PROFILE OF TODAY'S BUYERS: WHAT THEY'RE LIKE, WHAT THEY WANT
From the Summer 2006 Issue
Ever wondered: Who are today’s mountain property buyers?
And why do they buy?
Gordon Waters, agent with Harry Norman real estate firm and developer of Blue Ridge Golf & River Club and The Reserve at Wilson Creek in Blue Ridge, Ga., has accumulated a vast amount of research on who the market is for mountain property.
Here’s his breakdown.
Late 30s, Early 40s, first-type buyer:
Buying first second home, but with secondary purpose of investing. They can expect some profit on a long-term sale.
Late 30s-Early 40s, second -type buyer:
Buy attractive land or lots strictly for investment, but still have options to build a spec home or subdivide their property, as many have connections in the construction industry. This is increasingly common.
The 1031 group: If they already have property on the coast, they can sell it and buy more in the mountains without paying capital gains, according to guidelines in the IRS Code Section 1031. If they want to take the tax bite and profits, they only pay 15 percent capital gains. Many still turn around the remaining money and buy land again.
Baby Boomers: Have a different mindset and want a nice, big house (could be their second, third or fourth) that they can share with their kids and grandkids. That sharing is a big attraction.
Family: A Big Factor
“The family-based intangibles are important to baby boomers, not just an investment,” Waters says, “although the wealth of the baby boomer generation is estimated at $8 trillion, and that money has to go someplace “Fifty percent of baby boomers’ home purchases are done in cash, so they are immune to interest rates and can buy … whatever the economic conditions.”
He notes that his own Blue Ridge Golf & River Club has plenty of property available, but buyers must want to help grow the community by opening a shop, art studio, restaurant or other service business.
“Not so much because you need to earn the money,” he adds, “ but for the interaction with customers and the community,
The development has three markets: $250,000-$400,000 for cabins; $400,000-$700,000 for cottages and $700,000+ for more spacious homes.
In North Georgia, certain places on the water with amenities see appreciation that is easily 15 percent to 30 percent a year, but, in Walters’ opinion, a number of properties will appreciate much faster than that.
Explosion at Blue Ridge
During three years in North Georgia, data shows lots have gone from $50,000-$60,000 to $250,000 and up; lake lots, $400,000 to $700,000-$1 million, and, mountain view lots from $40,000-$60,000 to $120,000-$200,000, according to Waters’ data.
Amenity-based communities are a wild card when it comes to appreciation, he notes.
Golf course lots have gone from $150,000 to $300,000 in two and a half years.
“At this level, you have to have a visible product, not just open land,” he says.
“There must be grass on the course, floor plans available with price points and sewer plants, because there are a lot of practical buyers in addition to the early visionary buyers.”
The developer also sees the following trends for his area, and possibly for the mountains in general:
The need to build more product for the $400,000-$700,000 customer and the $700,000+ customer; not much is currently available. These are core customers, and they want very high quality in classic mountain home construction with stone, huge timbers and poplar shakes.
The need to accommodate the active adult community. As people grow older, they are moving from places like Big Canoe and letting the younger age group move in. This group wants single-floor clustered homes with swimming and tennis. They need proximity to services and hospitals. They will want all their social needs met.
The need to find property in the range from $250,000 - $350,000. “There are a lot more customers in this price range than in other price ranges,” Waters points out. “They will still want a view, so some creativity will be called for. That may come in the form of manufactured housing made in a factory and brought in on tractor trailers. One month from the time you order your house is up. North Georgia is blessed with the weather patterns from Atlanta and Chattanooga so we can build year-around.”
