Today, the warm summer weather continues its long run, as does the exceptionally robust regional real estate market. But, just as the signs of fall faithfully begin to appear, the local real estate landscape is signaling change. And we think this change is a good thing.
For a closer look at what’s happening in Western North Carolina, Beverly-Hanks President Neal Hanks has delivered our Q2 2022 Market Report. When breaking down the markets, we examine four metrics: the cost of financing, home values, sales pace, and supply of homes for sale.
Look for the full report 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.
Cost of Financing in WNC
Rising interest rates are a key factor to watch as the marketplace begins to shift. In response to slower global growth, renewed supply-chain constraints due to the war in Ukraine, the booming job market, and inflation mounting to a 40-year high, mortgage rates have spiked more than two percentage points. However, the Fed is working to moderate mortgage-backed securities, so we expect the rate to bounce around through the end of the year.
Affordability will continue to be a factor for many consumers in the season ahead. Low housing inventory and elevated home appreciation will heighten the impact of rising mortgage rates, tempered somewhat by a healthy job market. Other balancing factors include an influx of younger home buyers accelerating housing demand.
In terms of lending solutions, financial professionals are seeing a resurgence in popularity of the Adjustable Rate Mortgage (ARM) as a countermeasure to increasing fixed rates. With diligence and education, the ARM can allow a buyer to leverage their purchasing power and get more house despite the rising rate environment.
Beverly-Hanks Mortgage Services helps buyers maximize their purchasing power by offering a wealth of product options and helping to ascertain which solution is the best fit. For professional guidance and current mortgage advice, contact a Beverly-Hanks Mortgage Services loan officer today.
WNC Home Values
Higher interest rates make headlines and keenly impact buyers. However, it may be surprising to learn that home prices are continuing to climb in WNC, despite rate hikes. This is certainly a dynamic to watch.
According to the Federal Finance Housing Agency*, home values in the Asheville MSA appreciated 22.8% over the last year. Based on our MLS data, the median home price in the region rose 16.9% from the end of Q2 2021 to now. That brings the median home sales price in the region to $415,000—a $60,000 increase since last year. Record-breaking luxury sales and a continuing lack of affordable inventory contribute to the ongoing trend.
In Buncombe, our most populous and in-demand county, the median sales price reached $465,000 in Q2. Rutherford County continues to be the most affordable in the region at $282,450.
*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.
WNC Regional Sales Pace
It is important to note that residential unit sales have slipped slightly from the all-time highs experienced in 2021. But the fact remains that demand continues to outpace the supply of homes for sale. Strong demand in our area is pushing prices steadily upward and keeping time on the market historically low. What that looks like here at home is an average of 26 days to closing, compared to 44 at the same time last year. We remain in an advantageous time for sellers.
Early indicators of change are beginning to emerge. Residential unit sales have dropped 10.1%, and for the first time in a very long time, we have begun to see new listings outpace sales. This is the first step to closing the gap between available inventory and demand. At Beverly-Hanks, we see this as a positive development and an indicator of increased balance and opportunity arriving in the marketplace.
WNC Supply of Homes for Sale
Overall, there is one more home for sale this year (1,640) than at this time last year (1,639). What is essentially a flat metric is a welcome change from the years of declining inventory we have seen. However, it’s important to note that supply varies widely by neighborhood. For instance, there are 29% more homes for sale in Transylvania County now than this time last year, and 20% fewer in Henderson County.
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.
What’s Next for WNC Real Estate?
Has the opportunity to sell passed? We don’t think so, especially when the demand to live in WNC remains strong in a region where quality of life, economic opportunity, and expansive cultural offerings are set against a stunning Blue Ridge Mountain backdrop.
While the last few years have been a great time to be a seller in the real estate market, it has been a very challenging period for buyers, especially first-time home buyers or those in the more moderate price ranges. Some homeowners are anticipating the impending shift and getting their homes on the market as they track dips in consumer confidence, inflation, and climbing interest rates.
Looking at the big picture, social factors are also influencing and pushing strong demand. Increased mobility of a work-from-anywhere society means that our region will remain popular among those seeking to relocate. Unemployment remains historically low, and Millennials with families are ready to own a home. It is still a great time to sell, as we remain firmly in a seller’s market.
Investment in WNC remains a wise and prudent move. We anticipate that the rate of appreciation will moderate toward more historically normal levels, in the single digits. However, overall, home and property values are not likely to fall. All in all, a little cooling in the real estate markets is a healthy thing. A little cooler weather in the mountains this fall will be welcome, as well.
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 2022 Real Estate Market Report from your Beverly-Hanks real estate agent.