Asheville economy down but not out

Through good times and bad, local economic forecaster Tom Tveidt has repeated a simple mantra: Asheville's unique mix of business and industry means the local economy's peaks and valleys never reach too high nor fall too low.

But that hasn't held true for the current recession.

"We're in the low lows this time," Tveidt told about 100 people gathered June 19 for the first Asheville Community Economic Forum in the Asheville Civic Center's banquet hall.

"We have been in a severe recession,” said Tveidt. “We're coming out of that, and we're definitely seeing the beginnings of a turnaround, but we have a long way to go." That assessment was echoed by various speakeres throughout the 90-minute panel presentation and question-and-answer session.

Asheville Mayor Terry Bellamy, who's seeking re-election this year, was master of ceremonies for the forum, which she said was organized to allow key local advisers to update the community on the state of the Asheville economy.

Tveidt, who is director of research at the Asheville Area Chamber of Commerce, focused on employment numbers. The area's economy has lost 8,500 jobs since the recession officially began in December 2007, according to Tveidt — the equivalent of two to three years of growth in the local job market. The number of government and health-care jobs increased, but the broad recession hit Asheville's construction, hospitality, retail and temporary-worker agencies hard, he said. And though unemployment numbers have begun to decline, recovery will be slow, he predicted.

Pam Lewis of AdvantageWest (a public/private economic-development partnership) outlined her agency's various endeavors, from promoting the mountains as a great location for shooting movies and commercials to giving local entrepreneurs a boost. She painted a vibrant picture of manufacturing and small-business development across the mountains.

Assistant County Manager Jon Creighton gave an update on Buncombe County government's financial status. Sales-tax revenue began declining at the start of the current fiscal year last summer, noted Creighton, and property-tax revenues are also down, because property has not been appreciating as fast as it had been. Those drops forced the county to cut some staff positions, institute a hiring freeze and privatize some services, such as child care. All that saved the county about $5.4 million, he said, and with expected federal stimulus money, the county can move ahead without serious cuts in services while keeping the property-tax rate unchanged.

Chief Financial Officer Ben Durant painted a similar picture on the city side. Declines in the two major revenue streams combined with unavoidable increases in expenses such as health care have triggered a salary freeze, reduced overtime and the elimination of 20 full-time city staff positions. Asheville, too, has avoided major service cuts, but the new budget includes only minimal spending on construction projects and a number of user fees will increase.

"I think we may be seeing signs of the bottom of the recession," said Durant, adding, "As we come out of it, it's going to be a slow, gradual climb."

Meanwhile, Asheville Board of Realtors President Kimberly Evans described a slumping Asheville housing market. The average sales price of a home in 2007 — the height of a booming local economy — was $277,842, compared with $237,175 so far this year, she said, and homes are now staying on the market an average of 144 days, compared with 94 days in 2005. The total number of homes sold is off 33 percent from last year, she added.

But while the numbers appear grim, Evans also reported some positive news. Calls to local real-estate agents are picking up, she said, and the number of homes being shown to potential buyers is on the rise.

"The buzz is out there" about Asheville, noted Evans.