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GREAT MOUNTAIN INVESTMENTS:
There's Still Gold in Those Hills
From the Summer 2006 Issue
With the mountain property market now in transition,
home buyers have plenty of opportunity to find that second
home or to build their dream house in established communities
and spots that offer special values for the dollar. Here’s a
sampling of what home seekers can expect.
"Going to the mountains is going home,” wrote naturalist John Muir. And, for certain, many folks have flocked to the Southern Highlands in recent years as investors, as second home buyers, and sometimes as both.
The in-migration is not expected to stop, but it could have more twists and turns during 2006. Values and prices of mountain property are stable, although the shift is toward a buyer’s market. Those buyers can be expected to cast their eyes more often on homes already built or search out the newly developing areas where prices are still at entry level.
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Marina Bay, a community of 393 lots on Lake Lanier in Gainesville, Ga., boasts a 14,000-square-foot clubhouse
as one of its amenities.
BY KEVIN MCMANUS |
New Buyers’ Attitudes
“We notice that buyers are being a little bit choosier and willing to negotiate more for a lower price,” says Sandy Nesline of Deep Creek Realty in McHenry, Md. “In the last couple of years they wasted no time in buying, because another offer might take the property that was right in front of them.”
The McHenry area is home to Deep Creek Lake and the year-round Wisp Resort, popular with the residents of metropolitan areas such as Baltimore, Pittsburgh and Washington, D.C.
The location provides a steady supply of potential buyers, Nesline notes.
Here Today, Gone Tomorrow
“For tax purposes, investors usually keep a lot for a minimum of one year, then turn it over,” she says. “Lots can appreciate very rapidly, as in the Deep Creek Highlands and Highline developments. In the last three years, lots that cost $99,000 may have appreciated to as much as $320,000-$490,000. One lot I sold made $100,000 in three months.”
“What’s going on with mountain real estate? Seems everybody’s buying it,” says Delmer Harville, sales manager of Rocky River Vista, an eastern Tennessee development by North American Land, “and everybody’s trying to sell it,”
Rocky River Vista, in New Spencer, Tenn., sold the 34 lots of its Phase I in a week at prices of $40,000+. Phase II will include some 60 lots in this second home and retirement community. Even with the speedy sales, Harville says, “Competition is fierce.”
Effects of Today’s Market
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The Retreat, a mountaintop community near Lewisburg, W. Va., has designated 500 of its 900 acres as a community area.
BY DAVE MYERS
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In the spring, most national economists sent a wait-and-see message regarding real estate in general. But it’s hard to pin down the future for mountain properties because the mountain market is so different from an urban center.
As the market adjusts, some watchers suggest the higher-end market will be affected, while others insist it will be the broader market of mid-level buyers.
Frankly, which price range is most affected seems to depend upon the geographic location and particular attributes of the property.
The $800,000-plus market might be shifting toward a buyer’s market, but smaller properties at South Carolina’s Lake Keowee appear to have no end to their appreciation, according to Shelby Hull, realtor with the Dick Hull Team in Seneca, S.C. In fact, to get one, you may have to bid for it.
“Most of the new properties on the lake are sold via auction,” she points out. “A flyer goes out with a plat listing tentative values for each lot and the realtors represent their buyers at the auction. Of course, the highest bid wins the property. The price of lots – even interior lots – has increased, ranging up to $500,000 and higher.”
Big Money Stakes
Patti Spaniak, director of marketing at The Greenbrier Sporting Club, White Sulphur Springs, W.Va., doesn’t see that kind of pressure for high-end properties, although she notes that the luxury property market is highly competitive.
Homesites at The Greenbrier Sporting Club, near the world- famous Greenbrier Hotel and Resort, start at $400,000 and go into the millions. Their sales are healthy. The community has sold 350 of its planned 500 lots; more than 100 homes have been built. Fifty homes are under construction and another 25 or so are in the architectural review stage, she says.
In the past couple of years especially, appreciation rates for many mountain properties have been solidly within the 10-to-20 percent range, but there are also lots of examples of much higher appreciation, up to 75 percent and beyond.
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Thousand Acres Golf & Lake Resort is being planned for the southern shores of Deep Creek Lake in Maryland, located in close proximity to
several major metropolitan areas.
BY DOUGLAS MILLER
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“There’s a lot of investing, but people are not jumping in on an investment,” says Cathie Daniel, broker with Prudential Waterfront Properties at southwest Virginia’s Smith Mountain Lake. “The market is transitional and correctional.”
Although properties are staying on the market longer, and the shift is in favor of buyers, Daniel points out that Smith Mountain Lake has a strong and growing real estate market. The location also continues to grow toward a developing urban center with additional service and retail businesses.
According to Daniel, that growth, along with the addition of new developments, is testimony to the anticipated future strength of the area.
In search of new sites
As the choicest mountain and waterfront land near metro areas gets gobbled up, mountain lovers are discovering the outer reaches.
Cindy Pack found her spot in a little edge of Tennessee about 15 miles from Blue Ridge, Ga. Pack lives on Lake Blue Ridge and works as vice president of United Community Bank.
She recently bought 70 acres in Polk County, Tenn., because that area still has larger tracts of land available. Already, she has had a Florida developer ask to see the land.
“We think of this as the Tri-State area,” Pack says. “My first home was in Georgia, but I could see Tennessee and North Carolina.”
In Pack’s estimation, Blue Ridge is one of the hottest markets in the seven states that make up the Southern Highlands, and she notes that she’s observed no slowing except for that caused by the scarcity of large tracts of developable land.
The People Keep Coming
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This view of the 15th hole at The Reserve at Lake Keowee, S.C., shows the blueness of the water.
PHOTO COURTESY OF THE RESERVE @ LAKE KEOWEE
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While 2006 might be a softer year for sales and appreciation, Wallace Street, who has been selling luxury property for 35 years, doesn’t see the demand disappearing.
Private enclaves will flourish in the mountains in the next 20 years, predicts Street, who is director of real estate for The Virginian Golf Club in Bristol, Va.
The Virginian, a Flagship Communities LLC project by developers Bryan L. Weber and The Nicewonder Group, has attracted about 40 percent of its purchasers from the local area. It also draws buyers from Florida, California and the Northeast, according to Street, and he points out that the creation of amenities comparable to urban communities – including the requisite coffee shops – makes mountain developments more appealing than ever.
Developer’s viewpoint
As both auctioneer and developer, Jim Woltz of Woltz & Associates Inc. Brokers and Auctioneers in Roanoke, Va., takes the pulse of the mountain property market. His company regularly auctions properties in the Aspen, Colo., area, as well as throughout the Alleghany Highlands. He has his own 32-lot development under way in the Blue Ridge Mountains near Roanoke.
“Mountain land tracts are still all right,” Woltz says, “but they’re not selling to as many individuals. He also states he’s seen some slowing of sales, even in the hotspot of Cashiers/Highlands, N.C., at the mid-price range.
Despite his observation of a somewhat less enthusiastic sales market for mountain land, Woltz points out that his own development, Twin Falls, has sold 11 lots at $95,000-plus without marketing, and describes the project as a no-frills development where the amenities are “Mother Nature and privacy.” He expects to promote the development more vigorously this year and plans to begin a spec house on the site this summer.
Resale homes grow in value
According to Gordon Waters, a developer and an agent with Harry Norman Realtors in Blue Ridge, Ga., another trend in the mountains – and perhaps elsewhere too – is the increasing attractiveness of resale homes.
“The appreciation used to come from the growing value of the land,” he says, “but in the last year it’s come from the home, because the cost of construction and fuel has increased dramatically.
As developer of Blue Ridge Golf & River Club, a high-end project in Blue Ridge, and the Reserve at Wilson Creek, Waters has an affinity for the Blue Ridge area. But he also suggests that prospective buyers cast their eyes toward Murphy, N.C.
Harry Norman Realtors opened a new office in Murphy, located in the southwest corner of North Carolina in the southern reach of the Blue Ridge Mountains, in May.
“There are very few amenity-based developments there, but they have great climate, water, views, and are preparing a passenger train that will operate between Andrews, N.C., and Murphy,” Waters says. “Murphy is more of a long-term investment market, and it’s probably three to five years behind the Blue Ridge area.”
Waters considers Blue Ridge a more short-term investment market, but noted it’s probably up to 10 years behind places like the highly popular Highlands/Cashiers area.
Digging Into New Territory
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This home is among 100 already built at The Greenbrier Sporting Club near the Greenbrier Hotel and Resort in West Virginia.
Currently, another 50 are under construction.
PHOTO COURTESY OF GREENBRIER SPORTING CLUB
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Realtor Alan Cone of The Carolina Cone Team in Cashiers sees new opportunity for investors in the Sapphire Valley of far Western North Carolina, a spot set near the Cashiers hotspot.
Cone observes that the Sapphire Valley area has not had the runaway growth common in some mountain areas offering estate or second home properties.
“However, we’ve had a steady eight-10 percent growth year after year,” he observes, “and that is a healthy kind of growth.”
Overall, Cone notes, the market in the Sapphire Valley/Lake Glenville area is strong.
“Our sales are running the same as last year’s rate, and the appreciation rates are staying the same,” he says. “Sapphire Valley has no turnkey homes on the market so some investors and builders have entered the market with 70 new homes under construction as speculation homes.”
Cone is building three of the spec homes himself and expects to market them in the low-to-mid-$500,000s.
CLICK HERE TO SEE THE PROFILE OF TODAY'S BUYERS
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