Hyperactive is the only word that can adequately describe our current real estate market conditions. Homes are selling quickly thanks to very competitive conditions, and home values are rising rapidly as a result.
To give you the rundown of the current market, Beverly-Hanks President Neal Hanks has delivered the Q1 2021 Real Estate Market Report. When breaking down the markets, we examine four metrics: sales pace, home prices, supply of homes for sale, and the availability of financing.
Read the full report or contact your Beverly-Hanks real estate expert to learn more about the up-to-date dynamics of your neighborhood.
WNC Regional Sales Pace
Year-to-date closed sales across the nine-county region are up 23% compared to last year.
Persistent demand and too few homes for sale have intensified existing competition among buyers. The National Association of REALTORS® reports that nationally the average home for sale is receiving 3.7 offers, up from 2.3 offers just one year ago. This competition is driving the median sales prices up in many neighborhoods by double-digit percentages. The incredibly tight supply of homes for sale is the lowest in memory. And until demand eases, we do not expect price gains to end.
With such intense competition in the market, it’s important to review new homes for sale quickly.
- View new homes for sale in Asheville.
- View new homes for sale in Brevard.
- View new homes for sale in Hendersonville.
- View new homes for sale in Waynesville.
WNC Home Values
The median sales price of a home in WNC has risen 17% from last year to $327,450. In some counties, like Transylvania and Yancey/Mitchell, values are up 26%. For the first time ever, Transylvania County’s median sales price pushed ahead of Buncombe County’s. Transylvania currently leads the region at $375,000. Rutherford County continues to be the most affordable at $225,000.
Intense competition among buyers is forcing offers up, sending home prices soaring and appraisers scurrying to justify market values based on recent sales. Adding to the mix are mortgage rates. Rates have remained under 3% for months but now show signs of marching upwards. The prospect of rising rates is further fueling a sense of urgency among buyers, putting additional immediate pressure on our home supply.
We expect home values to continue to rise at a steeper rate in 2021 than the region’s historical average. According to the Federal Finance Housing Agency*, Asheville MSA’s homes appreciated 5.5% over the last 12 months.
*The Home Price Index provided by the Federal Housing Finance Agency is one of the most accurate in the industry for home values. However, it does lag our local MLS data by one quarter.
WNC Supply of Homes for Sale
Simultaneous with the surge in demand, the inventory of homes for sale has declined by 60% when compared to 2020—a year with already strikingly low supply. Conditions will remain tight throughout 2021 as first-time buyers, many of whom are Millennials, come to the market in droves. According to Pew Research, about 4.8 million are turning 30 this year. Zillow reports that the typical first-time home buyer in the U.S. is 34 years old. This suggests that we are on the leading edge of this demographic wave. The National Association of REALTORS® reports that Millennials make up the largest share of the home buying population at 38%.
Zillow reports that as these first-time home buyers enter the market, homes in the most-affordable market segment will appreciate the fastest. In many areas, the gap in appreciation rates between the most- and least-affordable homes is widening. This widening is evidence of the intense competition between buyers on a budget.
In more modest price brackets, homeowners may have a once-in-a-lifetime opportunity to capitalize on their surging appreciation and re-invest in a home that better meets their future needs. Schedule a conversation with a Beverly-Hanks agent for a careful analysis of our price bracket snapshots.
Availability and Cost of Financing in WNC
There’s no crystal ball for predicting mortgage rates, but most experts believe that rates will inch up as 2021 progresses. Timing when rates will rise and how much they will increase depends on how quickly the COVID-19 vaccine and the United States’ colossal aid package accelerate our economic recovery. If successful, these dynamics will drive economic growth and inflation, driving long-term bond rates higher. Long-term bond rates are a key indicator of mortgage rates.
Small changes in rates can have an outsized effect on the long-term costs of homeownership. Since rates are expected to rise, locking in a low rate, even if it’s not the lowest in history, is the best way to have some budget certainty.
To be sure you’ve considered all of your options, ask a Beverly-Hanks Mortgage Services loan officer about the Mortgage ReView program. We’ll review your current loan estimate, and if we can’t beat it, we’ll give you a $100 gift card. Restrictions apply—be sure to talk with your real estate agent or loan officer for details.
What’s Next for WNC Real Estate
We believe three trends will continue through 2021:
- The growing allure of our region’s high quality of life.
- Razor-thin inventories.
- Strong demand across all sectors of the WNC housing market.
Markets will remain challenged by a lack of inventory, as well as the merging of demographic and existing lifestyle trends amplified by the pandemic. Interest rates are expected to rise as the Federal Reserve Board turns its attention to keeping inflation in check. Rising rates could hobble the galloping sales pace, but all indications show that demand will remain strong. The Conference Board’s Consumer Confidence Index showed that 8.4% of respondents surveyed in March plan to buy a home in the next six months. This is the highest share in the survey’s history (dating to 1978). The biggest question is whether more sellers will come to the market to balance other conditions.
Buyers will need to be allied with a talented professional agent to be successful and avoid overpaying. Flexibility and creative solutions will be essential to finding a home in our most competitive markets. Our professional Beverly-Hanks brokers stand ready to help you navigate these exciting, albeit challenging, market conditions.
All real estate is local. In order to make confident real estate decisions, it’s important to have timely and neighborhood-specific information. Request a Q1 2021 Real Estate Market Report from your Beverly-Hanks real estate agent.