Written by Collin O’Berry, Managing Broker and Owner of Altamont Property Group
With all of the media focus on inflation and the FED’s resulting actions with interest rates, we are seeing wide-ranging effects across the economy and real estate markets. We’ve seen buyer affordability continue to erode with higher home prices and interest rates and a declining stock market. These factors have affected different price ranges disproportionally. At the same time, we’ve seen buyer demand remain strong with population growth in the region along with a strong labor and jobs market.
In Buncombe County, we are still in a generally low inventory environment and we’ve seen real estate values continue to increase. At the close of 2021, average home prices were 10% higher than a year prior in December 2020. As of September 2022, prices are up 12% compared to a year prior.
We are still experiencing competition for quality homes and multiple offers are still common on the market, although it’s uncommon to see 10+ offers on a home like we saw in 2020 and 2021! Quality homes can mean they are in great shape, have desirable locations, sit on great lots, or are just priced well.
Inventory is still very low for price ranges $500,000 and below, averaging just 1.2 months. For price ranges between $500,000 and $1,000,000, the market is showing signs of loosening with inventory numbers drifting upwards, yet inventory levels still average just above 2 months. For price ranges above $1,000,000, we are seeing much more inventory come available with less homes being absorbed, and inventory levels averaging 5.46 months. This loosening in the higher price ranges can be attributed to a reluctance of luxury buyers to enter the market with higher interest rates and uncertainty in the economic outlook.
Across Western NC, many of the same factors are in effect. Smaller towns in the region are seeing sales pace begin to taper off similar to the Asheville area, albeit at different paces depending on the town, demand, and location. In markets with traditionally high demand for short term rentals like Transylvania and Haywood Counties, we’re seeing inventory loosen at faster rates. This can be attributed to decreased affordability for discretionary short term rental purchases, also due to a drastic increase of short term rentals available on the market since the COVID pandemic. Affordable housing for local and relocating households continues to be in short supply and high demand.
What does the future hold? It’s tough to say for sure, yet we do expect these trends of increasing inventory, decreasing sales pace, and rising interest rates to continue. Regarding inventory levels, context is everything as we are generally still in a seller’s market across the board. At the same time and contradictory to these trends, property values are expected to increase, albeit at slower rates than we’ve seen in the past 2 years.
Market statistics for counties across Western NC can be found here. Any questions, comments, or feedback? Curious about how you can use expert market knowledge to help achieve success for your real estate goals? Connect with us today to learn more!