Polk real estate sales down 50 percent

Published 10:21 am Friday, August 29, 2008

As of June 30, 2007, there were 240 residences listed with Tryon-Polk Realtors. As of June 30 this year, the number of listings still looking for buyers had grown 37% to 329.

That&squo;s the bad news.

The good news, if the current numbers can be relied upon, is that the average price of homes in the area has remained steady from 2007 to 2008.

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The story is quite different nationally. In the past year, the average U.S. home lost 16 percent of its value, according to the August 25th edition of Newsweek.

The Wall Street Journal reported Monday that existing-home sales climbed nationally in July, rising more than expected, but inventories expanded and prices kept dropping. The National Association of Realtors said the median home price was $212,400 in July, down 7.1% from $228,600 in July 2007.

Sales prices in the Tryon-Polk area, however, have not fallen. In fact, the average residential sale price actually was up 20% in Tryon and up 5% in Landrum. (See chart, page 5)

&dquo;The number of sales are declining, prices are not,&dquo; says Paul Pullen, president, co-owner and broker-in-charge of Coldwell Banker Town & Country Realtors. &dquo;Our sellers don&squo;t have to sell. They are still getting 93 to 94% of their asking price,&dquo; in 2008, as compared to 95% in 2007.

&dquo;The sellers here are older, retired, many have no mortgage,&dquo; Pullen says. &dquo;They are not in the subprime loans.&dquo;

But, due to the reduced number of sales, the price statistics may be &dquo;a bit bogus,&dquo; according to Madelon Wallace, co-owner and broker-in-charge with Walker Wallace and Emerson Realty in Landrum.

&dquo;So few things have sold, the (price stability) statistic is a bit bogus. No one knows what the market is. Appraisers do the best job they can, but there is not enough activity that&squo;s stable to tell you what the market is. The banks are nervous, buyers are nervous, sellers are nervous.&dquo;

The total number of residential sales in the first six months of 2008 was 63, down from 133 in the same period a year earlier. Only Landrum saw an increase, from eight residential sales in the first half of 2007 to nine sales in the first half of 2008.

In the same comparison periods, the total number of land sales in the Tryon-Polk Mutliple Listing Service (MLS) area dropped from 65 to 30.

The City of Saluda and Saluda Township reported no sales to the Tryon-Polk MLS in the first six months of 2008, but Saluda overlaps with the Hendersonville Board of Realtors and is thus under-reported. White Oak Township reported a decline in sales from seven to two for the first six months, while Coopers Gap reported no sales through June 2008, compared to two sales in 2007.

However, like Saluda, the White Oak and Coopers Gap townships&squo; real estate markets overlap, in their case, with Lake Lure realtors.

Bright&squo;s Creek, located in Cooper&squo;s Gap Township, is also seeing the same volume of customer traffic as last year, according to Tom Harris, director of sales and marketing. But the quality of the potential buyers has actually improved, he says.

&dquo;That&squo;s the positive side to this weak market,&dquo; he says. &dquo;The buyers we&squo;re seeing are financially qualified and focused on lifestyle, not on investment.&dquo;

Sales at Bright&squo;s Creek are &dquo;a little behind last year,&dquo; due to a slow spring, Harris says, but it is the national economy and the stock market that is troubling the high end buyers looking at resort property, not the real estate market.

&dquo;Purchase prices are more moderate this year,&dquo; Harris says. &dquo;The strength is in the $200,000 to $550,000 range, where there&squo;s a bigger pool of buyers.&dquo;

Whatever it is that is going on, it is clear that prices in the Thermal Belt are not being driven down by a rash of foreclosed houses coming on the market, the realtors say. Sales in California right now are up 12%, Pullen says, but that&squo;s due to all the foreclosure sales. Housing prices there have fallen dramatically as a result.

&dquo;The prices here haven&squo;t started dropping,&dquo; says Andrew Foster, president of the Tryon Polk County Board of Realtors and a realtor with Walker Wallace & Emerson. &dquo;We haven&squo;t seen any foreclosures.&dquo;

&dquo;There have not been many foreclosures in this area,&dquo; Pullen says. &dquo;Some younger couples.&dquo;

The problem driving the reduced sales is simply a lack of buyers, all the realtors interviewed agree.

Pullen says there are still lots of potential buyers, but they just aren&squo;t bringing out their checkbooks.

&dquo;If I wasn&squo;t seeing buyers, I&squo;d be worried,&dquo; he says. &dquo;I&squo;m still seeing lots of buyers. They&squo;re not putting money down. I get three or four calls a day from buyers, but they are not poised to make a decision to go forward.&dquo;

Wallace says she believes that&squo;s because buyers don&squo;t want to pay too much, and aren&squo;t sure exactly what &dquo;too much&dquo; is. Add to that the fact that many potential buyers can&squo;t sell their houses elsewhere.

&dquo;We&squo;re not selling more because people can&squo;t sell their houses where they are,&dquo; Wallace says. &dquo;They want to leave other areas, and those are areas that are hurting and so they can&squo;t come here.&dquo;

The tightened credit standards are also slowing things down, Pullen says. &dquo;The availability of money is still affecting us,&dquo; he says. &dquo;Our banks are solvent. The lenders are in good shape. There is just a lot more scrutiny. One bank is now requiring 30% down on land purchase loans.&dquo;

Waterfront property is an exception to the rule, Pullen adds. &dquo;Lake property is recession proof. I had three listings (on Lake Lanier) which went under contract in less than a week.&dquo;

The highest average sales price in the Tryon-Polk MLS market area were in Upper Greenville County, which includes Lake Lanier. The average residential sale there was $402,000 in 2007 and $399,625 in 2008.

Area realtors, while smarting from the reduced activity, are mostly hanging in there, waiting for the market to turn around, Foster says.

&dquo;The last few weeks have been busier than the past several months,&dquo; he says. &dquo;It is busy one week, slow the next, up and down, not steady like normal. Everybody (among area realtors) has seen their income go down, but (the board of realtors) hasn&squo;t lost membership. We&squo;re seeing normal attrition rates, and normal gains of new members. Everybody is just patiently waiting until the market turns around.&dquo;

Membership in the National Association of Realtors has dipped by 7% since 2006, according to Newsweek.

The realtors interviewed agreed that the Thermal Belt area remains a healthy area.

&dquo;Our area is about as good a place as you can be, all things considered,&dquo; Wallace says. &dquo;Our market will improve as other markets improve.&dquo;

Foster says he thinks the pent up demand among buyers wanting a new home is bound to push through.

&dquo;The average person can&squo;t wait forever to buy a house,&dquo; he says. &dquo;The market will turn around with the political situation and the economy. The horse park is going to be an economic boon to everyone in the area. It will help us achieve the results we want, not big box stores and development but big horse farms and training facilities.&dquo;

&dquo;After the recession is over, this will still be a great place to live and people will be coming back,&dquo; Pullen says.

As for the remainder of 2008, Foster says the fall months will tell the tale.

&dquo;October is our busiest month,&dquo; he says. &dquo;Once that gets here, we&squo;ll see.&dquo;

Harris agrees. &dquo;The fall last year was by far our (Bright&squo;s Creek&squo;s) best quarter. We&squo;re just now rolling in to the time it started to get interesting last year. We&squo;re a little behind last year&squo;s sales numbers so far, but the fall purchases will tell where we wind up for the year.&dquo;