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Home shortage skyrockets Asheville, Buncombe prices
With no new supply in sight, persistent low inventory means buying a house will become only more expensive.
Here are a few of the realities confronting homebuyers in Asheville and Buncombe County:
About the only housing-market category record that won’t be set this year is the lowest-ever inventory for houses priced at $1 million or higher.
Local homeowners looking to stay in the area and purchase a bigger place are better off building additions or renovating the houses where they live now – or move to a neighboring county.
Even if they sell their current residences at a profit, that money likely won’t be enough to find nearby homes with more space in their price ranges.
To put it simply, the number of houses available to buy continues to drop and “that’s driving prices up,” said Neal Hanks, president and principal owner at Beverly-Hanks & Associates Realtors in Asheville.
“That’s the big story,” Hanks said.
Despite mammoth demand that for months has spurred bidding wars for houses with asking prices up to $800,000, builders have not responded with large-scale new-home construction.
When housing inventory exceeds six months, home prices generally drop, said Mike Figura, owner and broker of Community Lifestyle Mosaic Realty in Asheville. When inventory tumbles below six months, prices generally rise.
Asheville inventory levels stood under six months at all price ranges below $700,000 as of the beginning of this month, according to Figura's data. The figures ranged ranged from 0.46 months for homes that cost $100,000 or less and 5.39 months for homes that cost between $600,001 and $700,000.
All homes in Buncombe County, excluding Asheville, priced up to $400,000 as of Oct. 1, showed inventory levels below six months. Totals ranged from 1.84 months for those between $150,001 and $200,000 to 5.38 months for those between $300,001 and $350,000, Figura's data showed.
“(Builders) aren’t willing to take on speculative construction because it’s a risk,” Hanks said.
Many spec builders went out of business, or watched colleagues go out of business, because of the Great Recession.
“That still stings,” Hanks said.
But Don Davies said spec construction might be the only way to avoid high home prices persisting into 2017.
The founder of Realsearch, an Asheville company that analyzes real estate trends, said ongoing low inventory could stall the local real estate market.
“We’ll be floating around those prices next year,” Davies said.
Land sales of 2- and 3-acre lots that have been on the rise could be an indication that people are looking at spec building, he said.
But if that doesn’t manifest, Hanks said it could be a result of builders knowing that the real estate market is cyclical.
The industry has been healthy for about four years now, he said.
“It can take four to seven months to build a house,” Hanks said. “A lot can change in the economy during that time. People are wondering whether we’re at the end of this cycle.”
That being the case, median days on the market for available houses have plummeted by 60 percent in Asheville and Buncombe County, said Steve Heiselman, a broker for Town and Mountain Realty in Asheville.
Median days on the market in Asheville dropped to 21 during this year’s third quarter from 53 during the third quarter of last year, Heiselman said.
For the same year-over-year comparison in Buncombe County, median days on the market plunged to 25 from 61, Heiselman said.
Davies said home-buying in Buncombe has become “like a frenzy.”
To those looking for their first house with a $200,000 budget, he said, “If you find one at that price in decent shape, you have to buy it that day, literally. You don’t have time to sit around and think about it or you’ll lose it.”
Asheville and Buncombe County’s steady march into an ever stronger sellers’ market is not new.
But some statistics within that phenomenon still may surprise local real estate professionals.
For example, Asheville’s median home sale price of $284,700 during the third quarter leapt 5.2 percent higher than the second quarter median price of 269,900.
“That’s a significant jump over three months,” Figura said.
Figura and Hanks offered different strategies for local homeowners who want more space.
Putting an addition onto an owner’s current house is a way to stay in Asheville and Buncombe County, Figura said.
Hanks, however, pointed out that the median selling price during the third quarter for a house in Haywood County was about $70,000 lower than one in Buncombe County.
“It’s not that far away and the quality of life is similar,” Hanks said. “People have shown all around the country that they’re willing to drive 25 to 30 minutes to get where they want to go.”
BY THE NUMBERS
Some records set in the Asheville and Buncombe County housing markets during the third quarter of 2016
- Highest home sale median price in Asheville: $284,700.
- Highest home sale median price in Buncombe County, excluding Asheville: $252,000.
- Lowest average days on the market for homes in Asheville: 55 days.
- Highest average asking price of all 1,413 homes in Buncombe County, including Asheville, as of Oct. 6: $600,889.
- Highest average selling price of all homes in Buncombe County, including Asheville, during the first three quarters of this year: $309,497.
- Highest average selling price of all homes in Buncombe County, including Asheville, sold during the last 12 months: $306,167
- Highest median selling price of all homes in Buncombe County, including Asheville, during the first three quarters of this year: $252,250
Sources: Don Davies, founder of Asheville-based Realsearch; Mike Figura, owner and broker of Community Lifestyle Mosaic Realty in Asheville