Asheville Real Estate Market Report
End of Year - 2022
As we come to the end of an amazing year in Asheville, It's always fascinating to analyze the changes in the current real estate marketplace to better understand what lies ahead for the Asheville region. I've been selling and managing real estate for over 16 years and I've seen several transitional markets. The current market shift is happening fairly quickly, however it seems to be pretty mild and should benefit many buyers, sellers and tenants over the next several months.
The Real Estate Market always has several cross currents which define who will benefit and who will potentially feel some pressure. Some of the key data points which I watch closely are gradually changing which should impact buyer/seller behavior over the next few months. Many of the statistics are seasonal factors, however they should indicate incremental changes. Feel free to reach out to me if you have specific questions on your homes current value or if you are thinking about purchasing.
Here are a few key points:
1) Inventory levels are starting to gradually improve. Currently, there is a 2.4 month supply level which is up 20% for last year's level of 2.0 months. This statistic alone is going to affect the negotiation paradigm for many buyers/sellers.
2) Days on the market prior to receiving a contract are increasing, currently standing at 38 days which is up 8% over last years 35 days.
3) Pending Sales (homes under contract) are down 22% from last year. These levels have been down all year based on the extremely low inventory levels.
4) Percent of Original List Price Received has decreased 2.2% to 95.2% in the county. Each price range will have differing and meaningful levels. It had been as high as 98.5%.
5) Median Sales Price increased 10.1% to $380,000, this number has been decreasing from the peak of a 17.8% median sales price in July (People are listing homes for lower price-points, this will start to bring the overall number down).
6) New Listings decreased 22.5%. (There is still a lack of new listings, but new inventory is definitely starting to increase).
With mortgage rates quickly jumping to an average of around 6.8% we are seeing less activity from both a new listing stand-point and the clearing of existing homes. I’m still seeing multiple offers in many price-points, if the home is very desirable in terms of price/location/updates. However, as always there are homes that sit for a while that need many updates.
I think it’s going to take another big shake-out in the stock-market or even higher interest rates to meaningfully shift the market to a true "buyers market" and/or to see prices make significant down-turns. I manage about 45 single-family homes and I'm not seeing a huge in-flux of new tenants right now, however much of this has to do with seasonal factors. The seasonally diminished number of renters moving to the area should affect activity over the next few months. I'm definitely seeing rentals take longer to fill and I think price appreciation on rents has perhaps peaked. At-least during this slower season.
Many of the renters will be buying at some point as they haven't been able to find adequate inventory upon moving. I had been seeing many investors cashing out of the stock market and purchasing homes as rentals and becoming first time residential real estate investors. These investors have clearly been driving some of the market returns. I believe this portion of the market is significantly slowing down as the stock market cools and price appreciation affects the returns investors can receive. This will in-turn help inventory levels rise and potentially affect price appreciation, however they are only a small portion of the equation. There is a tremendous amount of pent-up buyer demand in the region and this will continue to be strong as Asheville grows.
In the Asheville region, for the week ending November 19:
• New Listings decreased 22.5% to 196
• Pending Sales decreased 22.3% to 206
• Inventory increased 2.4% to 2,320
For the month of October:
• Median Sales Price increased 10.1% to $380,000
• Percent of Original List Price Received decreased 2.2% to 95.2%
• Months Supply of Homes for Sale increased 20.0% to 2.4
The Pandemic had turned real estate on its head two years ago from a cooling market. The market has been in a whirlwind ever since the Pandemic began and now throughout the summer of 2022 it continued to be on fire. We had been in the strongest sellers market that I've seen. I've had several client's buy homes virtually from across the country and I'm seeing a continual large in-flux of buyers coming to explore and purchase. Without a doubt one the biggest drivers of the Asheville boom is the "work from home crowd”.
The Pandemic seems to have materially shifted many buyers ability to move from large cities such as Chicago, NYC, LA and Boston. These large city purchasers have clearly been coming in droves and driving up prices significantly. This trend has turned and is slowing, however most likely will be with us for most of next year.
Asheville and the region has always been a fairly difficult market from a desirable inventory perspective, however it seems now that demand is leveling off a bit while inventory is still fairly tight which is a recipe for a balanced market.
I look forward to another strong winter season ahead as it will be interesting to see if demand slows further or inventory materially increases. I'm hoping for a more balanced market. Thank you to everyone for all your well-wishes and referrals over the year as it has kept me very busy. Wishing everyone a fantastic end to a 2022.
2022 Highlights
1) This year started as an extremely strong buyers market from winter standards. There were simply very few homes coming to market and multiple bids created a self-fulfilling situation where the buyers who began to lose out on bids began to aggressively change their bidding strategies. As buyers became conditioned to losing bids they began to bid much higher up front, many times 10%-20% over asking was typical on a new listing. As soon as March hit, the market began ramping up at a very strong pace. Since April, there has been extremely strong demand in many price-points with a very constrained inventory base. Sellers have been pricing much higher this year and many are getting their prices.
2) Inventory levels are still at extremely low levels, while decreasing to a 2.4 months supply at this time. For reference, in 2014 while the market was still coming out of recession and really starting to pick-up, the inventory supply level was at 8.2 months. There are about 1,150 active listings in the region.
3) The high-end market which I consider to be $1.2 million + has been clearing out pretty nicely over the last several months but has turned a bit quieter. Overall, throughout many markets in the country this segment is starting to slow which should trickle down into other segments, however here it has not. Well-located homes that provide value in this segment are continuing to sell at a very nice pace. We are seeing many $3 million + homes selling. This is the segment to watch if the stock market makes another big down-turn. I think if it does, we will see more difficulty ahead. Buyers are definitely watching this segment closely and there are many deals to be found.
4) We were seeing many bidding wars, especially in areas like West Asheville, Central Asheville and Montford. Many of these homes are getting 6-10 bids on day one and are going for well over asking price, many times 10-20% plus. It's a very competitive market out there for desirable homes in strong locations. I don't anticipate this changing for quite a while. However, the multiple bids should come in a lot.
5) The investor market which has driven plenty of volume in the region has diminished greatly. This market is going to slow down in terms of total number of units sold as there are not as many deals out there that make sense to investors. Investors are going to have to think opportunistically in this environment to continue to make their numbers work. A few short term rentals that haven't performed to expectations are hitting the market, making opportunities for long-term investors. Renter demand is dropping right now however it's tougher to find affordable rentals for many people. Rent prices had been going up aggressively in Asheville and it's extremely difficult to find a desirable rental. I was seeing 30+ applications on many of my rentals that I manage within a few days, however this trend is slowing down now. Renters are starting to find homes on the market, albeit at elevated rental prices.
Overall, it has been a fast-paced year for most buyers and sellers. Our agents have seen tremendous success thus far and it's imperative to have an agent who is on-top of things and aggressive
in this market.
Thank you for all of your support, referrals and well wishes over the years! I'm really excited for this next phase of continuing to help
clients with their real estate needs throughout Asheville & Western North Carolina
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