So much is happening in real estate right now. But the biggest story continues to be the lack of available inventory and persistent, intense competition from home buyers.
For a closer look at what’s happening in our region, we’ve prepared our Q2 2021 Market Report. When breaking down the markets, we examine four metrics: supply of homes for sale, sales pace, home prices, and the availability of financing.
Read the full report in our updated Market Research Center. Or contact your Beverly-Hanks real estate expert to learn more about the up-to-date dynamics of your neighborhood.
WNC Supply of Homes for Sale
Understandably, frustration and fatigue are plaguing many buyers struggling to balance noticeably higher home prices and low supply. It would be easy to blame consumer frustration on sellers holding back inventory from the market. The reality is that there were notably more homes listed in the first six months of this year than in 2020. And yet, the number of homes on the market is down 42% from this time last year.
It’s a perfect storm of variables that have led to the surging sales pace resulting in inventory shortages.
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 Regional Sales Pace
Demand generated by the most significant demographic cohort in history moving into its peak home buying, coronavirus-related preference changes, and decades of “underbuilding” are driving intense demand for homes across Western North Carolina.
Year-to-date closed sales across the nine-county region are up an incredible 36% compared to last year. This persistent demand is driving the median sales prices up in many neighborhoods higher than we’ve ever seen. And experts do not expect demand to slow anytime soon.
Goldman-Sachs is telling their clients that a “strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically low mortgage rates had pushed demand to high levels. Consumer surveys indicate that household buying intentions are now the highest in 20 years.”
Moreover, there is nothing on the horizon to suggest that buyers’ appetite for our region is on the wane. Our brokers report a continuation of robust demand and intense competition from buyers to win houses. Bidding wars, all-cash offers, and contingency concessions are increasingly common. Experienced brokers are helping their buyers think creatively so that their offers can stand out. The difference between getting that dream home or ending up empty handed again could be a talented real estate professional on your side.
WNC Home Values
Those who remember the housing bubble of 2006 and 2007 may be nervous as home prices soar. According to the Federal Finance Housing Agency*, Asheville MSA’s homes appreciated 8.2% over the last 12 months. We know the previous bubble was fueled by speculative buying, which is nowhere near as prevalent today due to current conservative lending standards. Instead, the significant appreciation we’re seeing is a clear reflection of supply and demand.
Bill McBride from the blog calculatedrisk.com said, “If inventory increases slowly, house prices will continue to rise rapidly. And if inventory rises sharply, house price growth will slow.”
We expect home prices to continue rising. In fact, the median sales price of a home in WNC has risen 29% from last year to $355,000. In Buncombe, our most populous and in-demand county, the median sales price reached $393,500 last quarter. Rutherford County continues to be the most affordable at $247,000.
If you’re thinking about buying, do it now. We are not suggesting that home price appreciation will maintain its current pace, but all indications are that home prices will continue to rise.
*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.
Availability and Cost of Financing in WNC
Before the pandemic and the government’s interventions in the mortgage market, you could make reasonably educated predictions about mortgage rates. Typically, mortgage rates trend up when our economy is doing well and down when it’s in trouble. Now, there is uncertainty in the labor market and growing inflation concerns. That means the markets can only be used to estimate the direction of mortgage rates, at best.
Mortgage rates crept up across the board in the week ending June 24. But nobody can claim with certainty what will happen to mortgage rates in the coming weeks. Economists from Fannie Mae, Freddie Mac, and the Mortgage Bankers’ Association have teams dedicated to monitoring the economy, housing, and mortgage rates. By looking at their collective forecasts, we can say that mortgage rates are expected to begin moving more definitively later this year. Most experts are predicting that when rates begin moving, market conditions will likely push them higher.
Speak with your Beverly-Hanks Mortgage Services loan officer today. During these times of instability, it’s far better to work with an experienced loan officer you trust. Your LO can help you save a quarter point in interest or reduce your closing fees to effectively save thousands of dollars over your mortgage’s term.
What’s Next for WNC Real Estate
Based on the first half of the year, we believe three trends will continue through 2021:
- The allure of our region’s high quality of life.
- Historically low inventories.
- Strong demand across all sectors of the WNC housing market.
The possibility of rising interest rates could hobble the galloping sales pace, but all indications show that demand will remain strong.
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 dynamic, 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 Q2 2021 Real Estate Market Report from your Beverly-Hanks real estate agent.