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Rental market hot in Asheville area

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7/11/2011 - Rental market hot in Asheville area
by Jon Ostendorff

Changes in economy are always fluid, and the housing market adjusts to accommodate.  Whether you are buying, selling or investing, Asheville and Western North Carolina are great areas to begin thinking about the future - will you retire to a home that you purchase here and use as a rental until you do?  Or will you make the downsizing move now for the benefits of the area in general?  The options for all are there, and there are different markets to support many different decisions.

 

                      ASHEVILLE -- Housing in Buncombe County changed dramatically over the last decade with huge growth in second homes and an increase in rental housing five times the national average.

 The two statistics, from newly released 2010 census data, point to diverging trends where affluent people were increasingly attracted to the area and the working class moved away from owning homes, according to housing experts.

"To me, that is the legacy of Asheville," said Cindy Visnich Weeks, manager of community investments at Mountain Housing Opportunities, a nonprofit focused on affordable housing.

"If you go all the way back to the 1800s, we were an area where the wealthy plantation owners came for the summer and the local people were the servants for these people for the summer," she said.

The Great Recession has had much to do with the spike in rentals.

Nationally, 34.9 percent of occupied homes were rented in 2010, compared with 33.8 percent in 2000, according to census data.

The renter market remained stable from 1990 to 2006, said Daniel McCue, senior research analyst at Harvard University's Joint Center for Housing Studies.

Since 2006, when housing prices peaked, the number of renter households nationally has grown an average of 692,000 a year. The number of owner households has fallen an average of 201,000 a year.

The total number of housing units in Buncombe County increased 17 percent from around 85,776 dwellings in 2000 to 100,412 last year, according to 2010 census data released last week.

Much of the increase in second-home owners likely came at the beginning of the decade when the Asheville area was touted as one of the best places in the nation to retire.

High-end mountainside developments and golf course subdivisions started popping up across the region though many have stalled as investor funds dried up and baby boomers scaled back retirement plans.

Tom Leslie, owner of Leslie & Associates, which manages 100 single-family homes and 900 apartments in the Asheville area, described the rental market as a cycle.

Homes that were once for sale, he said, are increasingly becoming rentals as owners who have left the area for jobs give up on waiting for a buyer.

The buyers are fewer than in years past, he said, because of limited access to loans and a collective wait for the real estate market to settle.

"Everything is somewhat frozen," he said.

That's been good for those in the property management business.

"We are slammed," said Kimberly Evans, owner of Alpha Real Estate in Asheville. "We are busier than we ever have been. I am actively seeking new accounts because I don't have enough inventories for people who are calling my office on a daily basis."

Evans started her business in 2003 catering to real estate investors. She considered them long-term customers and steered away from owners of single homes for sale only looking for tenants in the short term.

Today, her business model has flipped. Investors have backed away from professional property managers to save money, she said, and homeowners in need of tenants have become long-term customers because of the down economy.

"I feel like this is the new reality," she said.

Rents also have been rising since spring, she said, as more people look for housing.

A two-bedroom, one bath bungalow in north-central Asheville that had once been $775 a month could fetch $900 now.

The time it takes to find a tenant used to be two months at most, she said. Today it's two weeks.

Those figures have a downside.

"The sad part of it, honestly, is the people who call our office and we can't help," Evans said.

Weeks said there is not enough affordable rental housing, a trend also noted on the national level in the Harvard report released in April.

Since the mid-'90s, more than 700,000 rentals with federal subsidies were lost through demolition or conversion into market-rate homes, according to the study.

About 12 percent of low-cost rentals were demolished or permanently lost between 1999 and 2009, according to the study.

Weeks praised Buncombe County, city and state leaders for recently wooing Canadian auto parts maker Linamar to the vacant Volvo Construction plant in Skyland.

The company could create as many as 400 jobs paying an average of $39,750 a year.

Better-paying jobs, she said, are a big part of the answer to the affordable housing problem.

"We need to do more of that," she said.

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