When talking about our local economic conditions, we've heard our neighbors say, "We never experience the highs that metropolitan areas enjoy, nor do we suffer the lows that economic downturns inflict on them."
This has been especially true for our local real estate market.
While our market is showing signs of decline resulting from the "Great Recession," it isn't suffering the catastrophic decline that markets in other areas have experienced. The market, according to local brokers and appraisers, has been weakened; but compared to markets elsewhere, it is still relatively strong.
Realtors are saying that our market is just now beginning to show the effects of the Great Recession. Local realtors suggested that because our market is relatively small compared to large metropolitan areas, the effects of any downturn in the market affects the local market sometime later that others.
And the recovery comes later here than to the other larger markets.
"Over the past 18 months to two years, the markets around here that have been hit the hardest by the recession have been the resort areas - Snowshoe for example," said Beverly Johnson, broker and owner of Johnson Realty. "Those areas, being the secondary home market - vacation homes, etc. - took a bigger hit than we did.
"Single family residential homes have not been affected as badly as the resort market. The recession is, however, starting to move into our area a little bit. We are starting to get more repossessions and foreclosures, but not nearly as many as in the resort areas," Johnson said.
"Oddly enough, the repossessions in the area have not been in any specific price range per se. They range anywhere from $50,000 to $300,000. The higher priced ones could have been because of a job change, but we can't know for sure," she said.
Johnson, who is also an appraiser, stated that she is seeing as much as 50 percent to 75 percent decline in the value of vacation homes in places like Snowshoe, while single-family residences have shown a decline of 10 percent to 15 percent.
"You can buy a condo at Snowshoe, for example, for about 30 cents to 40 cents on the dollar right now," she said. "Those that have the money are buying while the market is low. That market will come back, but it won't come back as quickly as before. I think it will eventually be as strong as it once was as well, but I think what it needs to do is build more slowly than it did with the rapid growth before 2008."
When asked if there is a surplus of single-family homes on the market, she said, "Not really. People are holding off putting their houses on the market to move up or whatever. But once a house comes on the market for what ever reason, unless it's a foreclosure, it does stay on the market a little longer and it takes about 90 days longer to sell it than it did before the market slump began in late 2007 or early 2008. The time a house remains on the market is also dependent on its condition, the inspections required and numerous other reasons."
Johnson said that, in her experience, the commercial real estate market in Elkins has almost died.
"There is nobody (new businesses) coming to Elkins," she said. "Other factors that affect the commercial market, too, are, No. 1, the fact that commercial loans are harder to get than residential loans, and No. 2, as I mentioned earlier, there is nothing coming into the area right now."
Johnson noted that the rental market is very active right now because of all the windmill construction.
Those of us who have been following the real estate market have heard it said recently by the so-called experts that owning a home has become a disadvantage in today's mobile and dynamic job markets. I've heard them say that, in all probability, many of those who have lost their home to foreclosure might have been spared the agony had they been renting rather than owning. I asked Johnson for her view regarding renting versus owning in today's mobile job market society.
"Owning a home is still one of the best investments anyone can have," Johnson said. "Right now, with the market as low as it is, is a good time to buy. Sometimes, though, renting is an advantage because it gives a person the freedom of making job changes easier than if one owns a home. You just can't walk away from a home. You have to stay with the house until it sells - three, six, nine months - whatever it takes. Yes, there's no question that at times it is an advantage to rent."
Assistant broker and sales manager at Coldwell Banker Home Town Realty Amy Schumacher noted that mortgages are now more difficult to secure for the average buyer.
"There are more hoops to jump through creating longer closing times which frustrates both buyers and sellers. Higher credit scores are now required to obtain mortgages as well," she said. "The price of homes is still down, but I think we will see a change for the better in 2011, albeit slowly."
Schumacher differed somewhat in her estimation of how much single-family homes have depreciated during the recession.
"Houses are appraising for much more than what they sell for; the appraisal market hasn't caught up with the decline," she said. "Properties have been selling for anywhere from 20 percent to 40 percent below appraisal."
To give some idea as to how the market has been affected by the recession, let's look as some numbers provided by a local realtor. Listings entered a period of steady decline in 2006. No increase appeared until 2010. Realtors' records show a total of 191 sales in 2006 with a mean value of $110,093, and were on the market an average of 146 days. In 2007, there were 172 sales with a mean value of $108,964, and were on the market for an average of 153 days. In 2008, the area had total sales of 136 units with an average sale value of $109,924, and were on the market for an average of 150 days. In 2009, sales continued to drop with 115 units sold, but the average price per unit increased to $125,309 with an average of 152 days on the market. Last year was mostly unchanged with a total of 118 units sold at an average price of $125,454, and were on the market for an average of 142 day before they sold.
Local brokers' records showed sales totals in the Elkins/Randolph County area for the years 2006 through 2010 were, respectively, $21,027,940; $18,741,939; $14,839,829; $14,410,542; and $14,803,587.
In the commercial market for the same period, seven units sold in 2006 for a total of $1,185,300; in 2007, 10 units sold for a total of $1,178,750; 2008 sales saw 10 units move for a total of $2,396,000. In 2009, only five commercial units sold for a total of $896,900 and in 2010, six units sold for a total of $680,000.
Each realtor I talked to expressed the same need for our economy to grow - jobs. Each suggested that we need more jobs and a more varied job market. They also expressed a need for the area to become more business and entrepreneur friendly with fewer taxes.