Business

THE BIG BOOM: More than 4,000 dwellings are in the pipeline

Universal at Lakewood apartment complex behind Sam's Club is approved for 291 units.

By Bill Moss & Amy B. McCraw, Published: July 20, 2022

First of two parts

A hot housing market, the reshaping of the workforce since the pandemic arrived in March 2020 and a shortage of inventory is driving a boom in home construction in Henderson County.

As newcomers stream into the county from all directions, the construction industry is struggling to keep up. Homes, apartments and condos are on the way — hundreds, if those in the pipeline get built — most of them in Hendersonville. The Lightning’s special report on the real estate and construction market showed that:
• Since 2018 Henderson County has processed subdivision requests resulting in 1,836 residential lots. Most are minor subdivisions, carving 2-4 lots out of a single parcel. The Tap Root dairy development is by far the largest; it’s approved for 699 home lots or townhomes.
• Fletcher currently has 464 approved dwellings and Mills River 283, including some that are turning French Broad Valley farmland into high-end subdivisions filled with million-dollar homes.
• Hendersonville potentially will see the biggest boom of all. Because the city requires developments that want sewer service to be annex into the municipal boundaries, subdivisions, apartments complexes and condo developments are clustering around the city, especially on U.S. 64 East, South Allen Road and on Tracy Grove Road. The total number of dwellings approved on paper in the city is an eyebrow raising number: 2,416.
• Although they’re smaller, have stricter zoning and less buildable land, Flat Rock and Laurel Park are seeing buyers snap up available lots for new construction. “On the mountain itself, we’ve had more development in the last couple of years than in the last couple of decades,” Laurel Park Mayor Carey O’Cain says.

As for sales of existing and new homes, those continue to be the strongest real estate agents have seen since at least the early 2000s. Despite some cooling from its red hot peak, the market is “still very strong,” says Steve Dozier, a real estate agent with Beverly Hanks. “Average days on market is something like two weeks or less. Prices are not seeing any downward adjustment yet that I can see. I do think we’ll have a slight adjustment towards the end of the year but I don’t see it falling off at all. I think we’ll still have increases but it’ll be at a little slower pace than what they have been.
“Last year Henderson County went up a little over 24 percent. I think this year you’ll see a 15-18 percent increase over the previous year. And then possibly in ‘23, we might see anywhere from nine to 12 percent.”

Buyers ‘come from all over’

Buyers are “coming from all over — California, New York, New Jersey, Florida,” Dozier says.
Mark Biberdorf, Fletcher’s town manager, has observed that move-ins to Fletcher are getting younger because the pandemic reoriented many professions to allow employees and contractors to work from anywhere.
“Who wouldn’t want to live here if you don’t physically have to be in Detroit or some other place that’s too cold,” Biberdorf says.
Dave Noyes, a broker with EXP Realty who is president-elect Hendersonville Board of Realtors, says inventory has increased from a month’s supply to a month and a half. A six month supply is considered a balanced market. “The highest months of supply I have seen in Henderson County was 17½ months in September of 2010,” Noyes says.
The average closing in June was 101.1 percent of asking price, up seven-tenths of a percent from June 2021 but down from May’s average, a stunning 103.1 percent.
“I think we’re seeing indications that the market is starting to normalize,” Noyes says. “Imagine you’re on an interstate and speed limit is 65 miles an hour but everybody’s going 100 miles an hour. That was last year. I think this year we’ve slowed down to about 80 miles an hour.”
Real estate agents and elected officials lament that few of the homes — existing or in the construction pipeline — are affordable for a household made up of a schoolteacher and a police officer.
“Firemen, policemen and nurses and people like that who work in our area, and a lot of them don’t live in our area and I would like to see more of them be able to live in our area,” says County Commissioner Rebecca McCall. “And I think that the more dense projects like the apartments, the townhouses and things like that belong in the municipalities just because of access to resources that you can walk to, and it just makes sense with the infrastructure of sewer and water that those types of housing belong in those areas.”
Elected leaders and real estate agents note that it’s a near certainty that only a portion of the residential construction currently approved will ultimately be built. A slowdown in demand, shortage of labor and other factors could all cause the developers to drop or downsize projects. Just as the Great Recession starting in 2008 snapped a lid on housing starts, an economic slowdown over the next year or two could cool the market again. But Dozier, who sees trends not only in his real estate sales day job but as chair of the Henderson County Planning Board, says construction needs to keep pace.
“No, I don’t think it is” more than needed, he says of the total number of dwellings with zoning approval. “My biggest concern right now is infrastructure. All these people that have moved here and continue to move here because Henderson County and Hendersonville have definitely been discovered now.”
While he expects the market to become gradually more balanced, he does not see a bust like 2008.
“I just wish we could get the news to stop talking about recession because I don’t see anything close to what we had in 2008,” he says. “I think we will have an adjustment in pricing and a slowdown in the pace but it’s not going to be like 2008 when late 2007, early 2008, when we had a two-year supply of homes on the market. Now we’ve basically got a month and a quarter. We don’t have the same issues that we had back then.”

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Next week, we take a closer look at the potential housing construction boom in Hendersonville and its impact on traffic, development in unincorporated Henderson County and what’s happening in Flat Rock.