The views from the Arnold Palmer golf course at Balsam Mountain took my breath away.  The course took about a dozen golf balls.   

 

    As reported here yesterday, Balsam Mountain Preserve near Waynesville, NC, has recorded its best first quarter sales performance in its eight years. Balsam Mountain caught the market wave early enough in 2001 and built its wide range of amenities before the economic storm.  Now, with everything pretty much built and functioning smoothly, and with the track record and deep pockets of its developers, Chaffin & Light, it appears to be sailing along.
    I don't typically do a lengthy follow-up to a review I published less than a year earlier, but those sales numbers piqued my curiosity.  So I called and

spoke with Balsam Mountain's Bruce Fine this afternoon.  The director of sales and marketing told me that most of the 11 properties sold from January through March were to residents of southern states looking for vacation homes.  Eleven may not sound like much to those of us who remember the irrational exuberance of just four years ago, but that is 10 or 11 more than Balsam Mountain's competitors are reported to have sold in Q1, including the much promoted Cliffs at High Carolina, site of Tiger Woods' first American golf course design.  And it is way better than communities like River Rock, near Cashiers, where progress has virtually come to a standstill at the site of a Phil Mickelson design.  Tiger, it seems, beats Phil again; at least they are pushing some dirt around the course at High Carolina.
    Bruce Fine says that Balsam Mountain stands out in its appeal to a certain segment of the higher-end demographic who want a home in the Waynesville/Asheville area.
    "We attract primarily family-oriented owners, some with children still at home, who like the range of family programs we offer," Fine told me.  "Some of the little kids visiting their grandparents for the summer, cry when they have to leave."  You can check out the list of amenities at the Balsam Mountain web site.
    Oddly, most of the properties sold in Q1 were to southerners from Georgia, Florida and Texas who are looking for a vacation home in the mountains.  If these folks were smart enough to conserve money during the stock market collapse, and they are betting on the leisure residential market, then maybe there is a glimmer of a hope for a housing market recovery, at least at one end of the market.
    Balsam Mountain and other communities are stoking that redeveloping interest by offering "incentives."  At Balsam, according to Fine, these are of the "customized" variety, designed to fit an individual's lifestyle and financial considerations.  Most developers do not like to advertise discounts on properties; it sends a bad signal to the market and a worse signal to the couple that paid 20% more a few months earlier.  Balsam Mountain does not do that but does "customize" its incentives for the seriously interested.
    "If someone falls in love with our community," Fine told me, "and they really want to live here, we will find out what is important to them and work with that."  Although he would not share any specifics about price reductions on properties, he offered as an example the possibility of picking up one-third of the $75,000 initiation fee for the golf club, and possibly even a year or two of dues for those with no immediate plans to build on their lot (there is no requirement to build within a certain timeframe).
    For current owners who want to purchase additional lots, Fine says some "excellent" arrangements can be made (again, no specifics but enough incentive for a few current owners to make another investment in their community).  Two current owners purchased additional lots in Q1, betting on the market for high-end homes snapping back soon (again, smart and wealthy people betting on the leisure residential housing market with their wallets is not a bad sign).  A successful Waynesville area businessman, according to Fine, also recently bought a lot as an investment and is backing a young local architect to design a small spec home on the site.  The businessman and architect are looking at the spec home as an "entry point," as Fine put it, with an expectation they will spend a year or two getting to know the neighborhood, and then trade up.  The lot was priced at about $450,000 and construction costs in the community typically average $250 per square foot.  The math implies that the local businessman will have around $800,000 in the 1,400 square foot house when all is said and done, not bad in a community where few homes are listed under $1 million.
    Balsam Mountain's competitors threw the bit in Q1 (a bit of equestrian humor there).  Local reports are that The Cliffs at Walnut Cove, Cliffs at High Carolina, and Mountain Air, north of Asheville, sold just a couple of properties each.  Although dirt is being pushed around the site of the Tiger Woods golf course at High Carolina, it will be 2011 at the earliest before Tiger inaugurates the layout.  And another sign of Balsam's relative health that Fine points to is the total number of resale properties among the total sold.  He says Balsam Mountain's 15% is way better than the aforementioned communities.
    Balsam's Q1 performance says something also about the importance of choosing a community as much for its developer as for the real estate, golf course and other amenities.  It reconfirms that a savvy developer with experience and creative marketing skills can survive and even thrive when others struggle.  Balsam Mountain's developer, Chaffin and Light, did not follow the common wisdom of large-scale developments that says if you build it, it must be big.  For example, there is no minimum requirement for the size of a home at Balsam Mountain.  If you want to pay $600,000 for a site with gorgeous mountain views, and then build a 1,500 square foot cottage, go ahead -- the lots are big enough and the vegetation thick enough that you will hardly see your neighbor's home (but you will see the distant mountains).  The no-limit on size -- other communities have requirements that begin at 2,800 square foot minimums -- encourages purchasers to start cottage-small at Balsam Mountain, if they want, and then move up in size (and up the mountain) later on.  Or not.
    Price points at Balsam Mountain are not skimpy, but compared with, say, The Cliffs at Walnut Cove, they may seem like a bargain to those whose net worth suffered just a glancing blow in the market collapse.  Fine said someone looking for a nice-sized home on a two-acre piece of property with excellent mountain views will pay about $1 million at Balsam.  That describes a typical $1.5 million+ home at Walnut Cove, although most golfers, I suspect, will prefer the Nicklaus layout at Walnut Cove to the Palmer layout at Balsam Mountain (see below).  
    For those who want to just dip their small toe into Balsam Mountain, one of the 40 timeshares in the units adjacent to the community's mountain lodge is "a great entry point" (there's that term again).  Priced at just $250,000, they offer the owner a stay of 12 weeks per year -- two weeks per season and another four weeks on a rotational basis with other owners.  I walked through one of the units when I visited; they are a little small (one and two bedrooms) but very comfortable; best of all, they are just a couple of strides to the rustic and warm lodge where you can sit by the fireplace, look out across the mountains and have a leisurely meal or drink.  There are 16 timeshares currently available, one a resale priced at just $235,000.  This is another sign of Chaffin & Light's creativity -- a community with a median home price above $1 million that offers some folks a tasting menu for a couple hundred thousand.
    Fine says the Arnold Palmer Signature Course, which plays at altitudes above 3,000 feet, was never designed to be the central amenity in the community, although it does command some of the best views.  Arnie's course definitely appeals to, shall we say, the adventurous golfer.  When I played it last summer, on my own, I lost a dozen golf balls. (I'm an 11 handicap and was having a bad day.)  It was tough going, with many blind shots and some in plain view that made my knees quiver a bit.  That said, the mountain vistas from the course are second to none, and after a few rounds, I think I could grow to feel considerably more comfortable off the tee -- as long as I chose the right tee box. (Read my original review by clicking here.)
    Although the golf course they built at Balsam may be high on drama, Chaffin & Light's approach to marketing is almost sotto voce, relying on a relatively few discreet ads and word of mouth rather than glitzy launches and overstated performance figures.  To be honest, I was a little skeptical about their Q1 press release, mindful that hype is the coin of the realm for many upscale communities; and that The Cliffs had announced last fall that Tiger and High Carolina had generated $40 million in sales, yet a local reporter could only find $25 million in property transfer records when he looked a few weeks ago.
    But after talking with Bruce Fine and considering Chaffin & Light's history of success and a straightforward approach, I'm a believer.  Like the developer's Low Country South Carolina communities of Callawassie Island and Spring Island, which I visited a few weeks ago, Chaffin & Light has built Balsam Mountain Preserve for the comfort of its residents and, as a side benefit, the endurance of a lousy economy.  

Balsam Mountain Preserve is backed by a finished Arnold Palmer golf course, an established developer, and a good first quarter of sales.

    Draw a circle about a 45-minute drive around Asheville, NC, and you find some of the nation's most breathtaking home sites and golf course views, with prices that may also take your breath away.  The current economy, however, is letting the air out of many ambitious projects once considered bullet proof.  Even the customarily bullish high priest of high-end mountain development, Jim Anthony, according to a local newspaper account, appears concerned about the sales trends at his vaunted Cliffs Communities, and especially at High Carolina, where he has paid Tiger Woods a design fee some reports peg at $20 million.
    "In January and February this year, we were really hit hard," Anthony told John Boyle of the Asheville Citizen-Times in an article published yesterday.  "In March we've seen a little bit of a turn."
    A little bit of a turn may not be enough for other communities, certainly not Grey Rock in the Lake Lure area.  The community did not have a golf

course but it did feature home sites priced in the neighborhood of $400,000.  Only one home had been built by the time the developer, Land Resource, closed up shop in 2008, leaving 400 purchasers with a lot of dirt and none of the promised amenities.  Then, shortly after, Credit Suisse called in its $675 million loan to Ginn Resorts, forcing its eponymous developer to start shedding properties faster than you could say Gypsy Rose Lee.  One of them, the ambitious 6,000-acre Laurelmor in Blowing Rock, was sold to the same folks who developed the solid Reynolds Plantation in Georgia, and for pennies on the dollar.  Reynolds plans to start selling properties and restart work on Laurelmor's Tom Kite golf course later this year.
    Other golf communities in the Carolina mountains have slowed their progress considerably.  River Rock's Phil Mickelson course, his first mountain design, has been delayed to at least 2012, two years beyond its originally planned opening date.  The community, as of the beginning of the year, had only two homes in construction, one that was going to be leased back to the developers.  At Seven Falls Golf & River Club, near Hendersonville, developers insist the Arnold Palmer course will be finished in August, despite the filing of liens against Seven Falls by some of its contractors.  The largest lien, for $2.5 million, was by the contractor engaged to build the golf course.
    Not every high-end community in the mountains is operating on the edge of a cliff.  Balsam Mountain Preserve, near Waynesville, had the good sense of timing to complete its dramatic Arnold Palmer golf course and most of its amenities before the economy hit the skids.  Since its opening in 2001, Balsam Mountain has sold more than 2/3 of its 350 home sites.  It helps also that the community's developers, Chaffin & Light, have a solid track record of successful projects, including Spring Island and Callawassie in the Low Country of South Carolina, two communities that impressed me during a visit a few weeks ago.  According to Balsam Mountain's head of sales, who spoke with the Citizen-Times' John Boyle, the community had an excellent first quarter.   

    For those contemplating the purchase of any golf community home in the current climate, the deep pockets and track record of a developer has never been more important.  There are plenty of bargains available at the moment, in the mountains and everywhere else, but avoid any communities with unproven developers and un-constructed amenities.  And take everything a developer says with a grain of salt.  After a splashy event that featured Tiger Woods last November, Cliffs developer Anthony announced that the High Carolina project had commitments for $40 million in property sales.  Five months later, land transfer records, according to the Asheville Citizen-Times, indicate $25 million had been sold.