World and national economics affect the housing industry, so we’ll start with the National Association of Realtors (NAR) forecast, then look at our local market.
Across the nation, there is still a housing shortage, which means new construction will continue to grow. However, new construction costs more than existing homes and we already have an affordable housing crisis. Mortgage rates are predicted to stay low, yet buyers’ wages limit loan qualification amount.
The consensus at the NAR Forecast Summit is that at best, there will not be a recession, at worst, a 29 percent chance.
Markets to Watch According to NAR:
- Raleigh-Durham-Chapel Hill
- Winston-Salem, NC
- Charlotte, NC
- Charleston, SC
- Columbia, SC
- Chattanooga and Memphis, TN
- Tampa-St. Petersburg, FL
- McAllen-Edinburg-Mission, TX
- Dallas-Fort Worth, TX
- Columbus, OH
- Fort Collins, CO
- Colorado Springs, CO
- Tucson, AZ
- Las Vegas, NV
- Ogden, UT
- Boise, ID
- Rochester, NY
So what does all of this mean for us? Well, pretty much the same thing. The greater Asheville region will continue to have an affordable housing shortage. The average sale price for an existing 3 bedroom/2 bath home was $265,000, and $325,000 for new construction. While these numbers may seem low to people moving into the area from larger cities, our local residents have a current living wage of $13.65 an hour, which makes it almost impossible to buy a house. The same holds true for most of the aforementioned hot markets.
Most buyers will either be second-time home owners or moving here from a large city. Sometimes, out-of-state buyers are shocked by our prices. Houses $350,000 and under will go fast, so be prepared to make an offer as soon as you find one you like. If you are looking for a home that doesn’t need any remodeling or repairs, be ready to pay $275,000 or more. Once you are in the price range of $400,000 - $600,00 and above, you have a little more time to make up your mind. That price point stays on the market an average of 50-60 days. The issue is that there is significantly less supply because many of the active listings are new construction and have not yet been built.
All of this should mean good news for sellers. However, the market is shifting. We have leveled off on extreme price increases. The condition of the house critically affects the price. No longer can you stick a sign in the yard and get a crazy amount for a pig with lipstick.
Buyers expectations have changed in the past 12 months. New construction is often the competition, so existing homes need to be in generally good condition and ready to move in. If you plan to sell your house for more than $275,000, you will need to do some upgrades and repairs. Otherwise, buyers will be subtracting those improvement costs when they make an offer.
A noticeable trend is that many people are moving more than 20 minutes from downtown Asheville. More of my clients are stating that they don’t want to live in town due to high prices and traffic. The same is true for Hendersonville. Towns like Weaverville, Marshall and Mars Hill are becoming attractive due to price point, the sizes of homes and lots, and a “small town feel”. Another trend is that investors have expanded their “sweet spot” locations to as far as an hour away for their home base.
Ironically, all of this means that it is the prefect time to both buy and sell in the greater Asheville area. Historically, this area has continued to appreciate at 3+%. This means that house prices will always be going up, so if you want to buy, now is the best time.
For sellers, the factor to consider is that new construction will continue to come online and buyers will almost always buy new construction if the price is the same. So now is the time to make those improvements and get top dollar for your house.
Real estate is cyclical and change will happen. Eventually, there will be a slow down in the market and interest rates will rise. Right now, 2020 looks like a good year for both buyers and sellers.
If you would like more information about our local market, please contact me at firstname.lastname@example.org.