Kinga and I are looking to buy a house — sort of. Kinga and I have begun something we expected to start only after a year and a half in the States: we’re looking for a house. Our thinking was based on our likelihood of getting a loan, our lack of any kind of down payment, and initially, our lack of a job or any sense of security. But we’ve been pre-approved at a couple of different places; we have decent jobs, with the promise of it only getting better; and we’re sick and tired of paying several hundred dollars a month for nothing.
Granted, the rent is shockingly low compared to what I was paying in Boston. In 1999, I was paying $850 for a one-bedroom with barely enough room to turn around in. That place is certainly over a grand a month now. We don’t even pay seven hundred for a two-bedroom place. In the summer, when we were looking at the place, I laughed when told that the apartment is spacious but the rent “is a little high.”
The real estate market here is simply going through the roof. It’s tough to find anything under $150,000 that doesn’t need massive renovation. It’s easy to find massive homes:
Two decades ago, million-dollar homes were a rarity in these hills but not anymore. In 2002, Buncombe County had 38 homes with an assessed tax value of $1 million or more. In this year’s revaluation, the number will jump to 484. […]
“It’s just boomed,” Roberts said. “What we’ve noticed is there’s a lot of new construction of those type of homes, with those type of high-end materials: slate roofs, unique woods, specialty tile. The other side of that is that people will take some of the older homes and greatly remodel the entire home or add a whole new wing, and that pushes it over $1 million.”
The luxury housing boom is not news to Ron Olin and his wife, who moved here 12 years ago from Texas. According to the new revaluations, the Olins own the highest-assessed home in Buncombe County, a new, 15,449-square-foot French chateau style house in Biltmore Forest valued at just over $6 million.
Olin, a money manager who loves the Asheville area for its scenic beauty, climate and amenities, has no problem paying his fair share of property taxes to support local government. But one point sticks in his craw.
“Once we’re in the house, maybe it’s worth that much, but we haven’t even moved in yet,” Olin said. “They did an interim assessment in 2005, and we know they raised it a lot.”
The assessed value last year was about $4.6 million, but as the home nears completion it becomes more valuable. With amenities including an indoor swimming pool, an elevator, a hot tub, sauna and seven fireplaces, the price tag keeps rising. (Citizen-Times)
It’s because of people like the Olins that this area is soon going to become so expensive that no one can afford to live here unless they’ve got a six-figure income. Maybe not that bad, but it is fairly ridiculous.
Interest rates are yet another thorn in our side. We think enviously of those who bought homes a couple of years ago when the interest rate was not bearing down on seven percent. My brother-in-law took his home loan in Swiss francs, and pays some ridiculously low percentage – under four, I think. At today’s rate of 6.38%, a loan of $130,000 would generate monthly payments of $808.06. At 4.00%, it would be $620.65, with about 40% of that going to the principal.
And so instead of looking at actual single-family homes, we considered a townhouse or condo. What do you actually own in that? If it’s a townhouse, you might own the land directly under your portion of the building, but nothing else. With condos, you jointly own the land, along with everyone else in the same building. At least it was something like that. I can’t quite recall how our realtor explained it. I’m not really interested in the land, I guess, so I didn’t pay much attention. In the end, we decided that all we’d be doing is changing landlords. And so we’re looking for a moderate “fixer-upper.”
One thing we’ve learned quickly is the sometimes-tragic effect of neighbors on property value. We found a very warm, two-bedroom place with hardwood floors and a nice floor plan that was completely ruined by the neighbor’s lack of any sense of responsibility for the appearance of his house. The yard filled with junk; Christmas lights still hanging; a balding lawn – it was awful.
“These people will never get their asking price because of that,” our realtor said. So you lose money because your neighbor’s a complete slob.
We went to the south of the city where we found a rather nice home just about a mile from Biltmore Forest – Ron Olin’s neighborhood. If there’s somewhere in you don’t have to worry about the neighborhood, you’d think it’s the area less than a mile from the most expensive neighborhood in the whole city.
Wrong.
We pulled into the driveway and new immediately that there was no way we’d even consider the house. The view from the back-bedroom window explains it.