Western North Carolina’s Housing Market Holds Steady
Western North Carolina continues to see supply constraints in the housing market, but has steadied somewhat as demand continues to push values higher across the region. The outlying emerging markets such as Haywood, McDowell, and Cleveland Counties are experiencing strong tailwinds which are propelling sales activity to levels not seen in previous generations. Thin inventory in areas such as Asheville and Charlotte have pushed buyers into these outlying markets which are therefore seeing unprecedented sales activity and rapid appreciation. Moving forward in 2022, the availability of inventory will play a key role in sales since demand remains high in many markets across Western North Carolina.
Buncombe County continues to see vigorous sell-through at both the mid-market and luxury price points. Showing activity is significantly up in both segments. The luxury market ($1M+) saw only a 4% rise, while the mid-market segment jumped 36%. Active inventory is very sparse and will play a key role influencing the middle and year end numbers.
City of Asheville
The City of Asheville continues its ascent, with both mid-market and luxury home sales up versus the same time period in 2021. Property values have skyrocketed over the last 24 months caused by increased demand and decreased inventory (still hovering at all time lows). Showings in the luxury market have jumped 28% year over year which indicates a strong demand moving into the 2nd and 3rd quarters of 2022. With increased demand and limited stock, we expect to see a continued rise in home values across the city.
Inventory in the North Asheville market area is at an all time low. It has begun to affect showings and sell through in the $500k-$999k price point as noted by zero active homes currently on the market. Home values continue to rise at a rapid pace due to strong demand in the $1M+ market. As a result, we saw a 60% increase in closed sales volume in the first quarter of 2022 vs 2021. Showings in the luxury market are also up by 67% year over year which points to a strong demand leading into the latter part of 2022.
Biltmore Forest is another area starting to see a decrease in sales due to low inventory, rapid value appreciation, and a lack of infill development to create new home inventory. Luxury sales have dipped by 3 units in the 1st quarter of 2022 versus 2021. This could be a blip on the radar, but it could also have staying power if active inventory continues to lag behind. Pending sales are a bright spot with 4 homes over $1,000,000 currently under contract.
Steady is the name of the game in the Arden area as both mid-market and luxury sales are up slightly over the first quarter of 2021. What’s more insightful is the huge jump in pending sales in the mid-market range ($500k-$999k) especially with 44 homes under contract, only 13 homes active on the market, and showings up more than 50% year over year. This is a definite recipe for bidding wars and escalating prices moving forward in 2022.
The mid-market is up across the board with sales up almost 25%, showing activity up 20%, and 22 pending sales currently. Low inventory and surging prices have begun to affect the Fairview/Fletcher luxury market with sales down more than 50% and showing activity down 19%. With only two active listings currently over $1M, it’s no surprise that low housing stock has started to stifle the luxury sales in Fairview and Fletcher. Demand appears to be strong, but without available homes, we will continue to see sales numbers down year over year.
Strong demand and pending sales are the common theme in the downtown condo segment of the market. With many new construction starts in downtown, it’s no surprise that pending sales are through the roof, with 19 in the mid-market range and 9 in the luxury price point range. As a comparison, we only had 10 ($500k-$999k) sales and 1 ($1M+) sale in the first quarter of 2022. A quick scan of the Asheville skyline reveals new buildings popping up all over, which points to increased demand and more inventory in the coming months.
Sales are up across the board in Henderson County. More buyers have pushed out into neighboring counties to find homes that meet their criteria, especially as housing stock in Asheville and Buncombe County have continued to contract. Having close proximity to the Asheville airport, Downtown Asheville, and Downtown Greenville, buyers have discovered this hidden gem. Pending sales have exploded which bodes well for continued robust sales activity in both the 2nd and 3rd quarters. It will be interesting to see over the next few months if inventory will be able to keep up with the increased demand across Henderson County.
Foothills (Polk, Rutherford, Cleveland Counties)
The Foothills region is off to a great start in 2022 with the number of luxury home sales more than doubling year over year in the first quarter. All key indicators are pointing towards a healthy 2nd and 3rd quarters with 12 pending sales in the luxury segment and 53 pending sales in the mid-market segment. These emerging markets are prime for new development that will ease the thin inventory across Western North Carolina.
While both closed sales and pending sales are up in most of the segments outlined above, it will be interesting to keep an eye on housing supply, interest rates, and home values over the upcoming weeks and months. The FED has started to increase interest rates and the mortgage industry has followed. Mortgage rates hit 5% for the first time since 2011. These factors, combined with a short supply of housing stock, could set the table for a slowdown in the housing industry, specifically in the mid-market segment. The luxury segment is known to experience many cash transactions and thus is somewhat insulated from large fluctuations in mortgage rates. However, the luxury market does remain heavily tied to the financial markets which have been sporadic over the last few months.