Seeing the green come back is such a welcome sight. Spring is well underway here in Asheville. One of the most common questions I get from friends, family, and readers here is “how is the Asheville market?”
Compared with a year or two ago, I’m finding that more and more people are renting instead of buying in Asheville right off the bat.
During the pandemic, there was this (frenzied) sense of urgency to “buy now or else.” I’m not getting that vibe from people anymore.
Frankly, I’m glad. My my perspective as a Realtor, it’s a lot more comforting knowing that someone is able to take their time with the home hunting process. With such limited inventory, folks under the gun to find a home are less likely to be satisfied (or successful) with their purchase in Asheville.
There are a lot of ways to live in Asheville, and it should take time to figure out what works or makes sense. We have fixer-uppers, new builds, historic homes, condos, and homes in the $5-9 million + range.
Today, I want to talk about how I’m thinking about prices right now.
The Danger about Generalizing About Prices
I’ve never really been a fan of saying that the market is doing just one thing, or about offering “spin” to highlight or exaggerate any given aspect of the market. The market is complex.
A real danger of generalizing is that you are outright wrong with your generalization because the trend might not be (hint: usually is not) the same in every neighborhood or price range.
I will say we haven’t really been seeing a Spring price bump – or bump of anything really. The trend is that prices, numbers of new, pending and closed listings, are all cooling off.
How People are Feeling About the Spring Market
I’m a data science guy, and I know this isn’t really that scientific, but I polled my Instagram followers a few days ago about about what they think prices are doing and this is what they said. The bulk of votes are from people who work in real estate locally, but not all.
I think there is still a lingering perception that prices are going up when in fact the data shows that they are probably flat at best or decreasing. It goes to show you what an impact the last couple of years has had on people’s psyche.
Above One Month of Housing Supply in Asheville
One of the key indicators of market health is the ratio of supply (i.e., active listings) to demand (i.e., buyer interest).
The market definitely is a mixed bag right now. In March 2023 we had roughly 1.5 months of housing supply*. This means there is a little more than one month worth of active listings available to buyers. In March 2022, where we had less than a month.
So, things have improved, but the number of new listings is still slim.
Look at What’s Going on in The Neighborhood
It’s always a mistake to take Asheville City data and pretend that it’s what’s going on in Montford, Kenilworth, West Asheville, or Biltmore Forest. You have to look at the neighborhood’s market.
What’s happening to prices? What’s happening to Days on Market? Are the prices higher and are there multiple offers, fewer credits, concessions? And why? What is pressuring?
The Asheville Affordability Challenge
I think we also have to finally accept that affordability is an issue for the area.
As prices have risen over the past few years, many buyers have been priced out of the market, especially those who are first-time buyers or have lower incomes.
For many Buyers, the change in interest rates coupled with the change from pre- to post- pandemic prices has made Buying pricier than before. And perhaps too pricey for some.
As a result, there is less demand and we are seeing inventory rise, slow as it may be. Our Asheville market is starting to miss Buyers which is creating new competition between Sellers. I think we will see this impact prices favorably for Buyers, but I don’t know when (or in what neighborhoods, if at all).
What is clear is that we really don’t see the massive price acceleration that we had in 2021 but there is still competition for the right home in Asheville. Multiple offers are still possible and it’s still advantageous to be a cash offer with no contingencies. That may never change.
Will the Number of New Asheville Listings Increase?
I’m not really sure about this one. Right now, it’s very difficult for many homeowners to list their homes. This is because the price to replace a home is so much higher compared to the current monthly payment with a sub-3% interest rate.
Why Are Homes Being Listed in Asheville Now?
Homes are still being listed in Asheville, and it’s worth exploring why and who is listing their home.
Some owners list their property due to inheritance, a change in family status, moving up or down, selling an investment, or economic reasons, among others.
Outbound migration is also a factor to consider as some people sell due to lifestyle needs and wants conflicting with market conditions.
Seeing the Trees Through The Forest
I like to remind myself (at least once a week), that not everything is selling above asking price like it was some time ago. The Asheville market continues to be unique relative to other metros owing to it’s geography, but it is not immune to fluctuations in the market.
The media and social media tend to highlight sensational bidding wars or huge sales prices, but we (I) have to be careful not to isolate one example (the tree) and forget about the entire market (the forest).