4 Year Study
Blowing Rock, North Carolina School District
SOLD Homes

2 Year Comparison
Watauga County, North Carolina
SOLD Homes

Date	Number Homes Sold	Median Sales Price	Average Sales Price	Average Sold to List %	Average Days on Market	Total Dollar Volume of Homes Sold
9/01/05 - 8/31/06	792	$270,000	$333,000	95.6%	181	$263,000,000
9/01/08 - 8/31/09	374	$258,000	$324,000	91.8%	192	$121,000,000

1) 61% of homes sold in all of Watauga County 9-01-08 to 8-31-09 were priced under $300,000.

Blowing Rock School District
Homes For Sale
9/21/2009

Date	Number Homes For Sale	Median Listed Sales Price	Average Listed Sales Price	Average Days on Market	Total Dollar Volume of Homes For Sale
9/21/09	341	$599,000	$759,000	215	$258,000,000

1) 60 homes in Blowing Rock School District are currently listed for over $1,000,000. This means nearly 1 in 6 homes listed for sale in Blowing Rock School District has a $1,000,000+ asking price.
2) Removing the sixty $1,000,000+ homes drops the average listing price to $499,900 in Blowing Rock School District.
3) These sixty $1,000,000+ homes have an average days on market of 280 days and represent a listed dollar volume of $108,000,000.

Blowing Rock School District
Homes Under Contract
9/21/2009

Date	Number Homes Under Contract	Median Listed Sales Price	Average Listed Sales Price	Average Days on Market	Total Dollar Volume of Homes Under Contract
9/21/09	12	$535,000	$549,000	275	$6,500,000

1) No home is under contract as of this date listed for less than $300,000
2) No home over $1,000,000 is under contract as of the date of this study

Watauga County
Homes Under Contract
9/21/2009

Date	Number Homes Under Contract	Median Listed Sales Price	Average Listed Sales Price	Average Days on Market	Total Dollar Volume of Homes Under Contract
9/21/09	68	$279,500	$347,000	220	$23,000,000

1) 36 of the 68 homes under contract are priced less than $300,000
2) No home over $1,000,000 is under contract as of the date of this study

Blowing Rock School District
Luxury Homes SOLD Trend
4 Year Study

Date	Number Homes Sold	Median Sales Price	Average Sales Price	Average Sold to List %	Average Days on Market	Total Dollar Volume of Homes Sold
9/01/05  8/31/06	9 of 234	$1,375,000	$1,750,000	89.9%	234	$15,800,000
9/01/06  8/31/07	16 of 205	$1,497,000	$1,570,000	92.7%	317	$25,125,000
9/01/07 -8/31/08	22 of 143	$1,245,000	$1,320,000	91.1%	245	$29,100,000
9/01/08  8/31/09	7 of 88	$1,575,000	$1,695,000	85.1%	145	$12,000,000

1) 9 of 234 means out of 234 homes sold that year, only 9 sold for over $1,000,000

WHAT’S GOING ON IN REAL ESTATE

By Robbie J. Sharrett

Copyright 2009

Most of the analysis of the local real estate market sales data shown in my study is not based on the calendar year due to my choice to use the significant financial meltdown in September 2008 as a watershed event and I base my historical data on those time periods. I have used a September – September time period for the real estate market comparison here. My analysis was based on data made available to me through my membership in the High Country Association of REALTORS Multiple Listing Service.

For a complete report, including charts with historical local market data please review the charts above.

In the Town of Blowing Rock permits for new single family construction fell in 2009 after a strong increase in 2008 from 2007.

There were 26 permits for new single family construction in 2008. To date only two permits have been given in town for single family construction in 2009.

Local renovation and addition activity appear to be somewhat lower than 2008 but the bottom has not fallen out of that segment of construction in town for 2009, like it did for single family residential construction.

In 2008 346 total permits were issued by our town’s planning and inspection department. To date 232 total permits have been issued.

Nationally, single family housing starts slid in 2009. Multi-family housing starts activity increased 35% in August. This surge created an overall uptick in August housing starts. Compared to August 2008 the total August 2009 national housing starts were down nearly 30%. There have been 14 consecutive quarters of declines in residential investment nationally.

In our entire High Country Association of REALTORS for the term period 9/1/08-8/31/09 663 homes SOLD with a median sales price of $235,000. Nearly 70% of all homes SOLD in this time period were under $300,000. Compare this volume with the recent high water mark three years ago (September ’05 – September ’06) when over 1200 homes SOLD in our MLS.

The High Country Association of REALTORS MLS primarily covers all of Watauga and Avery Counties as well as parts of Ashe, Wilkes, Caldwell, and Johnson and Carter Counties in Tennessee.

In Blowing Rock September ’05 – September ’06 was the high volume year within the past 4 years, except for million dollar plus homes which hit their peak sales two years later in Blowing Rock. After September ’07 – September ’08 the number of million dollar plus homes SOLD drastically dropped 70% for the September ’08 – September ’09 time period in Blowing Rock.

Blowing Rock School District contains 55% of all the million dollar plus homes listed for sale in Watauga County. This represents 56% of the dollar market share of million dollar plus homes listed for sale in our county. Review sales data for million dollar plus homes in the area using the charts above.

There is a lot of cash sitting on the sidelines looking at the local real estate market. Investors are trying to time the bottom -- luxury home price reductions are being monitored by these potential buyers.

Some investors believe that buying luxury items (car, boat, home, etc) is appropriate 10% before the market hits bottom because the bounce back from the bottom when the market begins to turn is usually 10% up immediately on luxury items.

Foreclosures are a very small percentage of our entire MLS inventory. The foreclosure curve in our area, in my opinion, is still on the rise. Many recent potential buyers approach every home for sale in our area as if it’s a pre-foreclosure. These buyers (“bottom feeders”) are sometimes shocked when their offers are not accepted.  Although there are more motivated sellers these days than in years past, not every seller is in desperate straits in our area.

In fact, several price ranges of area homes are still selling close to asking price. However, these homes stay on the market longer than in years past and the number of homes SOLD has dropped about 50% from its recent high during September ’05 – September ’06.

There are several VERY HOT niche real estate markets in our area – student condos, foreclosures, short sales, builder/developer urgent sales, income producing properties and homes under $250,000.

ROBBIE’S SUMMARY AND OPINION

1. Builders and speculators left the “affordable housing market” to target the luxury buyers.  Their thinking seemed logical...'if the Big Middle is not selling and I can't make enough money above local development costs to warrant building homes under $300,000, why not target the real estate buyers with lots of money where my profit margin brings a higher return?"  One minor problem with that....the crest of the bell curve of the market had already passed and most did not believe that announcement on the loud speaker applied to Blowing Rock. 
2. The luxury home buyer left the real estate market after the stock market decline began several years ago and/or their home located in Elsewhere, Florida did not sell.  The first domino (the unsold Florida home or the 'flipping' Carolina beach house) was not falling, so our local real estate inventory started to stagnate while even more new spec homes were being built here.
3. Some of the luxury home buyers for our area were caught “holding the bag” on speculative real estate deals elsewhere.
4. Land developers continued to bring upscale subdivisions to market in the last 5 years. These lots are not selling. Prices are being cut. 
5. The first time home buyer jumped in the market in droves after the April ’09 creation of the $8,000 federal income tax credit.
6. Existing “affordable” inventory sold like hotcakes this year.  Renters became home owners and took an important lifetime step to personal financial wealth building.
7. The first time home buyers who were too selective to buy this spring and summer now have much less inventory from which to choose and are gambling that the first time home buyer tax credit will be extended or re-instituted in 2010 so they can continue to be overly selective next year.
8. There are very few new affordable homes in our area because (1) land and development costs are high, (2) most of the recent new homes targeted the luxury buyer and (3) area governmental entities who decry the abysmal lack of affordable housing do not substantially financially support and spearhead efforts to assist with development of such.
9. Cheap lots (located WAY OUT of any town) sold for owner-built construction of inexpensive stick built or modular homes.
10. There is a very limited supply of building lots in town and close-in to Blowing Rock.  
11. Investors who are cash-ready wait and watch on the sidelines. 
12. The local market is showing an improvement in a wider range of home prices. (When you’ve been near the bottom, any increase is an improvement).

Many people ask me “When will the real estate market return to normal?”

“Normal” was not several years ago when everybody and their sister wanted to flip houses and were given nearly 100% loan to value mortgages to buy a luxury home or build a high dollar spec house or develop a mountain subdivision based on inaccurate overly optimistic or fraudulent market projections.

“Normal” was not this past year with crashed banks, high unemployment, ravaged retirement accounts, rampant foreclosure in some areas, extremely low interest rates and government rescue of certain industries.

We kept hearing “this is going to be a jobless recovery!” How does economic recovery happen without jobs?

“Normal” won’t be here for a while.

The only “normal” aspect of our market is the ever present buyer looking for a bargain, and there are slightly more bargains at this time.

The public perception of this low level of sales activity for all REALTORS is inaccurate in our area. Some local agents, like me, are having their busiest year ever putting deals together for buyers and sellers.

The fantastic news for some home buyers is this current optimum nexus of affordability (influenced by some seller motivation and first time home buyer tax credit) and low interest rates (influenced by the Fed) has recreated a rare opportunity to actually own a home in our typically “unaffordable” area.

There are a few significant opportunities in our real estate market – a golden window for those able to take advantage of some instances of value pricing for quality real estate.

Here is my final note: The opinions and observations expressed in this report are solely those of Robbie Sharrett and do not represent any position or endorsement by The Blowing Rock Chamber of Commerce. This study was created at the request of The Blowing Rock Chamber of Commerce for their Chamber Newsletter.