New Home Construction Booms, Prices Soar
New Home Construction Booms, Prices Soar
The market is a boon to builders and Realtors, but leaves even some of them worried about the fast pace of development and the lack of affordable housing.
ROSMAN — To drive into GlenLaurel Preserve is to be confronted by the sight of more than a half-dozen partly shingled, under-construction homes flanked by earth-moving equipment and white plastic permit boxes.
“We’ve been sitting on it for a long time and we finally started to get serious about it,” Ted Futrelle, owner of MountainSide Homebuilders, said of the 215-acre project about five miles west of Brevard.
“We’ve designed a new product and it’s been received incredibly well.”
Such scenes — and such reports from busy builders — are common these days in Transylvania County, which issued 177 permits for single-family homes in 2021, according to a report completed this week by the county’s Department of Building Permitting and Enforcement.
That’s a 51-percent increase over the 117 homes permitted in 2020, according to the report. It’s also the most in nearly 20 years, said the department’s director, Mike Owen.
“This has been the biggest residential construction boom we’ve seen since the early 2000s,” he said.
The number could easily be higher, said builders and Realtors, if not for the scarcity of skilled labor and limited availability of land.
And even some of the people benefiting from the hot new-home market expressed concerns about its impact on the county.
The same forces that are driving up all housing prices are, of course, at work on new houses, which typically carry prices of more than $500,000, said Paul Wilander, an owner/broker at Looking Glass Realty in Brevard. Meanwhile, he sees a distinct shortage of moderately priced housing.
“We wish there were more of that,” he said. “We’re selling what’s available.”
Custom home builder Joe Fennessy, meanwhile, worries that rapid development will diminish the natural beauty that has long been Transylvania’s main appeal.
“At some point you have to say enough is enough,” he said, before referencing a famous line in a Joni Mitchell song. “Do we really want to pave paradise and put up a parking lot?”
The Numbers
Despite rising demand, residential construction had remained mostly flat before last year’s dramatic jump, with the country issuing between 112 and 120 permits annually from 2016 to 2020.
Commercial activity followed a similar trend: the county issued an average of about 60 permits for commercial remodels or additions during the previous four years compared to 80 in 2021.
And though permitting for new commercial buildings dropped slightly in 2021, the increase in residential construction and commercial renovations — as well as rising costs of materials and labor — helped boost the total value of construction in the county from $98 million in 2020 to $168 million in 2021.
The numbers for single-family home permits do not include one traditional source of moderately priced housing, manufactured homes. The county issued an additional 41 permits for these units in 2021, the report said.
And though it did not document any multifamily permits issued last year, there may be a significant affordable housing project on the horizon.
Workforce Homestead Inc. whose effort to build an 84-unit, government-subsidized project near Brevard High School was recently rejected by the Transylvania County School Board, has submitted plans to the city of Brevard for a similar project on a 7-acre plot at Woodland Terrace and Meadow Lane.
It is scheduled to be discussed by the Brevard Planning Board at its Jan. 25 meeting.
Out-of-Town Buyers, Lots of Money
But as many residents have complained of being forced out of the county by high housing costs, many more buyers, especially those from outside Transylvania, seldom blanch at ever-rising prices for both new and existing homes.
There will inevitably come a time when high costs will stymie demand, Realtors and builders say, but there’s no sign of it coming soon.
Beverly-Hanks Realtors third-quarter report showed that the median price — the price range’s midpoint — for a new home in Transylvania had soared past Buncombe County’s for the first time in memory, to $403,000. An even more dramatic picture of climbing prices can be seen in a year-end report run by Billy Harris, a Beverly-Hanks Realtor.
The average, as opposed to the median, price jumped from $482,000 in the six months before July 1 to $539,000 in the last half of 2021. And even in the face of these rising prices, the percentage of cash transactions during those same periods climbed from 37 to 45 percent, the report showed.
“There’s so much liquidity out there (and) our real estate is still relatively cheap if you’re coming from California or New York or Connecticut,” Harris said. “The amount of wealth coming into Western North Carolina is going to continue. I just don’t see it slowing down.”
“Brevard has recently been discovered nationally, I think,” said Fennessy, who lives near Brevard but specializes in building high-end homes in Lake Toxaway. “My phone has rung more in the last three months than it did all of last year, and it was crazy last year. There is a lot of available money out there right now and people are looking to spend it.”
Futrelle made a total of 110 lots available for sale in GlenLaurel in April and so far has signed contracts to build 14 homes. Many of these deals are for “courtyard” houses with between 1,500 and 1,900 square feet of enclosed floor space.
Their prices range from about $450,000 to more than $550,000, he said, not only because of high construction costs, but because customers are willing to pay for additional space and “really nice features.”
“We have people really spending a lot of money in either making them larger or dialing them up,” he said.
The Future
This supply of wealthy out-of-town buyers is one reason real estate industry insiders think the hot market for new homes will continue, at least in the short term.
Other factors are the robust sale of lots and the declining inventory of existing homes, Harris said.
He had about 30 homes listed for sale at the start of last year, he said, compared to precisely one this year.
He is offering, on the other hand, 60 lots for sale and turned over many more than that last year. One particularly dramatic example of the demand for land, he said, is the Big Hill development off East Fork Road, where he sold zero lots in 2020 compared to 14 in 2021, he said. Most of these went to buyers looking to build as soon as possible.
“I think your building permits — if the builders can keep up with the work — are going to continue to increase in the next 18 months,” he said.
That is a big if. The shortages of labor and materials represent the main bottleneck to construction in the county, according to everyone interviewed for this story.
Futrelle said he is well positioned to continue building at a robust pace. His company is the exclusive builder in GlenLaurel, where he expects lots will continue to be marketable because, unlike parcels in most of the county’s developments, they are served by sewer, water and natural gas lines. And there are enough of them, he said, to keep his company busy “for years.”
But he’s also had to turn down customers for homes outside the development, he said, because he couldn’t promise to complete homes within customers’ time frames.
“There’s just not enough skilled labor to build houses at the pace the market is demanding,” he said.
Going forward, the big obstacle to building may be land.
Owen said the planned expansion of the town of Rosman’s utility lines will open up the corridor west of Brevard for more development.
But almost all of the lots currently available are in subdivisions built before the crash of 2008, Wilander said. Finding land to build sizable new communities is an extreme challenge, given factors such as steep slopes, dense forests and the high costs of clearing land and building roads, he and Harris said.
“If a developer came to me trying to find a 20- to 500-acre parcel that has good road frontage, good topography, half-decent neighbors and some amenities . . . I don’t think I could show them one in Transylvania County right now,” Harris said.
Which may be just as well, said Fennessy, who is concerned about both sprawling growth and increased density in Brevard. Though he recognizes the need for reasonably priced housing, he is even opposed to the planned Workforce Homestead project and he suspects most other county residents are as well.
“I moved here from Southwest Florida because I liked the small-town feel of Brevard,” he said. “Now you drive through Brevard at 5 o’clock on a Friday evening and you wonder where the hell all the people came from.”
Soon... beautiful Brevard will be known as 'Little Florida'?