'Seller's market': Asheville housing market sees high interest, higher price, reports show
ASHEVILLE - Asheville has continued to face high demand for city homes, despite a lack of sellers, recent data from regional realty company Canopy MLS suggests.
The demand comes as interest rates for an average 30-year mortgage ended at an average 7.18% the week of Aug. 31, up 1.5 percentage points since 2022, according to Freddy Mac, the Federal Home Loan Mortgage Corporation chartered by Congress in 1970.
A July 2023 report by Canopy MLS saw a moderate uptick in home prices for the city of Asheville, where the median sales price rose year over year around $20,000, or about 4.3%, to a total median price of $490,000.
The average list price for July was $709,420, up around 11.8% from July 2022. Median is different from average in that it means half of homes listed are above this price, half below.
“Buyer demand continues to be concentrated in metro Asheville, which puts buyers closer to job centers and amenities. Unfortunately, the market is not seeing as many sellers at this point, willing to become move-up buyers because of higher rates, and that means the market will remain tight and competitive, especially in the city of Asheville,” Christine Mallette, a member of the Canopy MLS board of directors, said in a news release.
The Citizen Times previously reported that homebuyers have recently paid around 2.7% under the list price in June 2023. This trend continued in July, where homebuyers paid 2.7% below list price, a difference of $13,230 for the median sales price.
Asheville Q1 report: Asheville, Buncombe see record high Q1 median home sales prices; When will prices drop
Canopy MLS is not the only company reporting similar changes in the market.
A second-quarter report by Western North Carolina’s largest real estate operation, Allen Tate/Beverly-Hanks, showed a similar trend, where low inventory posed serious challenges for homebuyers.
Allen Tate/Beverly-Hanks reports that houses between $300,000 and $800,000 have a 99% list-sell ratio, meaning practically every house listed in that range sold in the second quarter. This high list-sell ratio qualifies those price ranges as a "seller's market" in the report.
“Low inventory remains our most persistent challenge. Although slightly improved from a year ago, the local market sits far below what would be considered normal inventory levels,” Neal Hanks, president of Allen Tate/Beverly-Hanks, said in the second-quarter report.
While overall house prices from 2022 to 2023 have seen a “moderate” uptick, median home prices between July 2022 and July 2023 rose 18.5%, an $85,000 bump, according to Canopy MLS.
For Canopy MLS, the data indicates that market's struggle currently might be a lack of inventory, as noted by a drop in new listings from 2022 to 2023.
“Buyers are still looking for homes and the overall sales activity we are experiencing is still healthy; in fact, sales could have been much stronger in the MSA had there been more inventory. And though prices are still rising modestly, the boost in home prices continues to have a positive effect on home equity for homeowners,” Mallette said in the release.
Homeowners face inconsistent interest rates
High interest rates have led many to hold onto their properties in Asheville, said Mike Figura, owner of Asheville's Mosaic Lifestyle Community Realty.
"Interest rates were so low for so long, that there's a large portion of the population that locked in at very low interest rates. And that's an asset that, if you sell your house, then you lose it," Figura said.
Mosaic Realty also releases a second-quarter report that analyzes housing market trends like median price and inventory.
With recent changes in interest rates, Figura said it's hard to tell when prices might get better — and if they will get better. A moderate change in interest rate can have quick effects on the market, Figura said, making this particular market hard to define.
"We can make a general statement: The market is a seller's market," Figura said. "And it's a very tight market right now, but you really have to pay attention to interest rates."
For homebuyers, Figura suggested looking at spots in the market where interest rates have dropped suddenly, which would allow new homeowners to lock-in at lower rates.
"Did interest rates just drop a half a percent within the last week? Or do they raise a half a percent, because it can cool the market and quiet the market really quickly, and speed the market back up really quickly" Figura said. "It's kind of like you're driving with a teenage driver right now: accelerating really quickly, and then slamming on the brakes, and accelerating really quickly and slamming the brakes."
As for affordability, while a lower interest rate may allow buyers on the sidelines to participate, Figura doesn't see prices going down, especially given recent demand and an increase in construction costs.
"I don't see prices dropping in our market," Figura said. "The only thing that I think could drop prices significantly would be a giant influx of houses, and it's just really hard to see that happening."
Sales, Listings
All numbers are according to the Canopy MLS July 2023 market report.
City of Asheville
Median sales price
2023: $490,000 (+4.3%)
2022: $469,778
Average list price
2023: $709,430 (+11.8%)
2022: $634,742
New listings
2023: 1,299 listings (-17.7%).
2022: 1,579 listings
Buncombe County
Median sales price
2023: $460,950 (+4.6%)
2022: $440,750
Average list price
2023: $659,741(+11.6%)
2022: $591,363
New listings
2023: 2,594 listings (-20.5%).
2022: 3,264
More: BeLoved takes Asheville's housing crisis into its own hands. What else is being done?
Asheville Metropolitan Statistical Area (Buncombe, Haywood, Henderson and Madison counties)
Median sales price
2023: $430,000 (+4.9%)
2022: $410,000
Average list price
2023: $599,946 (+11%)
2022: $540,696
New listings
2023: 4,874 (-17.1%)
2022: 5,879
June 2023 home prices: Asheville home buyers no longer paying over asking price, on average; home prices $644K
Will Hofmann is the Growth and Development Reporter for the Asheville Citizen Times, part of the USA Today Network. Got a tip? Email him at WHofmann@citizentimes.com.
This article originally appeared on Asheville Citizen Times: Asheville homebuyers face high interest rates, high demand, volatility
