Asheville homes hit record Q3 price, interest rates rise. When should locals buy homes?
ASHEVILLE - Asheville and Buncombe are now looking at an identical median home sales price of $475,000, the highest third quarter sales price on record, according to the Mosaic Community Lifestyle Realty third quarter market analysis.
For Asheville, the price is $17,000 below the median sales price recorded in Mosiac Realty's second quarter home report, but remains the highest third quarter median sales price in Asheville history. The number reflects the highest median quarterly sales price for Buncombe County.
During the third quarter, nearly 36.5% of all homebuyers in the past quarter have been cash buyers, said Mike Figura, owner of Mosaic Community Lifestyle Realty. That number beats the 2022 national average of 36.1% of home purchases with cash, according to real estate analytics firm Attom.
However, the number — which is only a few tenths percentage points higher than the national average — is not unusual for this area.
"Our market generally has around that level of cash buyers," Figura said.
Seth Connelly, a realtor with Nest Realty and 20-year Asheville resident, said that cash buying is prevalent due to higher interest rates and our area being attractive as a second-home destination.
"There are lot of second-home owners, there's a lot of folks relocating from more expensive markets in the Northeast, or South Florida, or the West Coast, Denver, where buying a $700,000 house with cash is totally reasonable," Connelly said.
"Now, the other two thirds of people that are purchasing with a loan are definitely impacted by interest rates."
What do higher interest rates mean for the Asheville market?
Interest rates for an average 30-year mortgage ended at an average 7.63% the week of Oct. 19, up a half point since October 2022, according to Freddy Mac, the Federal Home Loan Mortgage Corporation chartered by Congress in 1970. Currently, interest rates are at their highest point since November 2000.
Figura said he didn't expect the interest rates to get this high, but, perhaps, it shows the strength of the market.
"If somebody had said interest rates are going to be in the mid-7s, and the market is going to be setting record prices — now, it's not by a lot — but the housing market is still strong with interest rates this high," Figura said.
"I mean, I'm kind of blown away by it."
Figura said interest rates keep homes off the market and homebuyers away — for the time being.
"If they're trading up and buying a more expensive house — or even buying the same cost house — whatever debt they put on that property is going to be more expensive. Probably by at least two times," Figura said of the impact of rising interest rates.
"And that is making a lot of sellers make the choice not to sell their house."
Connelly agrees.
"If I'm a buyer in this market, and I've got a 3% interest rate on my mortgage — but now have another kid, a situation's changed — I'm kind of stuck," Connelly said. "Because I don't want to go from my $1,500 a month mortgage to a $3,000 mortgage.
"So, I'm just going to kind of stick it out for a while."
If interest rates fall in the coming months, the market could see more buyers and sellers, Connelly said.
"As interest rates do eventually fall and come down, that's going to flood all these buyers back into the market because there's all this pent up demand," Connelly said.
When should first time homebuyers get in the market? Locals?
As for when to buy, Connelly and Figura have some advice for those looking to get in the market.
Connelly suggests eyeing out the properties that are sitting on the market a little bit longer. Through the third quarter of this year, homes in the Asheville area were on the market for an average of 35 days — 20% longer than 2022.
"The real advice I would give first time buyers right now is to be looking at properties that have been on the market for a little bit longer, maybe a couple of weeks, maybe a month or so, that is overpriced. It's not necessarily anything wrong with the house, it's that the sellers had a pretty ambitious number in mind, they overpriced it."
Figura said the winter months of the fourth and first quarter benefit local buyers in Asheville and Buncombe.
"You don't have as many tourists and people from out of town competing in the same market as you," Figura said.
"A local doesn't have to travel to see a house — they're already here," Figura said. "And going back to basic economics again, supply and demand sets pricing so, seasonally, demand drops in the winter and it can be a good time for buyers to get in and not have as much competition."
The median sales price for Asheville homes has been steadily increasing, with recent data suggesting that homebuyers are paying below list price in the area.
Figura said the trend is "not uniform" for all houses in the market, but may be true for many.
"Sellers who priced at the highest pricing possible — their houses are tending to sit on the market and at price reductions," Figura said.
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Sales, Listings
All numbers are according to the Mosaic Community Lifestyle Realty Third Quarter Market Analysis. Data for 2023 is only through the third quarter.
Asheville
Median sales price for the year:
2023: $475,000 (+7.3%)
2022: $455,000
Homes sold through the third quarter of each year:
2023: 585 (-18%)
2022: 714
Average days on market:
2023: 35 (+20.7%)
2022: 29
Buncombe County, not including Asheville
Median sales price for the year:
2023: $454,000 (+4.3%)
2022: $435,000
Homes sold through the third quarter of each year:
2023: 1139 (-25.7%)
2022: 1533
Average days on market:
2023: 43 (+38.7%)
2022: 31
More: 'Seller's market': Asheville housing market sees high interest, higher price, reports show
More: 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 atWHofmann@citizentimes.com.
This article originally appeared on Asheville Citizen Times: Asheville homes record Q3 median sales price. When should locals buy?
