Sunday, December 23, 2007

Western North Carolina Mountain Real Estate

Swain County Landslide Property Damage
Steep, high excavations in debris fan deposits can be unstable.
This cut slope failed during the May 5-7 2003 rains in Swain
County. Although the cabin remained intact, the failed debris
pushed it 3-5 feet off its foundation.

photos compliments North Carolina Geological Survey

The real estate in Western North Carolina is offered as safe and secure property, but in reality this mountain slope acreage is dangerous and financially risky. How risky? The state issues landslide advisories whenever excessive rain is forecast for the western counties. Investors should note that approximately 75% of the salable land in Western North Carolina is located on more than a 15 degree slope and state geologists warn that this is the threshold for landslide activity.

After the wide-spread disastrous slope failures of September 2004 and in advance of the "Is it Safe to Build Here" regional landslide stability study, real estate companies purchased thousands of acres throughout Western North Carolina. This preemptive business strategy was opportune. Once developers have been granted permits for mountain slope subdivisions they are "grandfathered in" or in other words exempt from changes in regulations. Even when landslide mapping shows the probability of extreme slope failures, developers are allowed to continue building because they have "vested rights" in the projects.

Western North Carolina investors should proceed with caution for there are no protections afforded the purchasers of the region's high risk real estate. If the sale of this volatile land were covered under the Securities Exchange Act, real property investors would be informed in a prospectus of Western North Carolina's landslide designation, the possibility of significant financial loss, and the absence of insurance. The companies selling this questionable and potentially worthless real estate would be required to provide investors with a transparent description of their business activities.

Even though legislative findings and geologic investigations have proven that Western North Carolina landslides are ever present threats to lives and property, Realtors are not required to divulge this pertinent information. Until the state assumes responsibility for safe slope construction standards and Realtors are required to disclose material risk, investors should be skeptical of all mountain property that has not been certified by a state licensed geologist.

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