, June 05, 2009

Asheville on the Weekend

Yes, it's that time, here is our latest collection of things to do.

Friday June 5
Check out the evening drum circle, a downtown tradition that begs to be called uniquely Asheville.

Saturday June 6
Speaking of uniquely Asheville, one simply does not visit here without taking a walk on Lexington Ave downtown. No better excuse to do so than this Saturday for the Lexington Avenue Bizarre Bazaar, held from 11AM until 4PM on the first and third Saturday of every month. Website here, and photos from the first Bizarre Bazaar here.

Now Thru June 7
The Physics of Happy Hour from The Asheville Contemporary Dance Theater. Here is a review from Mountain Express for what their website describes as "quirky and edgy" for all fans of dance out there.

Other Stuff
Entertainment Section of the Asheville paper, personal pick is the opening of the new Carolina Cinema, with its auditorium concept, including cinema lounge and bar.
Outdoors Section of the paper.
Theater Section of the paper.
More theater resources and reviews.
The weekend on a shoestring from Mountain Express.

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Filed Under: Sights and Things To Do

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Tuesday, June 02, 2009

Things We Read: Economic Snapshots

No deep analysis here, just a somewhat free form roundup of recent articles from online newspapers and blogs we read in a typical week.

Real Estate Week In Review
From The Wall Street Journal's Real Estate Blog: Personal items of note would include, a 3 month high for mortgage rates, though mostly fueled by refinancing applications, and some not so good news on the future of foreclosures.

Future Foreclosures
A NY Times editorial on the matter.

US Housing Prices
Nice graph of housing prices from 1975 to the present, and from 1890 to the present, kind of puts the bubble in perspective.

The Pending Home Sales Index rose over one year ago, however the unhealthy influence of distressed properties in the mix, (45% of total sales), cannot be overlooked. More from Interest Rate Roundup, and The Wall Street Journal.

May Economic Summary
Calculated Risk has to be one of the best sites on the web to demonstrate information graphically. This is the month of May, with almost any index imaginable, from home sales and inventories, to the Architectural Billings Index and unemployment.

Personal Consumption Expenditures, a traditional leading index of economic direction, went against history and declined in April. The savings rate however was at its highest level in 14 years.

Many articles have been written in recent months speculating whether this might be a permanent shift in consumer behavior, and what that might mean for a recovery. On a global basis, Americans have been notoriously poor savers for decades until the recent downturn.

More PCE
The retail sector, and a nice graphic as to how some typical chain stores are doing. More from The Wall Street Journal on the health of the US mall.

The contraction of GDP is graphically compared here to 5 other recessions/depressions. We are in the ballpark with all of them except 1929-1933, which despite the rhetoric is still several times worse than our current conditions.

Banks & Banking
Interesting graph and short commentary on the shrinking number of banks in the US from 1984 to the present. It's probably safe to say in this case that our policies did not bring about the increased competition that was intended.

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Filed Under: National Economic Statistics and Data

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Monday, June 01, 2009

Real Estate Statistics: April, 2009

As we do every month, all the major numbers, rounded up in a single place.

The Quick Summary
We hear rumblings of a real estate bottom here and there in the media. We do not see support for this notion anytime soon.

Supply Indexes
New Homes Permits, Starts, and Completions, (PDF): Declined from one year ago by 50.2%, 54.2%, and 15.0% respectively. April, 2008 permits, starts and completions had already declined from 2007 by 34.3%, 30.6%, and 30.9% respectively.

Inventory remains high at 10.7 months, despite many months of production cutbacks like this, 77.5% from the peak. Permits and starts continue to hover at their lowest levels in 50 years.

Existing Homes: Inventories rose almost 9% from a month earlier to sit at 10.2 months of supply. A market in equilibrium is often said to be around 6 months of total housing supply. The problem of excess inventory is now in its third year.

Demand Indexes
New Home Sales, (PDF): The current rate declined by 34% from one year ago. The average sale price was $254K, vs. $314.3 from one year ago, a decrease of 19.2%.

We have noted time and again the need to look beyond the headlines, which largely and erroneously reported an increase in new home sales. In fact, the current rate of new home sales, and months of supply are worse than any time since 1963.

Existing Home Sales: Declined 3.5% from one year ago, with prices down 14.9% . In the South, existing sales were down 10.9%, with price down 12.2%. Existing homes represent 85% - 90% of the market.

45% of existing home sales are distressed properties. As we have noted many times, this is an unhealthy trait that artificially skews the market fundamentals in the following ways:
1) Inflates existing home sales volume, 2) Lowers existing home prices, 3) Decreases new home sales volume, 4) Lowers new home prices, 4) Impairs the ability of individual sellers to compete at all, 5) Thus creating pent up supply for the future.
Foreclosures and delinquencies continue to set records and signal even more inventory in the pipe. On this factor alone, one cannot call a bottom is our position.

And in Greater Asheville?
From The Citizen Times: (ED Note: Citizen Times articles eventually disappear from original locations).
The number of existing homes sold in Buncombe County fell 41.1 percent in April compared with April 2008 and even dropped 21.9 percent from March 2009, contrary to the usual trend of rising sales in the spring.
This is on the order of 11 times more severe than national numbers. To be fair, the more normal reading we have seen lately is for greater Asheville to be around 5 times worse than national numbers.

In Madison and Yancey Counties, two that we monitor closely:
Home Sales: Down 30.5% from 2008, down 52.6% from 2007, and 60.4% from 2006.
Land Sales: Down 62% from 2008, 83.9% from 2007, and 91.6% from 2006.
Home Inventory: 46.4 months of supply, around 8 times the norm.
Land Inventory: 213 months of supply, around 10 times the norm.

If every economic index turned around today, whether it be truck tonnage or the Restaurant Performance Index, large real estate inventories would still remain. Months would be required to work those off.

Any increase in buying would then bring in previously unlisted inventories in homes and land from a number of sources:
1)Banks currently holding off for better prices on foreclosed properties, (Business Week), 2) Individual sellers holding off, what we have called "sellers in waiting", (Wall Street Journal), 3) Builders holding off, would restart mothballed subdivisions, 4) Not to mention that foreclosures and delinquencies continue to set records, meaning more new inventory.
These sources possibly represent double digit percentage increases in inventory, which will mean pressure on prices, and likely, buyers on the sidelines. It's difficult to see a bottom anytime soon.

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Filed Under: Real Estate Statistics and Data, Asheville Real Estate Data

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