The splendor of autumn reminds us of why we call Western North Carolina home. It makes sense that, historically speaking, fall is one of the most active seasons in our market. And, true to form, the pace of real estate sales is in good health, even amidst a season of change.
For a closer look at what’s happening in Western North Carolina, Allen Tate/Beverly-Hanks President Neal Hanks has delivered our Q3 2022 Market Report. When breaking down the markets, we examine four metrics: sales pace, supply of homes for sale, home values, and the cost of financing.
Look for the full report in our Market Research Center. Or contact your Allen Tate/Beverly-Hanks real estate expert to learn more about the up-to-date dynamics of your neighborhood.
WNC Regional Sales Pace & Supply of Homes for Sale
Across the country, the slowing pace of sales combined with a modest improvement in inventory is making for sensational news headlines when comparing this year to last. However, it is wise to note that 2021 was an outlier of a year—shattering real estate sales records across the nation. An analysis of long-term trends shows our market activity in a place of relative balance and health.
For sellers, we see a complicated, but positive, picture. Sales across the region were down 13.8% when compared to the same period a year ago. The number of homes on the market has gone up (14.3%) alongside a widening decline in sales (-10.6%) when compared to the first three quarters of 2021. While inventory levels have improved, we are still pacing below historic norms for market saturation. The advantage here continues to favor sellers.
It’s always important to note that supply varies widely by neighborhood. For instance, while there are more homes for sale across the region, inventory is down 8.3% in Henderson County. Buyers interested in Henderson County homes should still expect stiff competition.
WNC Sales Prices & Home Values
Taking sales pace and supply figures into account, demand remains the most telling point of influence in our market. Demand for homes in WNC continues to exceed supply, as evidenced by the increase in the median sales price at 13.3% year over year. That brings the median home sales price in the region to $410,000—a nearly $50,000 increase over last year.
In Buncombe, our most populous and in-demand county, the median sales price reached $450,000 in Q3. However, it did not see the highest median sales price; that award goes to Polk County, at $458,500. Record-breaking luxury sales and a continuing lack of affordable inventory contribute to the figure. 13% of homes sold in the county last quarter topped the $1 million mark. Rutherford County continues to be the most affordable in the region at $250,000.
According to the Federal Finance Housing Agency*, home values in the Asheville MSA appreciated 25.4% over the last year.
*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.
Cost of Financing in WNC
The last time inflation was this high, Ronald Reagan was in office, “Eye of the Tiger” was the #1 song on the Billboard charts, and Diet Coke had just hit the market. And mortgage interest rates were over 14%.
All eyes today are on interest rates as they continue to rise amidst ongoing concerns of inflation, supply chain issues, and the continuing war in Ukraine. Mortgage rates took a significant hike (hovering at 7%) in response to the Federal Reserve’s increase in the federal funds rate. The rising cost of borrowing money and its impact upon affordability is an undeniable fact and is certainly impacting sales trends. However, rising interest rates do not affect all buyers.
Cash sales make up 35–40% of Allen Tate/Beverly-Hanks transactions, even in the low interest rate environment of recent years. For many looking to purchase, the recent rise in interest rates will not change their need, desire, or ability to purchase real estate. On the other side of the coin, some homeowners will choose to stay in place longer because of the low interest rate that they currently have in place. This will be a factor in the amount of new inventory entering the market.
No matter where you find yourself on your home buying journey, a Beverly-Hanks Mortgage Services loan officer is here to help you navigate with perspective, understanding, and expertise.
What’s Next for WNC Real Estate?
As we head into the fourth quarter, we encourage you to consider trendlines over headlines. There are nuances at play in our local real estate landscape, and it is important to note that momentum remains strong, albeit at a significantly different pace than at this same time a year ago.
We believe that the softening of home sales will continue in the final quarter of 2022 and into 2023. Industry leaders agree. In the Quarterly Economic Outlook Report, the National Association of RealtorsⓇ noted that “home sales will pick up in the second half of 2023, but will be down by 7.1% overall.” We echo that prediction and so do the experts at Goldman Sachs, CoreLogic, Fannie Mae, Freddie Mac, and the Mortgage Bankers Association. According to Forbes, leading financial institutions anticipate moderate inventory improvements next year with demand driving home appreciation in the low single digits.
The days of skyrocketing listing prices and intense competition may be behind us for now, but the fact remains that the desire to live in the Blue Ridge continues to grow. No matter how you look at it, life in the Blue Ridge offers exceptional and enduring value sustained by distinctive cultural resources, natural beauty in 360 degrees, and endless opportunity for inspiration and investment. If we can assist you with your real estate needs, it would be our honor to do so.
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 Q3 2022 Real Estate Market Report from your Allen Tate/Beverly-Hanks real estate agent.
