Western North Carolina sales steady in Q3 of 2021
With Asheville and surrounding areas showing steady gains, it’s no secret that the housing market continues its ascent. As air travel picks up steam, tourists continue to flock to the Western North Carolina mountains. Many migratory buyers have existed the larger metropolitan areas to find a heightened quality of life while being in close proximity to regional and international airports, world class dining, and a plethora of visual and performing arts.
The Asheville area continues to build on strong 1st and 2nd quarters, with both luxury ($1M+) and mid-market ($500k-900k) segments showing gains in the third quarter of 2021. The mid-market sales were up 36% over 2020. The luxury market saw an increase of 25% over the Q3 2020 sales tally. Showing activity has remained flat, as we saw a 2% increase for showings of luxury homes in the third quarter of 2021 year over year. Active inventory in both the mid and luxury markets is historically low and could affect sales volume in both price points in the coming months.
Buncombe County showed tempered increases in sales, pending sales, and showing activity across the board. Sales in the luxury space have risen with 77 closed transactions $1M+, while only recording 58 in 2020. We believe this is fueled by out of state buyers looking for a refuge in the mountains, while still being close to national and international airports that are convenient for both work and travel. Closed sales volume in the luxury market is up 33% year over year.
North Asheville continues its steady hand in the luxury market. Inventory in North Asheville is limited however, we are seeing sell-through at a rapid pace. Showing activity is slightly down as demand for neighborhoods such as Lakeview Park and Grove Park continue to climb at a dependable clip. North Asheville for the most part is built out, therefore new construction starts are few and far between, and we expect values to rise as inventory holds at historic lows. The mid-market in North Asheville also saw a jump in sales with 44 closed transactions, as opposed to 38 in 2020.
Active inventory in the Arden market is sitting at historic lows while demand has increased year after year. This will continue to be the trend for months to come, but is expected to be hedged by many new construction starts in communities like The Cliffs at Walnut Cove. Luxury sales are down 13% versus 2020, while the mid-market stays hot with 25 sales, up 79% from 2020 numbers. With pending sales also trending higher in the luxury space, we expect to see a robust 4th quarter with closed sales activity.
The luxury ($1M+) segment of Biltmore Forest has recorded a stable third quarter for 2021. Eight homes over $1M have sold while an additional 4 are currently under contract. Showing activity continues its dependable path. With over half of the closed sales being cash transactions, we expect to see continued elevated activity in Biltmore Forest for months to come.
Henderson County has historically been a strong second home market in both the luxury and mid-range segments. As vaccination rates climb, and national as well as regional travel continues to set records, it’s no surprise the Henderson County market showed an increase in mid-market transactions. Compared to 2020, the mid-market saw an increase of 25% in closed sales, totaling 122 transactions. The luxury market was anchored with 13 closed transaction compared to 13 sales in Q3 of 2020. Pending contracts in the luxury segment currently sit at 7. Showings are up across the board which could lead to elevated sales in the fourth quarter of 2021 and beyond.
Foothills: Polk, Rutherford, Cleveland Counties
The Foothills market has continued its meteoric rise as buyers from larger, regional metropolitan areas such as Charlotte and Greenville continue to migrate to the region. Home sales in the luxury and mid-market range have increased in all three quarters of 2021 thus far. Currently 34 homes in the $500-999k range are under contract and 13 in the $1M+ range. Keep an eye on the Foothills region as it is expected to grow as more buyers discover this hidden gem.
Market Forecast & Predictions
2021 has proven to be a great year for real estate across Western North Carolina. Sales are up in many segments across the region. With stock market stability, we expect to see steady demand that will propel real estate sales through the 4th quarter of 2021. While supply concerns become the norm, we anticipate that demand will continue to rise and force values higher in the short term. Interest rates have started to tick up in recent weeks which could adversely impact new home starts moving into 2022. We could see a slight pull back if credit markets start to tighten or the Federal Reserve begins to taper its mortgage-backed security buying, as indicated in recent meetings. Moving into early fall, we will keep our eyes on showing trends, inventory levels, and overall market demand to gauge how we’ll finish the year as an industry.