As many industry pundits predicted at the end of 2021, a declining supply of homes for sale has slowed last year’s unprecedented sales pace as we begin 2022. According to the National Association of RealtorsⓇ, pending home sales slipped for the fourth consecutive month in February, largely due to low inventory. “Buyer demand is still intense, but it’s as simple as ‘one cannot buy what is not for sale,'” said Lawrence Yun, NAR’s chief economist.
For a closer look at what’s happening in Western North Carolina, we’ve prepared our Q1 2022 Market Report. When breaking down the markets, we examine four metrics: sales pace, supply of homes for sale, home values, and the availability of financing.
Look for the full report soon in our Market Research Center. Or contact your Beverly-Hanks real estate expert to learn more about the up-to-date dynamics of your neighborhood.
WNC Regional Sales Pace and Supply of Homes for Sale
In our nine-county region, home sales slid by 6.6%. 2,350 homes sold in the first quarter of 2022, compared to 2,518 homes in the first quarter a year ago. Demand remains extremely high, as evidenced by the fact that many properties are receiving multiple offers as soon as they hit the market. The bottleneck to a more successful sales pace is the very limited supply of homes available. While inventory is traditionally at its lowest point in the first quarter of the year, the inventory of homes for sale in the region is down 28% from the same quarter of 2021.
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
It’s no secret that low inventory and high demand have led to a rapid increase in home prices. According to the Federal Finance Housing Agency*, home sale prices in the Asheville MSA increased 17.5% in 2021, one of the highest appreciation rates seen in our region. Interest rates have also been on the rise and are expected to remain above last year’s low levels for the balance of the year.
In WNC, we saw the median sales price of a home rise 13.0% in the last year to $370,000. In Buncombe, our most populous and in-demand county, the median sales price reached $420,000 last quarter. Transylvania County currently tops our list with a median sales price of $463,000. Both figures are in large part thanks to the record-breaking luxury sales that have continued into this spring. Rutherford County continues to be the most affordable in the region at $235,000.
Ironically, rising prices and the higher borrowing costs could propel even more buyers into the market this spring. Fear of missing out is a powerful driver of sales. At the same time, some sellers looking to move or downsize may see this as their best opportunity to get top dollar for their houses, which would add much-needed inventory to the marketplace.
*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 lags our local MLS data by one quarter.
Availability and Cost of Financing in WNC
Mortgage rates have been on the increase in 2022, particularly so in the last month of the quarter. As of this writing, 30-year conventional loan rates inched over 5% for the first time in a decade. The rising rates have brought changes to the industry: an obvious decline in refinances and changing preferences in purchase loan product types. Higher rates are increasing borrower interest in ARMs, according to the Mortgage Bankers Association. In addition, government-backed applications are also grabbing a slightly larger share of applications.
With inflation expected to continue throughout 2022, mortgage rates are predicted to hover around 5% for the balance of the year. While higher than we have been accustomed to in recent years, these are still historically favorable mortgage rates. As purchasers seek options to mitigate the rising costs of a mortgage loan and to submit competitive offers to purchase, the guidance of an experienced mortgage professional is of paramount importance. For professional guidance and current mortgage advice, contact a Beverly-Hanks Mortgage Services loan officer today.
What’s Next for WNC Real Estate?
The Carolinas remain one of the most desirable areas of the country in which to live. And recent increased buyer preferences toward suburban and small-town communities that offer high quality of life and abundant outdoor recreation opportunities will continue to support a robust real estate market in WNC.
While it remains an extremely competitive market, much of it is driven by a new generation of home buyers. As older Millennials (aged 32–41) reach the point where their career and family plans are starting to gel, they and younger Millennials (23–31) now make up 43% of home buyers. This is the largest among the generations and up from 37% just a year ago, according to NAR. This large segment of the buying population will certainly be impacted by declining affordability created by both rising interest rates and prices. Therefore, home sellers are entering a new era and will have to carefully consider the changing market conditions when pricing property in order to continue to attract buyers.
It is a dynamic time in the real estate industry, and the guidance and counsel of a skilled real estate professional has never been more valuable. It would be our honor to assist you with your real estate needs, whether buying or selling real estate in this beautiful area we are fortunate to call home.
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 2022 Real Estate Market Report from your Beverly-Hanks real estate agent.