Houses selling before the listing is fully public. People offering cash, and at $20,000 or $40,000 above the listing price. It’s crazy out there.
While the COVID-19 pandemic forced millions to hunker down and isolate, it sure didn’t stop them from scooping up property and finding safer, and more scenic, spots to live, especially as companies quickly adapted to telecommuting and Zoom conferences. The result—an unprecedented increase in real estate sales in the Blue Ridge region amid high demand and low inventory.
“I’ve had some people that when they started working from home during the pandemic realized they can work from anywhere, and they want to move to the mountains,” says Century 21 Legacy Realtor Natalie Gideon.
She lives in Johnson City, Tennessee, but spends much of her time listing and selling properties in Yancey and Mitchell Counties of North Carolina. She’s licensed in both states.
“All of my clients are from out of town or out of state,” she continues. “There are a lot of people who want to get away from the big city life and come to a place where they can have a simpler life, but there are more buyers than homes. Some are just having to wait. It creates a real frenzy when something new does come on the market.”
Right now, when a new property lists, real estate agents say offers begin flowing in immediately. The elevated interest has created a situation where it has become the norm for agents to announce a deadline for buyers to bring their highest and best offers. In many cases, successful buyers are offering thousands above the asking price.
“Even when we think prices are expensive here, where buyers are coming from is even more expensive so it’s much more economical for them here,” explains Gideon.
Moving from a big city to a more rural mountain community can offer some unique challenges, however; especially if the homeowner plans to keep a big-city job and telecommute from the new home. For example, Gideon says that in Mitchell County, North Carolina, there are places that do not have fiber optic Internet, but neighboring Yancey County does have it. Other spots located in mountainous terrain may have spotty cell service.
Living the Dream
The pandemic brought the uncertainty of life into full focus for many people, including Chandra and Kelly West of Rock Hill, South Carolina. They knew that “someday,” they wanted to buy a log cabin in the mountains. They fulfilled their dream in February, 2021 after they closed on a cabin in Bryson City, North Carolina, situated on four acres at 3,900-feet in elevation.
When COVID-19 forced a lockdown, Chandra’s employer, Wells Fargo in Charlotte, allowed employees to work from home. She actually changed to another division during the pandemic and went through an entirely virtual interview process. “I’ve never even met my current co-workers in person,” she says.
Along with the shift in work environment, Chandra became the caregiver for her mother after she endured several surgeries. Then in the summer of 2020, her mother-in-law passed away. All of these life changes provided the couple with a new perspective.
“The pandemic brought up a lot of fear and concerns,” she says. “It really makes you step outside of your comfort zone and ask, ‘if everything ends tomorrow, would I have accomplished my goals and dreams?’ Now I can say yes.”
They originally thought they would buy a home in the Gatlinburg, Tennessee area, but stepped back a bit due to the escalating costs in that area. They were drawn to a photo they had taken when they hiked to the top of Clingman’s Dome in November, 2018. Behind them in the photo, they could see the Bryson City area and they began looking for their dream home there.
“That picture became my inspiration,” says Chandra. “As a child I can remember tubing and rafting in that area.”
When they discovered the home for sale in the Alarka Highlands community of Bryson City, they made an offer the same day. Now, Chandra wakes up in the scenic beauty of the mountains while maintaining a telecommuting schedule. Kelly maintains his regular work on a 10-hour/four-day-week, which allows him to head to the mountains on the weekends.
“If you have Internet access, a telephone and a computer, you can work from anywhere,” Chandra adds. “It’s been seamless. I have no idea what it will look like when and if we go back to the office, but it will never be everyone in the office all at one time again.
“Being in a remote area I feel insulated from some of the drama playing out on the news. I feel so peaceful,” she says. “I feel like I’m in my own sanctuary and that’s what I need right now. I don’t know why we didn’t do this years ago.”
She considers it a stroke of luck that they found their home when they did. Other nearby homes have gone under contract almost instantaneously after listing.
“It’s crazy,” she says. “There really is no availability. If we hadn’t found ours during a lull at the end of the year, I don’t think it would have worked out the way it did.”
Frustrating Search
The frustration in finding the right property before it’s snapped up by another buyer is real for folks like Chuck Krameric. He retired as a firefighter captain after 33 years of service and served as one of the first responders to the Pentagon during the 9/11 attacks. He currently lives in northern Virginia where he rents an in-law suite. The owner of the home is getting ready to sell so he needs to find new accommodations.
He thought it would be easy when he first began his search in mid-2019. Then he slowed up a bit during the pandemic. He’s now working with two agents—one in East Tennessee and one in Western North Carolina—in hopes of finding an available property.
He’s looking for a three-bedroom, two-bath house on a couple of acres with a mountain or lake view, preferably with a garage. He’s single with no kids, no debt and enough money to become a first-time homeowner. But every time he finds something that fits his wish list, it goes under contract before he can get his offer in.
Recently, he became aware of a new listing in Johnson City, Tennessee minutes after it went on the market. He instructed his agent to put in a full-price offer. When she tried, she found out that the listing agent had changed tactics, and was now calling for highest and best offers on the property. “I went $25,000 over the asking price and I lost the house,” says Krameric.
On another occasion, he got a mobile notification of a new listing just as he was driving through Greeneville, Tennessee. He drove straight to the property and spent an hour and a half talking with the owners and touring the property. As he drove out of the driveway, he called his agent and told her to make an offer. She quickly found out it went under contract, despite the owners saying in the listing that they would not accept any sight-unseen offers. But he knew they did because he had gone to the home minutes after listing and no one else toured the home while he was there.
Krameric spends about four days each month touring available properties in this region, but usually by the time he arrives, half or more of the ones he’s interested in are already under contract. He says the competition is fierce and also includes international buyers. “One of my agents is currently on the lookout for property for a gentleman from Romania,” he says.
Creative Solutions
Derek Hawkins has been eyeing the decreasing inventory of properties in his hometown of Hendersonville, North Carolina. He’s been working as a Realtor for 17 years and is currently affiliated with Re/Max Four Seasons. He has clients willing to sell if they could find another spot to move to within Henderson County.
“I have quite a few clients who are older and their house is bigger than what they need, but it’s difficult here to find the next step for them,” he says. “Going from a bigger house to a newer, smaller one—you might think you could sell and pocket 30% of the profit. But there’s high demand for the new construction and that drives the market price.”
He’s found a proactive solution by building several spec houses, either independently or as a joint venture with other builders and land owners.
“If I was early in my career, I’d just have to get out and hustle,” he says. “But I’m now confident I can create the product. I love development. I’ve done it four consecutive times. A home we built at Sky Top Farm just went under contract. It sold when it was at the drywall stage.”
He said before the real estate bubble burst back around 2008, many people were buying homes as investments. He says that’s changed. What he’s seeing now are clients who want to live here. “They’re investing for their lives, not to flip,” he says. “If I didn’t live in Hendersonville, I’d move here.”
Virtual tours have become more popular, especially during a pandemic. Hawkins says he will provide a walk-through video for clients, but he also wants prospective buyers to see it for themselves.
“I won’t accept an offer if someone hasn’t seen the house,” he confides. “Until someone has been in it, why would I take it off the market? I would want someone who has walked around it and walked around the community.”
How long will the skyrocketing housing market continue? Sandy Shipley Manthorpe, an Asheville native and Real Estate Broker with Beverly-Hanks & Associates, says her gut tells her the current acceleration in pricing is simply not sustainable.
“I hear stories every day from my colleagues who are working with buyers who are offering $10,000, $20,000, $30,000, even $50,000 over list price and still not getting the house,” she says. “It’s heartbreaking, frustrating and time consuming for all.”
It also puts pressure on her to strike the right balance when working with clients to determine the price to list their house. “The rapidly changing market and escalating sales prices make pricing a challenge,” she says. “It’s my fiduciary duty to represent the best interests of my clients. Listing for the right price is crucial.”
By The Numbers
Market data for Asheville (Buncombe County) and the surrounding Western North Carolina (WNC) region including Burke, Haywood, Henderson, Jackson, Madison, McDowell, Mitchell, Polk, Rutherford, Swain, Transylvania and Yancey counties shows some impressive numbers.
In June 2020 (latest month for which figures area available as we go to press), there were 3,832 homes for sale in WNC. In June 2021, there were 1,922 homes for sale reflecting a 49.8% decrease in available offerings.
In Asheville alone, the average sales price increased 30.3% from $400,808 in June 2020 to $522,132 in June 2021. In the entire WNC region the average sales price increased more than 32% from $323,290 to $427,218 and cumulative days on the market until a property sold decreased 53.8% from 80 days in June 2020 to 37 days in June 2021.
Real estate agent Natalie Gideon says the average days from listing to the actual closing is 100. She says that may seem like a long time, but it’s taking that long because home appraisers and real estate attorneys are just bombarded. “They are overwhelmed,” she says, “so that 100 days is really misleading.”
Another surprising statistic, Gideon says 30% of her clients are paying with cash.
“Cash closings are so easy,” says Sandy Shipley Manthorpe, a Real Estate Broker in Asheville. “Anyone who is financing has a struggle. A bank is not going to loan more than it’s worth, so if you want to pay $50,000 more than what a bank is willing to loan you, then that’s your choice.”
“Some buyers are even waiving home inspections and not asking the seller to do any repairs,” she continues. “I call it a feeding frenzy when a house goes on the market, especially one at or below the national median home price of $330,000.”
Also Hot: Gated Communities
Gated communities are seeing an uptick in sales similar to the broader market. That proved initially surprising to Natalie Earnhardt, the managing real estate broker at Linville Ridge.
When the pandemic began, she said she was grateful 2019 had been a good year because she didn’t know how future sales would play out with so much uncertainty in the world.
“But the COVID year blew it out,” she says. “We were shocked. We did $15 million more in sales in 2020 over the previous year.”
She’s also witnessing the speed of bona fide offers. “I listed a condo a couple of weeks ago,” she continues. “I submitted the listing at 11 p.m. and had an offer by 8 a.m. the next morning.”
As of spring, Linville Ridge had about 12 properties on the market. That was a decrease from the average of 30 properties a few years ago.
The story above first appeared in our Sept. / Oct. 2021 issue.
