For the year 2021 I have been reviewing the changes from month to month. For the month of Dec. 21 on average the number of listings and pending sales were down just a little. This is typical for the holidays as some people don’t want to list their home during Christmas. The difference was that even during this time the closed sales price continued to increase.
The entire Asheville region had a strong seller market for 2021. Medium home prices increased in every county. Outlining counties saw the largest increase, with Yancy coming in at 29.2%! This trend was started in 2020 as house prices soared in Henderson and Buncombe County, many people decided to move further out in order to find what they wanted at their price point. Across the region single family homes increased 15.5% and townhouses/condos increased 17.2%.
The climbing sales price did encourage some undecided homeowners to go ahead and list their house in 2021. This led to an overall increase in inventory, which is now depleted. The housing supply in the entire Asheville region is at a critical low, with some counties having less then a month’s supply! This will certainly contribute to the remaining inventory maintaining the current market median prices.
Buncombe County median home price is now $390,000 and Henderson County $350,000. This makes it very difficult for new home owners or people down sizing to find a home. Usually, homes at this price point will have multiple bids in just a few days. Buyers who must live in these counties may need to adjust their expectations and be ready to make a quick decision.
This has been a challenging year for investors, as they have had to compete with buyers who just want to live here and are willing to pay top dollar for houses that need major repairs. This trend has been occurring over the past 4 years, with the foreclosure prices increasing 76.4%!
The pandemic has created some trends in real estate that will become more standard practice.
Sellers, only want serious buyers to visit their home.
- Pre-approval letters and proof of funds are being required to be sent to the list agent before showings are scheduled
- Due diligence fees are standard and often over 1% of purchase price
- Virtual tours are essential. Sellers are now willing to accept offers from buyers who have only viewed the house online
- Cash is only king if full price offer and faster close with no contingencies
This trend will continue through 2022 as our inventory is a critical low.
Real estate has a natural cycle of following from a seller to even to buyer market. One of the things that may slow down the price gain is the increase in the interest rate. We are at an all time high with inflation, so an increase in interest rate will happen in 2022. While this will remove some buyers from the market there will be buyers who can pay the medium home prices. Due to the extreme housing shortage, house prices in our area will probably continue to increase in 2022. The supply chain and labor shortage issues will take a toll in 2023 and baring another pandemic, the real estate market will become more even. I don’t foresee our area becoming a buyer’s market anytime soon.
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