New Home Sales Graph (1963-2010)
There is no mistake that over the last three years, we have been in a real estate recession that runs deeply, nationally, regionally, and locally. Some markets have been hit harder and some markets are recovering faster, but there remain significant discounts from the peaks of 2007-8.
The Toxaway-Sapphire-Cashiers-Highlands market is no exception. Pricing points have dropped dramatically on a macro level, but every community is its own market. That is not to say that communities that share similar characteristics can be apples to apples i.e., in the same competitive set, and therefore, can share pricing points. But in many cases, each community is its own market and has its own competitive set.
A large consideration in investing in real estate in the Toxaway-Sapphire-Cashiers-Highlands is the size and financial stability of the development. In this market, every subdivision/community of size has experienced distressed sales, foreclosures and short sales. These distressed sales have a huge impact on values within the development, and bring pricing points down. Whether it is the developer declaring bankruptcy or individual lots/houses going back to the bank, invariably the bank will write it down and place the asset back on the market at 30-50 cents to the dollar of the original price. All property values surrounding the distressed ones will plummet and a new lower comp set is established. The values and original investment in the property are lowered.
Burlingame Country Club
A large segment of the affluent second home market in the Western North Carolina area is associated with country clubs. There are twelve country clubs between Lake Toxaway and Highlands on a twenty mile stretch on Highway 64. While the country club brand has its appeal for offering families lifestyle choices, the requirement of owning real estate behind their gates, has its flaws.
To qualify for membership in these country clubs, the capital investment is excessive, especially when a member has to park, in some cases, $500,000 for land. The lot may be inferior real estate located within the club grounds in the woods with no view. This primary cost for the real estate, in addition to the initiation fee for the club, (as much as $150,000) and added to the club’s annual dues of $20,000 a year, raise the costs for a second home, unnecessarily high. While the lifestyle and country club brand might be appealing, the economics of owning a seasonal home used perhaps a few weeks a year, are hardly justified.
Where you play and where you live can be mutually exclusive of each other. There is now the choice to buy superior real estate for a home located outside the club gates, while still enjoying membership and its amenities.
Sapphire Valley from Preserve at Rock Creek
At Preserve at Rock Creek, we have no distressed sales, foreclosures, or defaults and property values have held steady. Property owners at the Preserve are not laden with high fees from the expenses from country club amenities. Property values are not being pulled down from the bank write downs, and the annual dues are minimal compared to country club amenity fees. Not only does the Preserve offer privacy, natural beauty in conservation and great views, but the values are steady and the economic windfall of investing there, is unmatched in the area.
Preserve at Rock Creek has the best of both worlds. Buyers have the option to access Country Club amenities without the hefty cost while owning steady real estate with property values not pulled down by market conditions.
For more information on the Preserve at Rock Creek, contact us.
About Tim Bright, Developer
