Overall Thoughts

From a typical sellers perspective the overall market in Western North Carolina is clearly improving due to inventory reduction, sales volume and days on market numbers as well as list-price to sell-price ratios. From a buyers perspective in certain price-points and locations it is very difficult to find a suitable home. Affordability and a lack of homes with the "it-factor" in many price points are clearly issues. The rental market is very tight throughout the region and many of my properties under management are renting extremely quickly with increasing rents.

We are going to close the year in terms of sales volume with an incease of over 20% from 2011. Overall, we are up 25% compared to 2011 year-to-date sales volume throughout Western North Carolina.

Homes which are priced correctly in conjunction with their street and local competition have a good chance at getting close to their asking price. Some homes are selling very quickly as demand is increasing and supply levels are reducing. I am seeing many bidding wars working with both buyers and sellers. Buyers are still finding plenty of inventory on the market in many price-points, although many of the homes are not desirable due to location, updating needs or pricing issues.

Several price-points and locations are doing much better than others.  Also if your home is not updated it is going to be a tough time to sell.

There are buyers abound who are having an easier time getting financing than over the past few years, mortgage rates are at an all time low and inventory is getting tighter in many highly desired areas. 

Excess supply is still an issue in many areas and thus providing a drag on pricing and increasing the time a home spends on the market.  It still seems as if some houses are selling very quickly if they are priced correctly and some houses are sitting for a very long time. The key is to have a good agent to help along the way!

Mortgage Rates at

All-Time Lows

I am seeing more cash-buyers abound and more mortgage based deals getting closed. This indicates mortgage rates which are at their all-time historical lows are driving deals and buyer confidence is growing. In fact in 2012 there were about 20% more cash deals closing than there were in 2011. Over the last few years it has been tougher to get mortgages, I see conditions getting a bit easier based on my clients experience.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. Uncertainty about how Europe will resolve its debt crisis has led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

Many followers of the real estate market hear the same negative information regarding the aggregate numbers of homes sold and median price-points. Therefore they assume the market is still struggling.  Some important Western North Carolina statistics regarding single family homes include:

a) 2008 - 5,273 homes sold

b) 2009 - 4,703 homes sold

c) 2010 - 4,766 homes sold

d) 2011 - 4,847 homes sold

2012 - Excluding December 5,585

Overall, we are up approximately 25% in terms of inventory sold compared to year-to-date 2011. We have clearly surpassed the sales volume of 2008,  with rates at all-time lows and demand increasing the market should continue to improve.

Price Range Differences

Specific price ranges are doing better than others.  Some important examples of closed homes in the region include:

a) $160-$200k range

2012 - 876 homes sold

b) $200-$250k range

2012 - 716 homes sold

c) $250-$300k range

2012 - 475 homes sold

d) $300-$350k range

2012 - 331 homes sold

e) $350-$400k range

2012 - 220 homes sold

As prices are increasing and inventory is getting tighter in many price ranges the market for sellers is clearly improving.

Good Deals Possible

As for buyers, there are ample opportunities for good deals. Sellers are budging more from their asking price than in previous years. At a 92.8% list-to-sale ratio compared to 94.6% in 2008, deal making is still possible. For example in 2011 the rate was 91.8%, seller pricing power is improving, although they are willing to negotiate if their home has been on the market for a decent amount of time.

I am still seeing desirable and fairly priced properties sell very quickly. The

list-to-sale percentages are based primarily on how aggressive a home is priced, location, desirability and several other factors including updates and neighborhood. Many foreclosures and short sales are on the market, although many are either located in undesirable locations or need so much updating that they are no longer desired. Short sales are still very difficult to close due to banks and servicing firms dragging their feet.

Pricing Properly

Homes that are priced properly are generally selling relatively quickly.

Homes that are overpriced for their location are sitting on average 188 days in 2012. These homes need to be priced suitably based on current market activity for their neighborhood. The potential to sit even longer exists if the home is over-priced or are not desirable.

Average days on market rose from 171 in 2010 to 183 in 2011. As an example of how things have changed, in 2008 the average days on market was 126.  In 2012 the level is now at 188 days.

Average Price and Inventory Levels

a) 2012 avg home sales price in the region is $221,000 compared to $217,000 in 2011. In 2008 the average home price was $259,000

2012 Avg Inventory on Market - 8,130

2011 Avg Inventory on Market - 8,566

2010 Avg Inventory on Market - 9,382

2009 Avg Inventory on Market - 6,131

2008 Avg Inventory on Market - 2,280

You can clearly see that inventory levels are getting better from a sellers perspective but they are no-where near the highly constricted 2008 levels.

Inventory in many of the highly desired price-points and areas such as West and North Asheville are extremely tight. These areas are proving to be very difficult from a buyers perspective. I am seeing multiple bidding situations throughout these areas.

b) If you price your home with the expectation built-in of about 5% less than asking, you are putting your home in a much more competitive situation compared with other homes within the location and price-point.

c) For example recently in North Asheville I listed a home for $419,000. The second day on the market we received 3 offers.

The price point was attractive based on comparisons, which were over-priced and thus are sitting on the market for way to long to justify a strong bidding price. We had 6 showings in 2 days. 

Some areas and some price points are simply more in demand than others. My customers and I took into account the 92% average when pricing, therefore we went under contract very quickly.

Call Me Anytime

The next time you ask a real estate professional how the market is doing, you now have some tools to truly understand the dynamics of the local market.  

Feel free to contact me anytime for a free market analysis of your home or to discuss purchasing needs or property management services. As always your referrals are greatly appreciated!

Wishing you a happy and healthy holiday season...

Dave Bluth, MBA, ABR

Owner, Investec Realty and Business Solutions, LLC