Mountain real estate at end of peak

    Transylvania is a county in the mountains of North Carolina, not Dracula's home, but realtors there could be excused for thinking some evil entity is sucking the blood from their market.  During the early months of the national housing market crisis, sales volumes and prices had remained fairly steady in the Carolina mountains, driven by considerable wealth coming out of Atlanta and Charlotte in search of second homes, as well as all those Floridians fed up with hot summers and clogged roadways.
    Atlanta and Charlotte are major financial centers, and the free spending days of most executives are over, at least for now.  They have stopped buying homes along the coast and in the mountains.  It is clear from the comments of western North Carolina realtors and some recently published data that the mountains are losing their sugar daddies.  Sales are off more than 40% in Transylvania County from August 2007 to August 2008.  September data should be out soon and may look worse given that last September was a big month.  
    Across price ranges, no category is immune, but the most expensive properties seem to be taking an especially big hit.  For example, just four homes have sold in the last three months at $900,000 or more, uncharacteristic for this part of the mountains.  And evidence is emerging that foreclosures are starting to infect the top of the market too.
    "I have seen a few very high-end foreclosures lately," says Carol Clay, a Brevard realtor who publishes an interesting blog about mountain real estate [click here].  "I wouldn't call it a stampede, but they're there."  
    Carol has a foreclosure listing for a 5.6-acre tract of land in the posh Bald Rock community in Cashiers.  At $249,900, or $44,000 an acre, it is priced below the customary $50,000 per acre price for lots in Bald Rock.  Yet in this skittish market, it is hard to imagine that a 12% discount is going to motivate any buyers, especially when they can get a 40% discount on many blue chip stocks (and a decent divided to boot).  
    At this point, an investor would be hard pressed to choose among an unimproved piece of property, 10,000 shares of General Electric or some $250,000 FDIC insured bank account.  The banks holding the paper are going to have to do considerably better.  Isn't that an understatement for these times?