At the end of December 2019, unemployment was near historic lows, the stock market was booming, and hardly anyone saw storm clouds on the economic horizon. Then with the revelation that a strange new coronavirus pneumonia had appeared in Wuhan, China, the world watched first in fascination and then in collective horror as each global domino fell. Worldwide fear grew with each new reality beginning in January 2020.

There were suddenly 59 cases in Wuhan. Three U.S. airports started screening for the virus in New York, Los Angeles, and San Francisco. Cases were identified in Thailand and Japan. The first U.S. case was confirmed in Washington state, just two weeks after the first case was reported in Wuhan. By this time, the virus had killed four and infected more than 200 in China. Two days later, 13 more people had died in China and 300 more sickened.

The dominoes continued to fall. By Jan. 23, China made the unprecedented move to quarantine Wuhan’s entire population of 11 million and restrict access to Huanggang, 30 miles to the east. Eighteen million people were affected by the quarantine, but it was still a distant threat to the U.S. It was happening over there.

Just seven days later, the worldwide death toll was at 200 and the virus had made an exponential jump to 9,800 cases. And still the dominoes fell. On Feb. 2, 2020, global air travel is restricted by the U.S., Australia, Germany, Italy and New Zealand. The U.S. declared a public health emergency, just 10 days after President Donald Trump had announced to the nation on CNBC, “We have it totally under control. It’s just one person in China. It’s going to be just fine.”

By late February, the U.S. Centers for Disease Control said that COVID-19 was heading toward pandemic status. Then there was the first U.S. fatality in Kings County, Wash., which by March 3 was identified as the epicenter of U.S. infections.

The dominoes continued to fall. Also by March 3, COVID-19 was confirmed to have reached North Carolina. Someone visited a Washington state long-term care facility and brought it back with them. On March 5, the first U.S. basketball games were canceled for fear of spreading the virus, both games slated to have been played in Seattle.

Meanwhile, New York, with its highly concentrated population, had taken over as the epicenter of U.S. infections. Hospitals were filling up. People were dying. Every day there were new horror stories of suffering and spread of the virus. On April 4, there were 12,274 new cases reported in New York. For the month of April 2020, there were 29,000 more deaths reported than in the same month in 2019, most of them attributed to COVID-19.

And the pandemic dominoes kept falling and falling and falling.

In early March, almost half of 46 passengers tested among the 3,500 passengers on a cruise ship off the California coast tested positive for COVID-19. The same day, a second case was reported in North Carolina, from someone who had traveled to Italy. On March 10, Gov. Roy Cooper declared a state of emergency. A day later, the University of North Carolina suspended in-person classes for all of the UNC system schools. On the same day, the World Health Organization declared that COVID-19 is a pandemic. The next day, the Sun Belt Conference canceled its men’s and women’s basketball tournaments. College sports teams that were already in destination cities where they were to compete were suddenly told all games were canceled and returned home. The NCAA canceled all remaining winter and spring championships, including “March Madness.”

Then, on March 14, Cooper announced the closure of all public schools in North Carolina for at least two weeks. On March 23, he closed all gyms, theatres, salons, and banned groups of more than 50. Four days later he issued a statewide stay-at-home order, which he extended on April 23. On April 24, he said that public schools would not reopen for the remainder of the academic year.

By this time, the state was in lockdown. County and municipal jurisdictions across the state told people elsewhere, “Don’t come here. You are not welcome. We don’t want your virus.”

By early May, small business was reeling. Air travel had ground to a halt. What in normal times were bustling city streets in major cities more closely resembled ghost towns. Unemployment skyrocketed.

It is now one year later. What happened in the meantime? COVID-19 is still a threat, but people are being vaccinated. Infections and deaths are slowing after almost 2.7 million deaths worldwide, according to Johns Hopkins University’s tracking. More than 540,000 of those deaths have been in the U.S., almost double the number of the next highest, Brazil’s 287,000.

In North Carolina, from a February 2020 high approaching 2,000 hospitalizations, today there are less than a thousand people in a hospital, statewide, according to the NC Department of Health and Human Services. As of March 19, there have been 30 COVID-19-related deaths in Watauga County, 20 in Avery County, 40 in Ashe County, and 104 in nearby Wilkes County.

Schools reopened with online, remote learning only an option in most cases, but hybrid models of in-person instruction became the norm.

In short, things are slowly returning to normal, even if we still are compelled or at least feel compelled to wear masks.

When looking at Watauga County and the rest of the High Country, the region got off better than many other areas. Looking back, some might postulate that in some areas, the rural, mountainous, and resort communities of northwestern North Carolina even benefited.

Initially, the situation looked dire because of the regional dependence on tourist trade and the hospitality industry. It is hard to keep housekeepers, maintenance personnel, and front desk clerks employed when the government says a hotel can’t have any customers.

“I recently attended the North Carolina Main Street Conference and got a lot of good information that might be relevant to the ‘One Year Later’ theme,” said Charles Hardin, the chief executive officer of the Blowing Rock Chamber of Commerce. “I didn’t get all of the speakers’ sources, but there was a consensus expectation that a third of small businesses will collapse in the wake of COVID-19. That is probably national in scope, but it got my attention.”

Hardin added that one of the problems at the outset of the pandemic, according to the speakers at the conference, was reflected in a key national statistic: two-thirds of small businesses had no online presence going into the pandemic, even after all the years in which chambers such as Boone and Blowing Rock tried to encourage every business to have some kind of an online platform.

“I suspect that we have a higher percentage that do have an online presence here in the High Country,” said Hardin, “but we still have lots of retailers that don’t. Of course, all of the hotels and restaurants do, but a good number of our retailers don’t — or at least didn’t at the start of the pandemic.

“The risk of not understanding how important an online presence is really was underlined at the start of the pandemic,” Hardin said. “They explained at the conference that online shopping increased more in the first two months of the pandemic than in the previous 10 years combined. That is a huge number. Small retailers were already hurting from the likes of Amazon and other mega-online platforms like Walmart. They were hurting before the pandemic but when the pandemic came it exacerbated the problem. When the pandemic started, people didn’t shop on Main Street. The noise from mouse-clicking was deafening.”

Hardin noted that big retailers such as Macy’s and Neiman-Marcus had filed for bankruptcy protection in 2019, because they were already getting hurt by the online shopping phenomenon, as did the small businesses without an online presence, even in the High Country. With the pandemic, it only got worse.

Zoom, WebEx, and other online meeting platforms had an impact, too, during the pandemic. The embrace of the technology resulted in a shift in business practices that are much more affordable compared to in-person or face-face meetings and negotiations.

“One of the speakers at the Main Street Conference,” Hardin said, “said he expects 20 to 30 percent of business travel to go away, permanently, because business large and small are using online meeting platforms with which to engage other employees, as well as customers.

“In Blowing Rock, as well as in much of the High Country,” said Hardin, “we don’t have a lot of business travel. Most of ours is leisure travel. But that trend is really putting the hurt on airlines and the hotel industry, especially in the larger cities. There are even examples, it was reported to us at the conference, of big hotels like Hilton in New York City that are largely dark. In fact, some of those hotels are starting to convert all or parts of their properties into affordable housing.”

There may be a silver lining to the problems in New York City, though, according to Pat Riley, the president and chief executive officer of Allen Tate Companies, based in Charlotte, but with two real estate offices in the local market, in Blowing Rock and Boone.

“I don’t think Charlotte or Raleigh will be hurt, but for the really big cities it may be a different story,” said Riley. “People are leaving Miami. They are leaving Atlanta. They are leaving Chicago. They are leaving New York City. Some might call it a Carolinas’ bubble but for six years now we have seen 6 percent to 9 percent appreciation for properties in our Allen Tate footprint, which reaches from near Raleigh down to Anderson and Seneca in South Carolina. But the reality is no, it is not a bubble because in the Carolinas the average sales prices are so much better than most of the rest of America.

“You see, COVID-19 was just the icing on the cake,” said Riley. “People have wanted to leave Chicago and New York and some of those other large cities because of the high taxes and the long, sometimes hour and a half commute to and from home.

“COVID-19 and the threat of infection was just the final push,” Riley said. “Now they are saying, ‘I am going somewhere.’ And that somewhere is to the mountains, to the beaches, to places with a good per capita income, low cost of living, and wonderful quality in healthcare facilities. They are making decisions based on lifestyle and the proliferation of broadband is allowing them to make those decisions.”

A self-styled futurist, Riley still has doubts that the “work from home” phenomenon brought on by COVID-19 is sustainable during the long-term.

“Psychologists have determined that 89 percent of people need a time clock and accountability,” said Riley. “Only 11 percent can really work alone. So now we are saying that the human being and the human mind and heart have morphed into something else, that 89 percent of people can work from home? ... Human beings mostly need other human beings.”

“What people miss in isolation is culture,” said Riley. “They miss the spontaneous ideas that come from working with others. They miss the opportunity of walking down the hall to the restroom and saying to a co-worker he or she might run into, ‘What do you think about this idea?’

“And here is the funny part,” Riley said. “Our experience with COVID-19 in having large numbers of people working from home was not a good experiment. When you work at home you have fewer interruptions and because of the COVID-19 lockdown circumstances, you had even less because that worker couldn’t go anywhere. Everything was closed. Now with things opening up, there are more temptations, more distractions. Now with things opening up you have chaos because each individual will have more interruptions.”

With the thought that much of the business world may well return to groups of people working together rather than alone, Riley returned to his thoughts of a silver lining emerging in New York City.

“OK, so the world is leaving the big cities right now,” said Riley, “but I have a broker in Manhattan who told me recently, ‘Yeah, we are the only place in the country where prices are going down ... in value. Given time, people will always want to live in Manhattan. People have dreamed of living next to or near Central Park. We are selling every day here. We are having to sell at rock-bottom prices, but if anyone ever dreamed of owning a flat in New York City, this is the time to consider buying. Same with Chicago. The demand is insatiable, but it is still a buyer’s market. It is hell if you are a seller, but most still have a lot of equity and they are doing fine in their sales. In short, the market is hot as heck for people who want to come in and bottom fish.’”

While New York City was gasping for its economic life, places such as the High Country were booming. Amanda Lugenbell is assistant director of the Blowing Rock Tourism Development Authority and she sees definite strength in the numbers.

“Blowing Rock and Boone occupancy tax collections are constrained by the town limits,” said Lugenbell. “Except for a couple of other small towns, the rest of the occupancy taxes are collected by Watauga County and those have really grown during the pandemic. There are not that many hotels outside of the town limits, so we know that the vast majority of the county’s occupancy taxes are coming from vacation rentals.

  • “I think an interesting question to ask is whether people who have second homes up here, whether in the county or inside a town limits, made them available for rental last year, to capitalize on the migration of people from urban to rural environments. People have been looking for more remote locations. A lot of smaller towns in the mountains, like Blowing Rock, Banner Elk, and Hendersonville, benefited because that is where people were looking to escape risk.

In Blowing Rock, Lugenbell hinted that it has not always been possible to distinguish between “migrant” and seasonal resident.

“We all know that the population in Blowing Rock explodes in the high season in a typical year, to maybe 5,000 or 6,000 as all of the seasonal residents come up during the warmer months between late May and October, and most staying through the fall colors,” said Lugenbell. “In normal times, outside of the high season they keep their homes dark. They winterize them. But this past year and even through the winter, those driveways have been full of cars almost the whole time. People didn’t want to be where they are part of a crowd, where the risk of COVID-19 infection is greater.”

That thought was reinforced by Linda Gilleland, founder of Greystone Insurance, now a subsidiary of LifeStore, the West Jefferson-based financial institution.

“Here we are a year later,” said Gilleland, “and in the long run I don’t think the pandemic impacted us as negatively as we thought it might, financially. That is one of the great things about living here. And people started coming here to buy houses. You have some employees working from home, people not coming into the office. People didn’t want to be around other people so much. In our commercial lines, we had to do more of our business through email or phone calls.

“That was hard for me,” said Gilleland, “because I like meeting with my clients, face to face. I never really embraced Zoom. It is not the same as meeting in person. Email and our internal software applications are OK, but if Zoom meetings are not mandatory, I skip them.

“At the very beginning, I worked from home and sometimes I still go home to work,” said Gilleland. “I like coming to the office.”

Gilleland also said that one of the curious developments she saw in her insurance business during the pandemic is that a lot of people bought cars.

Riley of Allen Tate seconded the notion that people are buying homes in the High Country.

“Because the stock market is so high,” said Riley, “people are asking, ‘Where do I put my money?’ And there is a lot of money out there, on the sidelines. One of the beneficiaries in terms of asset classes has been in the secondary market for real estate, existing homes, especially in the more rural mountain communities.

“Our biggest problem right now,” said Riley, “our No. 1 problem, nationally, but especially in communities like Blowing Rock, Boone, Cashiers and Highlands, is inventory. These places are looked at as refuge from the pandemic. Houses are being scooped up as fast they come on the market. If a house gets listed and doesn’t sell right now, then there is something terribly wrong with it. Sellers are in what amount to auctions right now. The average house for sale is getting multiple offers. And then there are some players out there saying, ‘Hey, you don’t have to list your house at all. We’ll buy it from you.’”

Beyond real estate, the Blowing Rock Chamber of Commerce CEO offered other observations.

“According to what we learned at the Main Street conference,” said Hardin, “the ‘events’ segment is down 72 percent. I can attest to that being the case in North Carolina and Blowing Rock because we are an events town, here. We lost our biggest money maker, Symphony by the Lake. We lost most of Winterfest and our Art in the Park events were compromised. That hurt.

“Apparel is down 21 percent,” said Hardin, “but I will footnote that by observing our experience here, in Blowing Rock. Our retailers that ‘pivoted’ at the beginning of the pandemic to casual wear and outdoor wear did just fine. The high-end clothing retailers who didn’t pivot and kept offering fancy dresses for country club events, parties, church and those big events that didn’t happen last summer, those guys really got hit hard. We had some of our retailers here in town have their best years ever because they saw the writing on the wall and pivoted to adapt. The ones that pivoted may not have seen records, but they came out ahead.

“I will give you one example,” said Hardin. “At Monkee’s, which sells women’s apparel, Ken and Jess Wehrmann are pretty sharp. They anticipated what was happening and pivoted to casual and outdoor wear pretty quickly. They even put in hardwood floors to give the store a completely different feel. We had stores in Blowing Rock that pivoted and in January this year were up as much as 70-85 percent versus a year ago. The ones that didn’t were more likely to be down 20 percent. That’s not just in apparel, but also those catering to outdoor recreation or offering books, and things for children.”

Hardin underlined the benefits of pivoting by noting that in 2020, dress apparel was down 80 percent, while sweatpants sales were up 79 percent.

Hardin also admitted that his concerns about the restaurant segment in Blowing Rock and elsewhere in the High Country proved unfounded during the pandemic lockdown.

“From the beginning,” Hardin said, “I was afraid that our restaurants would get hurt worst by the stay-at-home order by the governor. But, guess what? They didn’t. They all pivoted to take out and curbside delivery. They may have lost all or a good amount of their inside seating capacity, but all of them have figured out a way to put people outside, for the most part. Plus, most of those restaurants didn’t have services like takeout and curbside or delivery prior to the pandemic. This experience has created new sales categories for them. Across the restaurant industry, they are down only one percent during the pandemic because of their ability to pivot.”

Hardin added that the lodging industry lost half of March 2020, plus all of April, May and June.

“But from an occupancy tax standpoint,” he said, “the lodging industry came in pretty much even for the fiscal year ending June 30, 2020. That’s because the last six months of 2019 and the first couple of months before the pandemic-forced lockdown were excellent.

“Now since July 1, 2020,” Hardin said, “the lodging industry in the High Country is killing it. Hotels are doing OK, but what is really boosting lodging sales are vacation rentals, Airbnb, and such. And people aren’t coming for less than 28 days, which would be short-term rentals. They are coming for a month, even months at a time. They don’t want to stay at a hotel but rent a house so they can have a home away from home, prepare their own meals a lot, and stay away from other people.”

One of the benefits of all the people in town, whether seasonal residents escaping to their second homes or the vacation rental tenants, Hardin pointed out, is the mid-week business that it has brought.

“It has been a mid-week bonanza,” said Hardin. “Normally, most of our tourist and even seasonal visitors come up on the weekends. Not this year. Because of the proliferation of broadband in the High Country, people can work from just about anywhere and their kids were attending school remotely, anyway. So, even during the middle of the week, Main Street has been busy. Everywhere, midweek sales are up.”

Judy Current, the director of marketing for West Jefferson-based LifeStore, noted that for most people among the bank’s customers, the pandemic has resulted in greater savings and paying down debt.

“With people staying at home,” said Current, “they are not spending as much going out to eat. They aren’t spending as much on entertainment. Instead, they are taking a lot of that money they aren’t spending and saving it in their rainy day accounts and their retirement accounts, as well as paying down debt. A lot of them are doing the same with the stimulus checks. They are not spending the money but putting it in savings or reducing their credit card debt.”

Blowing Rock-based Edward Jones & Co. representative Billy Chick saw a big windfall in the federal government’s stimulus packages for a demographic that needed it.

“One of the positives I see from this pandemic is that it has allowed a lot of people to make headway in paying down their student loan debt,” Chick said. “That debt has been a hot topic in recent months because of some of the abuses, but a lot of folks have used the stimulus money to pay back some of their student loans. Even more important, the federal government imposed a freeze on interest charges applied to loan principal. That is allowing the borrowers to pay down their balances that much faster.”

Chick also noted that the stay-at-home orders have meant reduced rates of personal spending.

“People aren’t going out,” he said, “so the money they might ordinarily spend on restaurants and bars, as well as other types of shopping they are putting into savings accounts.

“That said, for the people who lost their jobs or had their hours cut back, the stimulus checks just don’t seem like it is enough money to keep those folks’ heads above water,” Chick said. “The biggest aid for them has been the extension of unemployment benefits. For them, the second stimulus package was a godsend.

“I haven’t seen people changing their personal investing habits,” said Chick. “There were some people who lost their jobs so they had to quit contributing to their retirement accounts until they could work again. And, they have had to tap into their emergency funds to pay their bills. Most folks, though, remain committed to the plans they put in place before the pandemic and have continued to save for retirement or for their children’s educations.”

Turning to the topic of small business, Chick said the Payroll Protection Plan (PPP) loans were a real benefit to small business owners, even if there were a number of businesses that got loans who maybe shouldn’t have.

“The first round of those PPP loans were forgiven,” he said, “and the second round may be forgiven, too. So for the small business owner fighting to keep employees working, that has been a real help, both the loans as well as the forgiveness. They have saved a lot of businesses.”

Hardin was frank in discussing the PPP loans.

“Everyone grabbed the PPP money in some way or another,” said Hardin. “The first round was forgiven, and most have at least tried to get the second round. If they are going to forgive those loans, you might as well get the money.”

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