For the most part, the COVID-19 pandemic has dragged down multiple segments of the economy.
But it's also provided a strange boost to some sectors, whether it's people buying every bicycle they can find or snapping up pressure treated lumber like it's gold-plated.
Another quirky niche: sales of extravagantly priced homes in the mountains have unexpectedly jumped, and mostly out-of-state residents are buying them.
"We get a lot of sales in the area in the million dollar range, but once you start getting into the $2- or $3-million range, you don't typically get that many," said Neal Hanks, president of Beverly-Hanks Realtors, which services nine mountain counties. "But we've seen more $2- and $3-million sales this year than I’ve seen in a long, long time."
More: COVID-19 could bring more out-of-state home buyers to Asheville, WNC
In all of 2019, that nine-county mountain region, which includes Buncombe, had 22 residential sales of over $2 million.
"For this year to date, 14 residences have closed over $2 million, with another 25 under contract, and it is only August," Hanks said in late August. "Sixteen of those under contract are in Buncombe County, and interestingly, eight of them under contract are in Transylvania. The high end of the market is really hot."
One home sold for nearly $9 million
Other real estate firms are seeing the same phenomenon on the ultra-high end of the market, including one sale pushing $9 million.
"It seemed like the flood gates opened after the initial shock of the shutdown," said Beatrix Masotti, managing broker-in-charge at Premier Sotheby’s International Realty in Asheville.
Her firm just recorded one of the highest local residential sales in recent memory.
"We listed a historic estate in Biltmore Forest, for $8,750,000, and it went under contract within 33 days," Masotti said. "These are unprecedented times for Asheville’s luxury real estate market."
The 15,138-square-foot home has five bedrooms, six full baths, four half-baths and was built in 1927.
Buncombe County Property Assessor Keith Miller said that sale might be the highest-priced home ever sold in Buncombe, but it's difficult to know for sure because some other high-priced sales have included sizable land parcels.
The all-time high in their database (for homes on less than five acres) is another home in Biltmore Forest, on Stuyvesant Road, that sold for $5.3 million in 2004. A home on Cane Creek Road sold for $5 million in 2013, but it included 33 acres of land.
Sluggish quarter overall
Overall, real estate sales slowed nationwide as the pandemic shutdowns rolled across the country. Beverly-Hanks noted in its second quarter real estate report for the nine-county region that overall contract signings were down 19% compared to 2019.
More: Asheville population growth slumping as surrounding areas pick up pace
But through July, sales numbers for the same region "have only experienced a meager decline of 2% from 2019," the report notes. A surge of buying activity as pandemic restrictions eased boosted overall sales. Sales are expected to remain strong in the second half of the year, partly because mortgage interest rates remain low and because we're seeing a shift of buyers moving from larger metro areas to the mountains.
Home values are also strong, rising 5.2% in the Asheville metro region (Buncombe, Haywood, Henderson and Madison counties) in the first quarter. For the second quarter, the median home sale price stood at $275,000 for the region, $325,000 in Buncombe County.
While the high-priced homes grab headlines, it's important to remember that most home sales are in a much more reasonable price range. For the second quarter, 21 homes of $1 million or more sold in the region, out of 870 total sales. Homes between $200,000 and $400,000 accounted for the most sales, at 471.
Buyers accelerating moving timelines
Still, Masotti said "a certain level of pent-up demand" existed for high-end homes because real estate sales stalled in the early stages of the pandemic, as states including North Carolina issued "stay at home" orders. But...
"What we have experienced is something far more — an elevated level of interest and activity as a result of behaviors and sentiment by buyers, as a result of COVID — which have made markets such as Asheville a beneficiary," she said. "We began seeing a significant uptick in leads coming from around the country through our Sotheby’s family, especially in the luxury realm."
Hanks said the pandemic is essentially accelerating potential buyers' timetables.
"A lot of what you’re seeing is exactly what you’d expect — people who have had an interest in our area for a while and COVID has kind of sped up their plans,” Hanks said. “A lot of people with wealth are more portable now – their careers are more portable, and they have the assets to move. We’re just seeing a lot of interest from all over.”
Wealthy folks who were looking at a move to Asheville in three to five years have decided to go ahead and pull the trigger. They love Asheville's beautiful mountain scenery and its thriving arts and restaurant scenes, Hanks said.
As Masotti puts it, "You have to love where you live, period."
As the workforce went digital, "homeowners realized the place where they now live and work doesn’t fit the mold to be able to enjoy both," she said. The more affluent can work remotely, and COVID accelerated this phenomenon.
"More and more people can now elect markets once viewed as vacation destinations as a year-round home," Masotti said.
With housing inventory low and interest high, they're not wasting time, Hanks said.
In one week in mid-August, Hanks said, his manager in Brevard told him they had two $2 million-plus transactions in one day.
"We put a house on the market in South Asheville listed at over $2 million dollars and had three showings on it (in one week)," Hanks said. "You just don’t get that many showings."
Some are buying even before touring the home. Hanks said they sold one ultra-high-end home "within a week, sight unseen.
"The guy flew in here on his jet three days later, looked at it and flew out," Hanks said. "That’s the kind of stuff we’re seeing.”
Where are the buyers coming from?
Hanks and Masotti said most of the ultra-high-end buyers are coming from out of state, particularly the Northeast and Florida, although North Carolina has plenty of wealth, too.
"Florida and the Northeast continue to bring the big bulk of out-of-state buyers," Masotti said. "Naples, Sarasota, and Central Florida markets are direct feeder markets for us. However, we are still experiencing high interest from the Charlotte and Triad areas."
Referrals coming from other Sotheby’s offices around the country have risen 50%, she added, and website traffic has risen 54%.
More: Skyrocketing lumber costs, fueled by shortage, will lead to higher home and project costs
"Though many of our visitors are coming from the U.S., worldwide numbers are staggering, especially from the UK," Masotti said.
Masotti said the "new norm for luxury" is now closer to $2 million. Their sales numbers have increased, and Masotti said they're "excited about many of our high-end listings spending less time on the market."
"We haven’t experienced a significant shift like this in years," Masotti said. "Who could have predicted that we would see multiple offers in the $1M-plus (range)?"
For the overall market, $2-million-plus listings have "surpassed the 2019 numbers for Buncombe County and not just in high-end, gated communities," she added.
The high interest in these high-end homes started in late 2019, she said, but the pandemic did cause a "short blip" in March and April. Now, the high-end market is roaring.
"Multiple offers are also coming in at higher price points, which has not been the norm," Masotti said.
While these high-end homes have been selling well in Biltmore Forest and Walnut Cove, outlying areas are also seeing an uptick. Privacy is becoming more appealing to some people, Masotti said.
With the pandemic lingering and the mountains remaining ever-alluring, the high-end sales are likely to continue for the foreseeable future, Hanks and Masotti said. Election years can roil markets, but Masotti pointed out that both candidates "are perceived as generally business friendly," and the stock market has continued to grow.
In short, the future of wealth looks pretty solid right now, Masotti said.
"We may witness a very brief pause in activity as people become focused in the final days on the huge distraction of the election, yet we have complete confidence in the resumption of interest and demand once (it's) over," Masotti said.
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