November 10 2011

November 2011 Market Report for The Cliffs at Walnut Cove

The good, the bad, the hopeful…….and a wild card would best describe my update on The Cliffs at Walnut Cove.  And I am going to start with the hopeful.  Rumors abound that Jim Anthony, Cliffs developer has secured a substantial bridge loan that will keep him operating in the near future.  Also, there are rumors of two or three investor groups exploring involvement.  If true, this is welcome news as fear of the future of club operations and ownership was hampering real estate sales the past few months.

Good news – a home that was NOT a foreclosure recently closed on Flint Rock Trail.  Listed at $2,195,000 it sold for 81% of asking price – $1,791,000 after 112 days on the market.  This is the first home in a couple of years that was not a distressed sale.  More good news, another large home with a big view, listed for $3.5 million is under contract.

Currently, there are 43 homes and townhomes on the market, six of these are distress sales.  With only 4 homes sold (and closed) so far this year, three of which were bank-owned or a short sale, we have a long way to go to work through the inventory (sorry, that qualifies as bad news).

Of the23 resale homesites sold this year, 17 were distress sales.  Overall average sale price of all lots is $251,850 – this average sale price has been declining all year.  This is good and bad news; good that there are sales, bad that the prices are still in decline.   But that is what happens when bank-owned properties are setting the market.

6 developer lots have been sold –the last one was in July.  These were chock full of membership incentives and this abysmal statistic is why the developer struggles are so great.

Currently there are 4 pending lot sales with list prices ranging from $140,000 to $294,900 – these are all distressed sales and I predict will close for less than list price, further dragging down average price.

Active lot listings in MLS number a whopping 102 with 20% shown as foreclosures or short sales.  These numbers have held steady for over 2 years now.  Median price is $497,000; average price is $591,000 – these numbers which are steadily declining.  In the near future, most land sales in Walnut Cove will continue to be distressed sales and properties priced like distressed sales. (Bad news for short term property values, good news for buyers.)

What about the wild card?  That refers to the ownership of 190 lots by Urbana Companies and a lawsuit between them and The Cliffs.  How that resolves itself is very unclear.  And another wildcard is a 42 acre tract along the Walnut Cove Parkway that is bank owned and being marketed for $53,000 an acre.

Do I still believe in The Cliffs at Walnut Cove?  Absolutely!  But only for the family looking to live there and enjoy the incredible amenities and beauty of the surrounding mountains and are in for the long term.  Short term, it is going to be a rocky road with property values bumping along to find a bottom.  But I strongly believe the Cliffs lifestyle combined with the close proximity to Asheville is a recipe for success and long-term great value.