Written by Bill Fishburne
You Snooze, You Lose
Last year, 2017, was another banner year for real estate in Western North Carolina. In 2016 we reached and exceeded pre-crash sales levels in all measures. In 2017 we exceeded 2016 in every category except inventory, which was down 10.9% from the year-before period. But as indicated by record sales, buyers are still finding their dream houses in the mountains, so the tight inventory has not yet damaged sales.
Defining the Terms
The Western North Carolina Regional MLS (WNCRMLS) system includes Buncombe, Henderson, Haywood, Transylvania, Polk, Rutherford, and Madison counties. The larger metropolitan areas and townships are Asheville, Hendersonville, Waynesville, Maggie Valley, Brevard, Saluda, Lake Lure, Weaverville, Rutherfordton, and Black Mountain, plus other named locations that may not be populous, but do have their own local flavor. Who’s in and who’s out of the system is determined by the local Boards of Realtors. Some determine to affiliate with WNCRMLS, while others, in Boone for example, choose the more local High Country system. We can’t cover the entire state in this roundup so we limit ourselves to the WNCRMLS system, which in turn is managed for the local board of Realtors by the Charlotte Regional MLS.
Our survey includes all single-family dwellings and condominium units. It does not include apartment houses or multi-unit condo buildings. Sales in 2017 were so good that they clearly exceeded those for any previous year, going back to the first days they started counting. Sales prices were also higher and there were fewer distressed property sales than there were at any previous period, including the real estate collapse of 2006-13. Finally, the outlook for future sales is better than at any time in the preceding 12 years.
This report focuses on what did and did not sell, what is still on the market, and what expectations we have for the market in 2018 based on the market history and trends along with current U.S. economic trends (both positive and negative). Please recognize that these figures are subject to adjustment even as the data is presented. Sales reported in late December are volatile as the first two or even three weeks of 2018 roll by. Our snapshot data and charts were taken with sales as reported through January 5, 2018.
With that, let’s get started.
OVERALL MLS FIGURES
If you could buy an average house in an average location at an average price in Western North Carolina, it could best be described as follows: It sold for $291,000; it had three bedrooms and two baths; it measured 1,941-sq.- ft.; the asking price in the MLS was $310,500; the location was probably 25 miles from downtown Asheville.
The prices are from the MLS, and the distance from downtown Asheville is being drawn from several regional figures which show real estate average prices decline the further you get from the heart of our regional economic center. People want to live near where they work. Tele-commuting handles the business end of many new jobs but ignores the social benefits of communities with cultural opportunities. Finally, there are average houses and there are houses that are above and below average. We hope this guide gets you going in the right direction.
Realtors in Buncombe County sold 4,045 residences in 2017 versus 4,135 in the prior year, a decline of 2.2%. The continuing shortage of inventory probably receives credit for most of that loss along with the resultant higher prices. At the end of 2016, there were 1,400 homes/condos for sale in Buncombe County versus 1,399 in 2017, a 4.1-month supply which is up slightly from the year-prior period when the supply was just 3.9 months. The median sales price was $253,300 in 2016, but increased to $275,000 in 2017, a staggering 8.6% upkick. The average prices kept pace with $310,853 in 2016, rising 8.9% to $338,642 for 2017.
Buyers coming into the area are learning there isn’t any type of “RESET” button to change market dynamics. Fewer housing starts mean fewer new homes and therefore higher prices for existing homes. And while sellers see dollar signs in their eyes when they hear what houses are going for in their neighborhoods, they also see higher replacements costs. The downsizing family can do okay in this market, getting $400,000, for example, for the 1960s brick rancher they paid $250,000 for ten years ago. But how do they replace it? Most don’t want to go to an apartment, just as they don’t want to move to a condo with high association fees. The answer is to downsize or even to move to a nearby community with lower prices. If you look at the traffic on I-26 and I-40, you might get the idea that a 30-minute commute to Haywood or Henderson County is the option many buyers have chosen. As you will see as we look through the market data, prices are lower in the outlying communities, but you do pay a price in commuting time, you miss out on some of Asheville’s wonderful day-to-day events, and it often just isn’t practical when your planned-for 30-minute commute turns into a no-apparent-reason 90-minute traffic jam.
Seen as a subset of Buncombe County, the region’s primary economic engine has higher prices to match its dynamic business and cultural lifestyle. The median price for a home in Asheville increased 7.4% in 2017, from $269,900 to $290,000, while the average price went from $327,104 to $364,047, a move of 11.3%. Those are the highest numbers in the Western North Carolina region.
Asheville is a delightful place to live. From the business and employment opportunities of downtown to the cultural events that make you grab your tuxedo, to the quirkiness of West Asheville and the elegance of Montford and North Asheville, the city is highly desirable. Growth happens, but still the city has an Art Deco flavor that is a feast for the eyes. And have you ever seen a more gorgeous city hall, an uglier courthouse, or a more elegant high school? You can walk from a downtown condo to everything you’re likely to need this week or month. And if you are concerned about schools, Asheville has some of the best in the state. But the housing market is still tight.
Asheville had only 655 homes for sale at year’s end, an increase of 20 units, or 3% from 2016. That represents a 3.7-month supply at the current sales rate. The market does move quickly. A glance at the real estate ads on Friday probably won’t show you all the houses that are on the market in your range come Sunday. Nor will it show you those that went under contract in the previous few days. It is best to set yourself up with a search engine or ask your Realtor to do it for you so every morning you get the new listings in your email or text message box. You snooze, you lose.
Living in Waynesville, Canton, Clyde, or even out in Maggie Valley can be a viable proposition for someone who works in Asheville. Certainly it’s not always convenient, but there is a great lifestyle and “feel” in Haywood that can make the driving very much worth it. And the views? “Oh my gosh,” as one client said, “this is to die for!” Waynesville has a terrific Main Street that is unchallenged in the area (except in Hendersonville) for walkability. It exudes small town charm with local stores, local banks, lots of churches, great little “secret” restaurants, and more. It’s like the theme song for Cheers says: “Where everybody knows your name.”
The average home in Haywood county last year sold for a very affordable $223,291, an increase of 7.3% over 2016. The median sales price was $194,750. There were 1,118 homes sold during the year, up 9.1% from 2016. This was particularly good news in that Haywood seemed to have a surplus of houses in 2016, with 781 units for sale at year’s end, and that has now been reduced to just 597 units, a decline of 23.6%. Maybe you’d better rush on out there. Houses are selling and the current 6.5-month supply of inventory is going fast. That figure is down 28% from 2016.
Henderson County offers multiple incorporated communities within the county limits, each with its own personality and lifestyle. The county seat, Hendersonville, has a year-round population of 13,000 souls who enjoy mountain life at a bit slower pace than in their neighbor to the north, Buncombe County. Main Street in Hendersonville is a wide, serpentine road with pedestrian walkways on both sides and is fronted by locally owned shops and restaurants. As one visitor said at the end of his first visit to find a house, “Any town with two Irish pubs has a lot going for it.” (In fact, there might be four, but who’s counting?)
The town of Fletcher borders with Buncombe County in the Arden and Fairview communities and is often seen as a haven for commuters working in the South Asheville area. That can easily include the Mission Health Care system near downtown Asheville, plus all of the Biltmore areas (Estate, Village, Forest, Park). The Asheville Regional Airport was carved out of Henderson County in the Fletcher area, making it wholly in Buncombe County and very convenient with I-26, US25, and NC280 all running right to the airport entrance. Further west lies Mills River, an incorporated area that includes Sierra Nevada Brewery, most of High Vista Country Club, and the Walnut Cove community. Mills River follows NC191 through some beautiful farm country along the French Broad and back towards Hendersonville. Further south lie Etowah and Horse Shoe, with Laurel Park, Flat Rock, and other locations all having unique personalities.
There were 2,038 homes sold in Henderson County in 2017, a drop of 4.0%. Searching for a cause, we first look at inventory, which dropped 15.6% year over year with just 653 homes on the market at years-end. The obvious cause, therefore, is that the local Realtors are running out of houses to sell. At year’s end there was just a 3.8-month supply of houses available, a drop of 9.5% since 2016. As a caveat, note that this figure covers all price ranges and isn’t totally indicative of availability in any specific price range. Generally speaking, houses in the $200,000 to $400,000 ranges are selling like hot cakes. Check with your Realtor to get yourself set up on an automatic new-listing alert system and be ready to make an offer immediately when that just-right house comes on the market. For financial planning, note that the average price for a home in Henderson County in 2017 was $274,844, an increase of 14.4%.
Madison County has a total population of 21,000 spread through beautiful mountains, from the county seat of Marshall adjacent to the French Broad River, and running up through Mars Hill and on to Hot Springs and the residential area and ski facilities at Wolf Laurel. Mars Hill University offers a great education and the Mars Hill Lions field pretty good teams in football and other collegiate sports. One of the delightful community events is the Lunsford Music Festival, held the first weekend in October. It is named for Bascom Lamar Lunsford, the acknowledged father of mountain folk music and a man who is rightly credited with lifting mountain music to a higher level. Lunsford researched widely and could remember songs when just a few notes were played. His unique style of playing led him to create a five-string instrument he called a “mandoline,” using a mandolin body with a banjo neck. At a young age he continually found himself fighting off the stereotyping of folk music as being performed by uneducated people in the remote mountain coves, so, being college educated, he always performed in a starched white shirt with a black bow tie. In 1928, at the request of the Asheville Chamber of Commerce, he founded the Mountain Dance and Folk Festival to bring tourists and mountain music together in a three-day event that played in the Asheville Auditorium.
And while Madison has tremendous mountain charm, it still just has 21,000 residents and not a lot of real estate activity. Only 231 homes sold there in 2017, an increase of 11.1% over 2016. The average price was a tad bit over $204,000 and was essentially the same as the prior year.
Brevard is the county seat of Transylvania County and it is widely acclaimed for the Brevard Music Center. If you haven’t been to one of their mid-summer evening or Sunday afternoon concerts, please do put it on your list. Great music, terrific venue, and the best time of year for it.
There were 620 homes sold in Transylvania County in 2017, an increase of 5.3% over 2016. The average price was a very strong $309,499, a 12.8% increase. Verifying that the average was no fluke, the median price was up 13.1% to $250,000 versus $220,975 the year prior. The sales pace also picked up quite a bit, with the average property being listed just 172 days before closing. Two years ago that number was 199 days, and it was 178 last year. For immediate comparison, adjacent Henderson County homes were on the market just 112 days prior to closing, while Polk and Rutherford were 177 and 155 respectively. There was a 9.2-month supply of homes on the market at year’s end, indicating the county is still a strong buyer’s market wherein the buyer has more leverage than does the seller when it gets down to determining price and other aspects of a deal and contract. Our recommendation is to discuss this concept—it doesn’t play in every neighborhood—with your Realtor whether you are buying or selling. A little bit of advice and an understanding of market dynamics can facilitate a sale.
If you haven’t been to Saluda or Tryon, you need to get on down there. Two of Western North Carolina’s most picturesque little towns make Polk County a terrific place to live. Taxes are low, the scenery is gorgeous, and commuting distances to both Greenville and Asheville are moderate, giving Polk residents real choices in where to go for big-city attractions. (For an economic report and detailed discussion about Polk County, read “Pretty in Polk” in our April 2017 issue.)
Did we mention Coon Dog Day? This is held in Saluda on the 4th of July weekend, and dogs of all sizes and shapes, along with their owners, are cordially invited. There is an enormous parade up Main Street of hillbilly fire trucks mixed in with the real trucks from nearly every fire house in a 50-mile radius. There are antique and classic cars, activities for the kids, and local food and drink—as well as the best food trucks this side of, well, heaven. Down the mountain in Tryon there is the Tryon International Equestrian Center, which is a world-class venue for everything related to horses. The entrance is actually near the little town of Mill Spring, just off US 74 at John Shehan Road. The area is dotted with old and new horse farms, and in 2018 it will host the FEI World Equestrian Games September 11-23. There has never been anything like this event in North Carolina, so you might want to get your tickets now. (And those of you attending and enjoying might want to consider settling down in our area.)
Despite all, Polk is a relatively small county with just 274 home sales in 2017. The average price was $256,800, up from $252,270 the year before. Your best bets for year-round lodging with an equestrian flavor, as well as close proximity to shopping and cultural events, might lie up I-26 in Henderson County or even down the road in Inman or Campobello, South Carolina. The Realtors in the region generally have licenses in both states, so give them a call before you wear your car out completely.
Think Lake Lure, along with Rutherfordton, Forest City, Chimney Rock, Ellenboro, Spindale, and lots of rolling farmland just waiting for your decision to adopt a slower pace of life. This is Rutherford County, home to major Google and Facebook data centers, Isothermal Community College (which houses the beloved community radio station WNCW-FM), and some of the friendliest people you’d ever hope to meet. Residential home sales reached 545 units in 2017, up 17.4% from 2016. Much of this increase was due to the data centers, but there also was a lot of activity in the Lake Lure area and near Forest City. If you’re marking locations that are small but growing quickly, Rutherford County should be on your list.
Housing is a bargain in Rutherford, with the average home selling for just $213,000 in 2017, an increase of 13% over 2016. Looking at the median price, Rutherford was just $175,000 last year, the lowest price in our seven county MLS system. There were 338 homes for sale there in all price ranges at year’s end, calculating out to a balanced 6.5-month supply. As we said about Polk County, take a look at it and then contact a Realtor to see if you can zero in on just the right property. In a rural area with miles and miles between listings, you can save a lot of time and mileage on the car by working with someone with local knowledge.
THE OVERALL OUTLOOK
The outlook is good and getting better. December pending sales are up throughout the MLS by 2.0% over 2016. That simply means there will be more sales in early 2018, and that is good. In 2016 we were just up .9% over 2015, so by all accounts we have made a good recovery. Predictions by some observers to the contrary, there does not appear to be any bubble in sight, as new homes are not being built fast enough to meet the demand, with the new homes starts data showing we are at about half the rate as in 2006. The main issue is affordability for young couples—with inventory continuing to tighten existing homes are being priced out of reach.
We’re not going to forecast real estate sales figures, nor really do we wish to make hard forecasts with regard to the impact of the historic tax cuts enacted in late December. It looks like they would help middle class Americans have more disposable income, but it’s probably just as well to stay out of that arena which is so subject to political whim. Let’s just say we are optimistic that the current market fundamentals will not decline during the current year, pending disasters, catastrophes, or Acts of God we cannot predict.
In summary, sales are up, prices are up, inventory continues to shrink, and your current house is probably worth considerably more than you paid for it, but is still a bargain for someone retiring to the area. It’s great to live in Western North Carolina.
Bill Fishburne is a Broker-Associate with Beverly-Hanks & Associates. He is a two-time President of the Hendersonville Board of Realtors and was named Realtor of the Year in Henderson County in 2014. Contact him at firstname.lastname@example.org
The full article continues below. Click to open in fullscreen…