Beverly-Hanks President Neal Hanks, Jr. has delivered the first quarter 2018 Market Report. Watch the video below for his short report, or continue reading for a summation.
When examining our regional real estate markets, we consider sales pace, home prices, the supply of homes for sale, and the availability of financing.
WNC Sales Pace
In a trend that began in the summer of 2017, the sales pace across Western North Carolina slowed by 5% during Q1 2018. The decrease in sales pace is primarily impacting properties priced under $300,000, for which there is a critical shortage. The shortage of properties priced under $300,000 has become so pronounced, it is dragging the region’s overall sales pace down.
Even with the pace slowing from recent record highs, 585 properties are selling each month across our nine counties. The pace for properties priced $300,000–$600,000 actually increased by 7%, likely from buyers moving up their home search.
The declining sales pace is most pronounced in Buncombe County. However, the sales pace is down in all counties except for Rutherford, Yancey, and Mitchell. There’s still a reasonable supply of more affordable homes for sale in these counties, which has buoyed their sales pace.
We expect a slower sales pace to continue across the region as a whole as sales of less expensive properties continues to decline.
WNC Supply of Homes
Continued declines in home supplies have been driving trends in our region for several quarters now. Finding homes under $300,000 has been increasingly difficult. However, the supply of homes priced over $500,000 remains sufficient to maintain a balanced market. And for homes priced over $750,000, there is enough inventory to give luxury home buyers an advantage when negotiating. (This, of course, assumes there are reasonable comparables available in the specific market.)
With the cost of construction increasing and shortages of skilled construction labor, we do not expect the supply of homes priced under $300,000 to increase in the foreseeable future. The best opportunity for home buyers wishing to find a home priced under $300,000 is to team up with a well-equipped agent. Or you can consider one of the charming communities found in Rutherford, Madison, Yancey, and Haywood counties, in which inventory still exists.
WNC Home Values
The shortage of homes for sale is pushing home values higher, along with low interest rates, the draw of our region’s lifestyle, and active real estate markets in other parts of the country. Despite this, demand has not changed significantly to date.
The Federal Housing Agency recorded a 7.7% increase in home prices for the Asheville MSA over the last twelve months. This is the fifth straight year of home appreciation, giving the region a 17% lift over the past 10 years.
We believe home prices will continue to push up as demand continues and supply further constricts. Price increases can be expected across the region, but will be most pronounced in communities with homes remaining under $300,000. Increasing home mortgage interest rates aren’t expected to have much of an impact on home ownership unless they crest 5%.
Buncombe County continues to experience the highest median sales price in the region at $285,000. Rutherford County has the lowest at $170,000.
Availability and Cost of Financing in WNC
Mortgage rates have been up each week since the beginning of this year. In total, rates have gone up almost a half a point. Freddie Mac is projecting that by the end of this year, we’re going to be close to 5% interest rates.
There is a lot of fear that if interest rates go up, fewer people will qualify for loans and it will cause the real estate markets to stall. This fear isn’t based on any historical data. Remember, a rising interest rate environment usually means the economy is doing well. Unemployment is going down, consumer confidence is going up. Even though fewer people can qualify for a particular loan, there are more people out looking.
In any market, buying a home only makes sense if you’re able to own a home within your budget. A conversation with a Beverly-Hanks mortgage loan officer is a great way to determine the best home purchase for you.
Take Advantage of Price Appreciations
Price appreciation continues to march higher, creating big opportunities for homeowners. Demand is being pushed by low unemployment, increasing desire for home ownership, and people’s enthusiasm to live in Western North Carolina. This demand is creating a very active market, but buyers are being forced to compete for the dwindling supply of homes for sale.
Here in Western North Carolina, that combination has translated into a 7.69% increase in prices since 2017.
Home prices have trended upward for the past five years, leaving many homeowners unaware of the equity they have gained. According to Fannie Mae, only 37% of Americans believe that they have “significant equity” (greater than 20%) in their home, when in actuality 83% do.
If you want a home that better meets your needs—whether it be bigger or smaller—don’t miss this opportunity! Learn how to find opportunity in today’s dynamic market. Request a Real Estate Review from your Beverly-Hanks & Associates. With mounting equity, you might be easily able to move into your dream home in time for summer.
All real estate is local. In order to make confident real estate decisions, we believe it important for you to have timely and neighborhood-specific information.