Asheville housing market forecast: Will prices drop in 2024? Who won out in the 2023?
ASHEVILLE - Throughout 2023, the Asheville area has seen a steady increase in home sales prices, with the third quarter setting record median prices amid interest rates that were floating on a 23-year high.
Since October, interest rates have slightly declined and buyer demand has risen for the third consecutive month in the region, according to a report from Canopy MLS. The signs point to a "promising outlook for buyers" come spring 2024, Dave Noyes, Canopy MLS Board of Directors member wrote in the report.
The Citizen Times spoke with two local realtors about the housing market in 2023, along with discussing what a early 2024 market might look like.
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'Bit of an enigma'
Mike Figura, owner of the Asheville-based Mosaic Community Lifestyle Realty, told the Citizen Times that the 2023 home market felt like "a little bit of an enigma."
"It looked like prices escalated and then flattened or even dropped in some price points as interest rates rose throughout the second half of the year," Figura said.
"Typically, it's ultra high-end luxury and luxury houses that start to cool off and stack up on the market. Inventory stacks up and prices start to soften," he noted.
However, Figura noted that those in the area who are paying a mortgage, rather than paying with cash, were the most impacted by increased sales prices and interest rates.
"This year, people who were getting loans were more impacted by interest rates rising than people who were paying cash," Figura said. "So the types of housing where people are paying cash — which is usually more expensive housing — tended to fare better."
During the third quarter of 2023, nearly 36.5% of all Asheville homebuyers bought using cash, according to an October market analysis from Figura. The number is just slightly above the reported national average of 34.1%, according to data from Redfin, a Seattle-based real estate brokerage company.
According to Redfin, the national number is the highest in a decade.
Those looking to find a luxury home in Buncombe County or Asheville are in luck. There are years worth of luxury homes on the market.
Mosaic Community Lifestyle Realty third quarter market analysis found that there are over 18 months worth of luxury homes on the market priced above $1.5 million. For homes priced above $1 million, that number increases to nearly 30 months' worth.
Seth Connelly, a realtor with the Asheville-based Nest Realty said this could partially explain some of the more dramatic changes in recent home sales data.
"There's so many and I think that higher-end is bringing the average price up dramatically — because by volume they take up a larger portion of active listings," Connelly said.
What about the 2024 market?
As for the spring? The recent drop in interest rates could lead to a "sweet spot for buyers," Figura said. However, it may not be for long.
"There could be a sweet spot for buyers right now, where there's not a ton of demand," Figura told the Citizen Times. "But if interest rates drop back down, to let's say the low 6's and 5's, buyers could find more bidding wars and prices escalating more."
Interest rates for an average 30-year mortgage ended at an average 6.95% the week of Dec. 14, down from a 23-year high in October, according to Freddie Mac, the Federal Home Loan Mortgage Corporation chartered by Congress in 1970.
Connelly believes the market could pick up earlier than expected, as purchase applications "are way up" alongside dipping interest rates.
"I think that it's going to be a very busy spring market," Connelly told the Citizen Times. "People are going to be balancing that window between maybe it being less competitive and still having some negotiating power, but also now having this windfall of lower rates."
Figura also noted the difficulty of Asheville's market, where housing production is more difficult due to terrain and construction costs.
"Without any meaningful changes in the production of housing, then I think we are just going to see things get more expensive," Figura said.
Who was buying in 2023?
One of the reasons more cash buyers are coming to Asheville could be a generational shift, Connelly said.
In fact, it might be good for one specific generation right now.
"This market is good for boomers," Connelly said.
"The boomers hold the wealth and they get to kind of control the market, but they are also experiencing inflationary conditions where their fixed income is becoming diluted," he noted.
Recent data from the Federal Reserve supports as much — at least in terms of wealth. Baby boomers own over half — 51.3% — of all American wealth, while Generation X owns 25.7% and millennials only own 9.3% of all American wealth. Data on Generation Z is not broken out from data on millennials.
Figura believes the generation might be more active currently due to their age and liquid wealth.
"Boomers are aging into retirement en masse, and money is not as important as the time that they have left to enjoy their money," he said. "They're willing to not be as calculated about whether or not they should wait a few years to buy."
November saw year-to-date increases, continued trends
Home sales in November saw the continued trend of buyers paying below listing price along with continued increases in median sales price in Asheville and Buncombe, according to a report from Canopy MLS released Dec. 20.
Here are the year-to-date home prices from November 2022-November 2023, according the report from Canopy MLS.
Priciest homes: Asheville's 6 most expensive homes on the market. How much would it cost to buy one?
City of Asheville
Median sales price:
2023: $489,000 (+5.4%)
2022: $464,000
Average list price:
2023: 692,287 (+9.9%)
2022: 629,709
Portion of list price paid:
2023: 96.7% (-3%)
2022: 99.7%
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Buncombe County
Median sales price:
2023: $469,500 (+5.6%)
2022: $444,720
Average list price:
2023: $660,494 (+9.3%)
2022: $604,177
Portion of list price paid:
2023: 97% (-2.4%)
2022: 99.4%
Asheville Metropolitan Statistical Area (Buncombe, Haywood, Henderson and Madison counties)
Median sales price:
2023: $436,745 (+5.2%)
2022: $415,000
Average list price:
2023: $598,871 (9.0%)
2022: $549,648
Portion of list price paid:
2023: 96.7% (-2.3%)
2022: 99%
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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: 2024 Asheville home sales: Will prices drop? Who was buying in 2023?
