Dave Farrell was new to town. He and his wife, Shelley, had just settled into a West Asheville rental after moving from Connecticut in early April. The couple planned to use their temporary digs as a home base for house shopping. They expected a competitive market.
What they experienced, Dave Farrell says, was extraordinary.
“It was crazy. Things would come on the market, and had maybe been available for an hour, and we would learn they had already been sold. That happened to us five or six times. We would never even get a chance to look at the place, and it was already gone,” Farrell explains.
The Farrells are just two of the many out-of-town buyers who have sought to relocate to the Western North Carolina mountains over the past year. That demand has supercharged an already hot real estate market: According to Redfin, a nationwide real estate brokerage, Asheville home prices were up 22% year over year in June, selling for a median price of $411,000. Area homes now sell after a median of 42 days on the market, compared with 63 days at the same time last year.
While the market may be challenging for outside buyers, it’s even harder for locals searching for homes. The latest available data from searches by Redfin users shows that the average real estate budget for an outsider moving to Asheville was $615,500 as of April, 31% higher than the average local budget of $469,000. That disparity between outside and local buyers was greater than in either Charlotte (21.1%) or Raleigh (25.2%); those cities also had lower average out-of-town buyer budgets at about $554,000 and $543,000, respectively.
Alexandra Schrank, an Asheville-based real estate agent with the Mountain Star Team of RE/MAX Executive, says the Redfin numbers square with her on-the-ground experience. And for locals with lower budgets, she continues, options in the Asheville market are severely limited.
“If your budget is $300,000 or lower, it is almost impossible to find anything,” Schrank says. “We are seeing double-wide trailers selling for $250,000.”
Schrank calls the COVID-19 pandemic “the biggest game changer for real estate.” Low inventory due to slower building activity and low interest rates set to stimulate the economy, she says, have generated high demand both in Asheville and across the country. The national median home sale price in May 2021 was over $377,000, up 26.3% year over year, according to the most recently available Redfin data, and the median home sold in 16 days, down from 38 in May 2020.
Increased adoption of technology driven by the pandemic, she adds, has also increased the ability for real estate agents to market properties to potential out-of-state buyers. In-person real estate showings were not considered essential business during the first month of COVID-19 emergency orders, leading both agents and clients to become more comfortable with virtual home visits. “We continued to work through the pandemic, and people were buying houses sight unseen,” Schrank says.
Those recent changes to the market have intersected with longer-term trends. Justin Purnell of eXp Realty says roughly 80% of his buyers are coming from out of town, up from about 50% 15 years ago — and many of them are driven by climate change. As previously reported by Xpress (see “Head for the Hills,” Aug. 26, 2020; avl.mx/9xp), sea level rise alone could drive a 5% increase in the Asheville metropolitan area’s population by 2100.
These buyers, says Purnell, “want to get out of the California fires, coastal hurricanes and high temperatures. Climate is a big reason they are coming, and for the mountains, and all there is to offer here. They all want that lifestyle.”
And the greater acceptance of remote employment, Schrank says, is allowing people from all parts of the country to relocate. “[Out-of-town buyers] make better money than someone from here. Having more income means they can get prequalified to offer more money, or many will have cash,” she says. “Out-of-towners are beating out the locals.”
Schrank primarily works with local sellers, many of whom are benefiting from the high demand and low supply of homes in the area. Some of those locals, she continues, “feel like Asheville is getting unaffordable. Many are moving to South Carolina and Tennessee just to get out. They are cashing out.”
Sellers receiving upward of seven offers in 72 hours, often for $30,000 to $40,000 over their asking price, is not uncommon, according to Schrank. “I’ve never seen it like this. I put stuff on the market and think I am overpricing, then end up getting over asking price,” Schrank says.
For many out-of-town buyers, those prices may not seem unreasonable. Despite the recent surge, Asheville’s median home price is only 9% higher than the national figure. Many large urban markets, including Los Angeles ($935,000), Seattle ($800,000) and Boston ($750,000), had much higher median prices as of June, according to Redfin.
Asheville residents since 1977, Marsha Browning and her husband, Joseph, are reaping the benefits of the current market as sellers while simultaneously struggling as buyers. The two say they wanted to downsize while capitalizing on the high prices for local real estate.
“We sold our house in two days,” Browning says. “We listed on a Friday night at 6 p.m. and had a contract Monday morning. They offered way above,” she adds of the Florida-based buyers, who paid $481,000 for a house the Brownings bought in 2019 for $340,000 and listed at just under $460,000.
As buyers, the Brownings are unwilling to leave Asheville and the doctors they have built relationships with over the years. But for now, they’ve decided to wait out the market by moving into a Weaverville rental apartment.
“We don’t want to purchase right now,” Browning says. “It is really hard. Out-of-staters come here and have the money. We have a $350,000-$400,000 budget, but most of the houses are way over $400,000. The $300,000s or less usually need a lot of work.”
Ripples and bubbles
Despite the crowded market, examples do exist of buyers able to find something within their budget. The Farrells, with a budget between $300,000 and $500,000, were the sole bidders on the third home they targeted in their search, located in Woodfin and priced inside their range. “It’s only a year old,” Dave Farrell says, “and everything is still brand-new. It’s great.”
But local nonprofits seeking to promote and develop affordable housing options argue that individual successes don’t address the structural issues in Asheville’s market. For Scott Dedman, executive director of Asheville-based Mountain Housing Opportunities, lack of supply is a primary obstacle, and the result is higher rents and homeowner prices.
“In Buncombe County, more than 8,500 renter households are paying more than half of their income for rent. That’s about 21% of [Buncombe’s] renter households,” Dedman says, referencing 2019 census data. “At the same time, more than 5,000 Buncombe households are paying more than half of their income for homeowner costs, about 8% of Buncombe homeowners.”
Increasing supply, Dedman feels, would help. He shares some frustration with residents who protest against new residential development, especially in downtown or other areas with easy access to jobs and services, and encourages them to think about the affordability implications of restricting construction.
“We live in a popular place,” Dedman continues, “and many of us are here for the same reasons that newcomers are here. So there is high demand for land and homes. The question should be, are we working hard enough to meet the increasing demand with new housing supply?”
Like Schrank, Purnell suggests that the Asheville market may soon reach its own limits. He’s seeing an increase in buyers simply choosing to bypass the city and look at other parts of WNC, such as Jackson and Macon counties, or even outside the state altogether.
“Some buyers have sticker shock,” Purnell says of the current Asheville market. “They can’t believe how much it costs to live here. If they want mountains, they can go to South Carolina or Tennessee and find much better prices.”
And while Schrank says she has witnessed steady increases in home prices during her six years as a real estate agent, she is bracing for an eventual correction to the market. As COVID-19 emergency measures come to an end, she predicts an increase in foreclosures this fall and potential increases in inventory by spring 2022, which may cause prices to drop. “Everything that goes up has to come back down,” she says.
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When it comes to luxury real estate, location is key. From properties with French alpine to Pacific Ocean views, these luxury listings take advantage of their picturesque settings.
French alpine chalet
Location: Courchevel Le Praz, France
This wood-filled chalet overlooks the ski slopes from an expansive living room with a fireplace and an adjacent south-facing terrace.
The six en-suite bedrooms all have terraces. A closed-in area features a pool and spa, along with sauna and massage room.
Creek views in Colorado
Location: Aspen, Colorado
Price: $8.3 million
This ranchette home, remodeled in 2017, sits on a hillside overlooking Brush Creek Valley, the Snowmass ski area and Hunter Creek. The main home, which features antique 19th-century French Provincial/Mediterranean doors, has three bedrooms and 2.5-bathrooms. Features include a pantry with a custom wine cellar. A large outdoor entertaining area comes with a wraparound stone deck.
A two-story accessory dwelling unit, built in 2005, houses an art studio and kitchen on the first floor and one bedroom, one bathroom, and a kitchen on the second. A three-car garage comes with a full bath.
Spanish island villa
Location: Son Termes, Bunyola, Mallorca, Spain
This villa sits surrounded by nature on the island of Mallorca. The 12-bedroom, nine-bathroom stone residence has classic Spanish architecture, shaded outdoor sitting areas and a modern swimming pool.
Historic oceanfront in Santa Monica
Location: Santa Monica, California
Price: $7.75 million
Designed and built in 1910 by architect Robert D. Farquhar, this three-bedroom home sits just off the Santa Monica Bluffs, with views to the Pacific Ocean. The home has been reimagined with luxurious finishes, including white oak flooring and custom automated shades. The kitchen features custom two-tone Italian cabinetry and stone countertops and Wolf, Sub-Zero, and Miele appliances. The bathrooms include luxe fixtures by Brizo, Rohl, Newport Brass and Toto.
This home features a patio and the ground level and a deck on the second floor comprising more than 1,000 square feet of private outdoor space.
FGP Swiss & Alps, Hilton & Hyland, Inmobiliaria Rimontgo and Slifer Smith & Frampton Real Estate are exclusive members of Forbes Global Properties, a consumer marketplace and membership network of elite brokerages selling the world’s most luxurious homes.
B.C. real estate agent suspended, fined nearly $100K over 'predatory' rent-to-own scheme – CBC.ca
A Lower Mainland real estate agent has been ordered to pay nearly $100,000 in fines after being found guilty of professional misconduct in relation to a rent-to-own scheme allegedly aimed at financially vulnerable homeowners.
More than three years after B.C.’s real estate council first suspended Kevindeep Singh Bratch’s licence under “urgent circumstances,” Bratch has also been told he’ll have to wait another year before he can apply to get his licence back.
A disciplinary committee found that Bratch committed conduct unbecoming of a real estate agent after a hearing that saw testimony from a man who claimed Bratch acted like a “saviour,” while negotiating a deal to purchase a $2.1 million house for less than a quarter of its worth.
“Bratch’s conduct … constitutes conduct unbecoming because it targets members of the public who are in stressful positions, have limited options and feel pressured into agreeing to any terms to keep their family homes,” the council said in submissions that resulted in the penalties.
“In these circumstances, Mr. Bratch was looking to make an investment and was driven by profit. The homeowners were driven by the desire to keep their homes.”
Deals ‘disadvantageous’ to owners
The case was one of the last handled by the real estate council before the introduction of a new regulatory authority in B.C. The B.C. Financial Services Authority (BCFSA) now oversees real estate agents, mortgage brokers, credit unions, trust and insurance companies and pension plans.
The penalties — which include a $45,000 fine and $50,000 to pay for the cost of the investigation — were announced on the new regulator’s website this week.
The BCFSA will handle the file going forward.
Bratch could not be reached for comment, but a spokesperson for the regulator said he has appealed the decision to the Financial Services Tribunal.
The rulings make clear that Bratch’s activities were not illegal.
The real estate council claimed they were “disadvantageous” to owners who “did not receive independent legal advice or separate agency representation, and either believed that Mr. Bratch was acting on their behalf, or were at least confused as to his role in the transaction.”
‘This is the best case scenario’
The witness who claimed Bratch came across as a “saviour” told the council that he approached Bratch after receiving unsolicited mail claiming the real estate agent was a foreclosure specialist.
At the time, the witness — whose name is redacted in the decision — was experiencing financial difficulties; his mother had passed away two years earlier and his bank had started foreclosure proceedings on his $2.1 million childhood home.
According to the decision, the two reached a deal that saw Bratch and his wife purchase the home for $500,000 and then agree to rent it back to the former owner for $4,000 a month with an option to buy back the property for $600,000 four months later.
“The language was like this is the best case scenario, this is what you have to do in order to make sure that the bank doesn’t take your home,” the witness told the disciplinary committee.
“I’m walking into this, like Kevin [Bratch], is in my corner, he is not somebody who, who is on the other side of the table in an agreement.”
The deal ultimately ended up in court after Bratch and his wife sued the homeowner, who responded by claiming the deal was “unconscionable.”
All three parties agreed to dismiss the legal action in December 2017.
‘I do wear the different hats’
The real estate council’s disciplinary committee considered evidence related to three rent-to-own deals involving Bratch.
In one case, Bratch evicted an elderly Maple Ridge couple on Thanksgiving 2017 after taking them to the Residential Tenancy Branch, over unpaid rent on a home they agreed to sell for $233,000 less than its assessed value to a company Bratch and his wife controlled .
The council faulted Bratch for failing to disclose the nature of his relationship with the company, and for failing to recommend that the couple get independent legal advice.
That situation led to the interest of local media. It also resulted in a lawsuit that was settled in an agreement that saw the couple buy their home back from Bratch for roughly the same price he originally paid them.
In the third case, the council says Bratch paid $154,000 less than the value of a property assessed at $869,000. He rented it back to the original owners for $4,300 a month.
“When we first signed this deal I expressed concern as to whether or not… [we] would be able to execute the re-purchase option after just one year, to which you assured me, and I quote, ‘I’m not a monster, I’m here to make a return on my investment, if you can’t buy it back after one year I would extent it [sic] another year,'” the original homeowner said in an email to Bratch, shared with the council.
The original owners could not buy the home back in a year and ended up renting on a month-by-month basis before moving out in December 2018.
According to the decision, Bratch now resides in the property. It was assessed at $915,000 in 2019.
Bratch represented himself at the hearing, disputing the allegations against him. He claimed he had advised the elderly couple to get a lawyer and was clear with his clients about the transactions.
According to the decision, he described himself as wearing “different hats.”
“So I provide homeowners with the different options and again I do wear the different hats,” Bratch is quoted as saying.
“So I would be wearing a mortgage broker’s hat, a real estate agent’s hat and during that time you’re allowed to be … licensed as a mortgage broker and a real estate agent at the same time.”
In addition to the penalties and suspension, Bratch has been ordered to take an “Ethics in Business Practice” course offered by the Real Estate Institute.
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