NEW YORK – Aug. 5, 2009 – Fear of overpaying for property is common these days, especially in places where prices continue to be unstable. If you encounter potential buyers afraid to commit based on a fear that they’ll pay too much, point out these factors:

• Waiting for the right time can be expensive. Some buyers would have more equity today, despite falling prices, if they had bought when they first considered it instead of continuing to pay rent.
• Financing is fickle. Some people who were highly qualified last year can’t find financing this year because the credit market has tightened or their personal financial situation now makes them an undesirable borrower.
• Interest rates are headed up. If prices decline by another 10 percent but interest rates increase by 1 percentage point, the monthly payment will be the same.

Source: The Wall Street Journal, Douglas Heddings (07/27/2009)

OPPORTUNITY IS KNOCKING

According to real estate and investment experts we are entering a period with unprecedented investment opportunities.  Many of these will never be available again in our lifetime.  Do you hear opportunity knocking? Interestingly, even though these opportunities are available, few act upon them.

Oddly enough, when the real estate markets were booming and real estate prices were at an all time high, everyone thought they heard the knocking of opportunity.  It seemed that everyone was buying real estate.  High prices were no deterrent.  Now, with the prices for prime property declining and the backlog of property making  for a wider selection than ever before, everyone seems reluctant to take the plunge.

We would suggest that perhaps it is time to look at the situation rationally.  Consider your personal situation without regards to what you hear from the harbingers of doom and gloom.

Seek out a real estate professional and begin to look at the tremendous number of properties available in this area. Select those that impress you most, compare each and have the courage to make reasonable offers.  If you have ever considered owning property in the Cashiers/Highlands Plateau, this is the time to act.  Don’t look back a few years from now and say,  “If only I had bought that home in 2009!”  Of course, we hope you will look at the fantastic homes and home sites in Stonefly before you decide.

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I had an interesting conversation with a Florida real estate broker who stopped by one of our furnished model homes in Stonefly this past weekend. He asked me if I knew of any real estate bargains in the Cashiers Highlands area. It was amazing to me that this real estate professional, who is quite aware of the depressed real estate market in Florida, would expect to find a similar depressed real estate market here in the mountains.  I thought it was apparent to most people, especially those in the trade, that real estate prices and values are much different depending upon where you live in the co

Here are some of the reasons prices remain high in the mountains of the Cashiers Highlands Plateau while they have dropped in areas such as Florida:

SUPPLY AND DEMAND

In Florida, areas of the state experienced building at an accelerated pace over the last number of years. Houses were going up as fast as the builders could build them. Prices were skyrocketing and, because buyers could easily get a mortgage with little or no money down, sales were soaring. Builders were not only building homes that were pre-sold, they were also building speculative houses. The market was also flooded with a vast number of real estate investors and speculators who were buying houses and planning to cash in as the market climbed. When the real estate bubble burst builders could not sell these spec houses. Many speculators and investors either did not close on houses they planned to buy or they let those they had purchased at high prices go back to the bank.  Houses that were sold for small down payments went into foreclosure when the market dropped and owners could not make the payments. This has caused the market to be flooded with an oversupply of houses and so the prices have dropped dramatically.

In the Cashiers Highlands Plateau there was no overbuilding. Building continued at a steady pace but there were few spec houses on the market at any given time because the majority of builders already had their homes sold before construction was started. In addition, most of the homes were purchased by people who would be living in their homes and who paid cash for the property. Few buyers in this area are speculators.  Most people purchasing homes in Cashiers or Highlands are full or part-time residents.

BUILDING COSTS

Building costs in Florida are considerably lower than the cost of construction in the mountains. A foundation for a home on a flat lot in Florida costs much less than a foundation for a similarly sized home in the mountains. The engineering of a foundation that rests on the side of a mountain and must often be built on solid rock can be very costly. The costs of materials are greater in the mountains too. For instance, a concrete truck is only able to haul half a load up the mountain roads because the concrete would run out the back of the mixer if they were to go up the mountains with a full load. This requires twice as many trips to deliver the same amount of concrete so the cost of this one item alone is much greater in the mountains. Often it takes weeks to get the needed building materials up the mountain because delivery trucks don’t take loads daily. Sometimes access to a building site is so difficult that only a few trucks can get to the site on any given day.

LABOR COSTS AND AVAILABLILITY

In Florida it is fairly easy to get reliable carpenters, roofers, stone masons, tile setters, electricians and plumbers. There are a large number of companies to choose from and bidding can be very competitive. In the mountains there are not as many skilled workmen available. Many must travel from larger cities such as Clayton, GA, Greenville, SC, Asheville, Franklin and Brevard, NC.  They need to charge more for their travel time, fuel and sometimes even overnight accommodations. This adds more to the cost of a home. It also adds to the time it will take to build a home since workmen will not spend as long on the job due to the time they must spend on the road to and from the job.

FEWER GOOD BUILDING SITES

Florida has an almost inexhaustible supply of home sites. When one golf course is sold out another is developed just down the road. In the mountains it is not so easy to find good building sites. The Cashiers Highlands Plateau has a very large area of land that is devoted to the National Forest System. This makes for a pristine environment but it also makes it harder to find a good place to build a home. Many times home sites are far from the town center and are quite remote with winding unpaved roads. Stonefly is one of only a few developments with paved roadways and all underground utilities. We are fortunate to be only 1.2 miles from the Cashiers crossroads. Sometimes first time home buyers in the mountains make the mistake of looking for a home site at the top of a mountain. A nice view but this can mean a drive of 20 or 30 minutes to get to the grocery or hardware store for necessities.

These are just a few of the many reasons a home in the Cashiers Highlands Plateau is not as likely to be affected by outside influences causing other real estate markets in the country to decline.

11 August 2008  by Larry Nellans

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If you are planning to hike on Whiteside Mountain in the Cashiers Highlands Plateau near Stonefly, be sure to take note of the variety of wildflowers and different plant communities growing on the slopes.  The variety of soils, light, and moisture on the mountain create a mixture of plant habitats.

The north-facing, moist slopes have a northern hardwood forest, where you can walk under  yellow and black birch, Canadian hemlock, and Fraser magnolia trees.  Scattered in the forest understory are witch hazel, minnie bush, and wild raisin shrubs. On the forest floor, you can discover speckled wood-lily, white snakeroot, and Curtis’s goldenrod. At the summit is an old-growth northern red oak forest. Notice the shapes of the red oak.  Strong winds and ice storms shaped the trees into twisted forms. Growing in this forest understory, you will find serviceberry, false Solomon’s-seal, wild sarsaparilla, whorled aster, and white wood aster.

Across the southern slopes is a heath bald shrub community. Carolina rhododendron dominates these clusters of shrubs, which includes highly fragrant smooth clammy azalea.  Blanketing the southern slopes is a fragile rock-face community. Mats of spike moss and some wild flowers such as pale corydalis, dwarf dandelion, gray beard-tongue, and granitic-dome goldenrod carpet the mountain face.

The abundance of  flora is another reason the area around Stonefly in the Cashiers Highlands Plateau brings visitors from all over the country.  Many who come to enjoy the area decide to stay and make this garden paradise their home.

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2007 United Van Lines Migration Study

For the past 31 years United Van Lines has conducted a study to track the moving patterns of its customers over a 12 month period.  In 2007 the accounting was based on 212,917 households handled by United in the 48 contiguous states and Washington, D.C.  United classifies each state in one of three categories HIGH INBOUND, 55% or more moves going into a state, HIGH OUTBOUND, 55% or more of moves going out of a state, and BALANCED, about the same moving in and out of a state.

The South emerged as a top migration spot in 2007, with North Carolina coming in as the top destination with 61.6% HIGH INBOUND.

To read more about the United Van Lines study visit:

http://www.unitedvanlines.com/mover/united-newsroom/press-releases/2008/2007-united-van-lines-migration-study.htm

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Have you considered buying Real Estate in Your IRA?

Are stock market woes preventing you from building wealth in your retirement account? If so, you might be interested in a small, but growing, trend among individual retirement account owners investing their retirement funds in real estate.

How It Works

If you are interested in using tax-deferred funds to purchase property, you’ll need to locate an independent IRA custodian that allows real estate investments and work with that company to set up an IRA account. Most banks and brokerage companies—the most common IRA account options—limit your choices to certificates of deposit, stocks, mutual funds, annuities, and similar financial instruments. But Section 408 of the Internal Revenue Code permits individuals to purchase land, commercial property, condominiums, residential property, trust deeds, or real estate contracts with funds held in many common forms of IRAs, including a traditional IRA, a Roth IRA , and a Simplified Employee Pension plan, or SEP-IRA.

To find a custodian that specializes in real estate, search under terms such as “real estate IRA” or “self-directed IRA.” This latter term was coined by the financial industry in the 1980s to distinguish the self-directed IRA from other IRAs that focus on stocks and bonds. The IRA account holder can’t serve as the custodian of his or her own account. However, it’s important to select a custodian knowledgeable about the types of investment you’re interested in, because the custodian holds title to the real estate. Do your homework, and understand what you’re

getting into.  Fees can vary widely among custodians, as can the flexibility of the services provided for account holders. If the custodian holds real estate on your behalf, but does not service it (collect the rent, etc.), you may have to contract with other providers.  Just be sure that all rents are paid into the IRA and that all taxes are paid by the IRA.

Purchasing the Property

Most IRA custodians that hold real estate will usually allow you to purchase raw or vacant land, residential properties, or commercial buildings for your portfolio. In addition, some custodians may permit foreign property or leveraged property.  Since buying a property may require more funds than you currently have available in your IRA, you also can have your IRA purchase an interest in the property in conjunction with other individuals, such as a spouse, business associate, or friend. Also keep in mind that if the property is leveraged, the debt must be a non-recourse promissory note.

Unfortunately, Internal Revenue Service regulations will not let you use the real estate owned by your IRA as your personal residence or vacation home. Nor can your business lease space in your IRA-held property. The underlying premise for any real estate investment purchased with IRA funds is that you can’t have any personal use or benefit of the property. To do so may cost you plenty in taxes and penalties.  There are a few other IRS limitations as well. You cannot place a real estate property that you already own into your IRA. Your spouse, your parents, or your children also couldn’t have owned the property before it was purchased by your IRA. Property owned by siblings may be allowed, since the Internal Revenue Code (section 4975) specifies that only “lineal descendents” be disqualified.

Once you’ve chosen a property, your IRA custodian—not you personally—must actually purchase it. The title will reflect the name of your IRA custodian for your benefit (such as  Colonial Trust Co., Custodian FBO John Doe IRA).  In addition, if you put up earnest money with your personal funds, you’ll need to make sure you include that amount in the total due so that the title company can reimburse you upon closing.

Operating an IRA-held Property

Because all property expenses, including taxes, insurance, and repairs, must be paid from funds in your IRA, you’ll need liquid funds available in your account. Of course, all income generated from the property will be deposited in your IRA account so you can use that money to cover your costs. You also can make annual contributions within federal guidelines. It is possible to sell properties while they are held by your IRA, so long as the purchaser is not a family member. Once a deal closes, your IRA account now holds the cash proceeds—ready for you to make your next investment. An alternative is to sell an IRA-held property with seller financing so that all payments made by thebuyers are paid to the IRA.

Distributing Your Property

You can withdraw real estate from your IRA and use it as a residence or second home when you reach retirement age (age 59½ or older for a penalty-free withdrawal). At that time, you can elect either to have the IRA sell the property or take an in-kind distribution of the property.  Under that arrangement, your IRA custodian assigns the title to the property to you. You will then have to pay income taxes on the current value of the property if it’s been held in a traditional IRA. If the property was held in a Roth IRA, you won’t owe taxes at distribution. This makes a Roth IRA extremely attractive if you anticipate that your real estate investments will appreciate over time.  Whether your retirement strategy is to hold properties or buy and sell for gain, real estate investing through your IRA can yield extraordinary returns toward your future retirement.  Especially when many real estate properties are  selling for far below replacement cost at the present time.

For More Information visit: www.stoneflync.com

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Do you have a question about real estate in general or a specific question that relates to Stonefly or Cashiers real estate? Here is your opportunity to get the answer. Just ask your question and I will answer based upon my 45 years of experience in the real estate business.

Larry Nellans is the owner and developer of Stonefly Development Corporation. Mr. Nellans is a life long Realtor from Fort Myers, Florida and Cashiers, North Carolina. He has been in the real estate business for over 45 years with extensive experience in both residential and commercial development and sales throughout the Midwest and in Florida.

A native Hoosier, he is a graduate of Indiana University with a major in real estate and has earned the professional designations of GRI, CRB, CCIM, and CRS from the National Association of Realtors, and was awarded Realtor of the Year by local, state and national associations of Realtors.

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Like wild geese, human ’snowbirds’ fly southward every year to avoid the travails of northern winters. Over a lifetime, this seasonal ritual becomes a welcome habit. When the day arrives for snowbirds to fly south for retirement, their determination to never shovel snow, chip ice, wear heavy clothing or defrost plumbing again compels them to head south… and stay there forever.

But lately, an unexpected blip has appeared on the demographic radar of experts who track retirement consumer trends. Snowbirds have begun to defy the laws of nature, reverse-migrating against conventional trade winds in their quest for the ideal life. Rather than journeying south, retirees are flocking to the foothills, lakes and mountains of the Blue Ridge and Smoky Mountains in ever-increasing numbers. The real estate industry has branded homebuyers who are migrating south to north with the pet name ‘half-backs’.

Developers in the mountains and foothills of the Carolinas report that their forests are teeming with prospective buyers, many of whom have fled the southeastern coast. Western North Carolina represent a natural geographic compromise for snowbirds who seek relief from harsh winters but aren’t quite willing to deal with the near-tropical extremes of Florida.” The same applies to halfbacks from the deep South. The Carolina mountains are an acceptable midpoint, climate-wise, between long, oppressive summers and driving on icy roads in a blizzard.

Other buyers who don’t fit the definition of a true halfback maintain a condo in the big city as their second home close to where they work and keep their primary home in the mountains. They feel it offers a better quality of life, better schools, cleaner air and less crime.

It seems a lot of home buyers these days are dissatisfied with cold weather up north, hot weather down south and blizzards, floods and hurricanes anywhere. They are yearning for a port in a storm, a personal hermitage or sanctuary. For many, the journey will lead to a mountain lake, stream, river or clearing nestled in the woods. If our happiest memories growing up were summer vacations at camp or with the family at a mountain retreat, chances are we will gravitate toward those spots when vacationing or retiring as an adult. We want our kids and grandchildren to experience and share the same happiness we enjoyed when you were young.

Source: Living Southern Style Magazine Fall 2007 issue by Robert C. Shafer

Cashiers, North Carolina and Stonefly offer all of the things we come to the mountains to enjoy.  While secluded and private it is by no means isolated and still offers all the amenities that make our lives so rich and rewarding. A home in Stonefly could be perfect fo

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COMBINE THE DRASTIC granite drop-offs of the Blue Ridge escarpment with more than 80 inches of rain a year and something dramatic is bound to happen. Around the town of Cashiers (pronounced CASH-ers), perched at 3,500 feet on the Eastern Continental Divide, the jackpot shows up in the form of waterfalls everything from tiny cliff side seeps to 400-foot-plus cataracts that roar into deep gorges. The downtown is little more than a crossroads, the junction of U.S. 64 and North Carolina 107, and a mile or so radius of antique shops, high-end restaurants, and second-home clusters discreetly tucked into the woods.

OUTDOORS: Hikers can go short, on spur trails to waterfall lookouts, or take on longer segments of the Foothills Trail or the Chattooga River Trail. Fly fishers and kayakers pilgrimage to the Nantahala, Ocoee, and Chattooga rivers. Panthertown Valley, a 6,700-acre wilderness area, is the closest fattire-trail web, and the Tsali Recreation Area, a one-and-a-half-hour drive west, is an off-roader’s dream, with more than 40 miles of epic single track. The thousand-foot cliffs of Whiteside Mountain provide the kind of hairy, multi-pitch, huge-exposure climbs that would almost make you swear someone had trucked the place out from Yosemite.

Outside Magazine, August 2004

Outside Online, www.outside.away

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The Flame Azalea is one of the showiest shrubs in the Blue Ridge Mountains and in the Cashiers Highlands Plateau of North Carolina. Many of the native plans can be seen in and around Stonefly. The colors range from yellow to red, but the brilliant orange is predominant. The mountains in the eastern part of the United States are among the oldest ranges on the earth, and the variety of native azaleas that grow here are ancient as well. These plants have been quietly growing in our forests while the earth has slowly evolved around them. They have survived earthquakes and asteroids, dinosaurs and ice ages. Fossil records show that certain species in the genus Rhododendron have existed essentially unchanged for at least 50 million years. Today travelers driving through the mountains in the Cashiers Highlands Plateau in the spring can spot the beautiful plants growing right along the roadside.

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