The Asheville housing market has been a hot topic of discussion lately, with a recent report suggesting that home prices in the area are overvalued by a staggering 46%. This revelation has sparked speculation about whether prices could finally start to fall. However, local real estate agents are not convinced and believe that prices will hold steady or even continue to rise. Let's delve deeper into this intriguing situation and explore the factors at play.
The Current Housing Market Scenario
The housing market in Asheville is currently experiencing historically low inventory levels. The demand from buyers far exceeds the number of houses available for sale. This scarcity of inventory has created a highly competitive environment where buyers are engaging in bidding wars, often resulting in skyrocketing prices.
Terri King, president and owner at Coldwell Banker King real estate agency, said her agency is seeing strong sales in and around Asheville, but also in outlying counties.
A report conducted for the Dogwood Health Trust found that there is a significant "for-sale housing gap" of 3,096 units in the mountain region. This means that there is a pressing need for additional homes to accommodate the demand. Despite this, there is a lack of new construction activity in the area, exacerbating the shortage further.
The Influence of Outside Buyers
The housing market in Asheville has also been influenced by an influx of outside buyers. Just like in other hot housing markets across the United States, remote workers and retirees from higher-cost places have been attracted to the area. These buyers often bring cash offers and engage in bidding wars, leaving local buyers with limited options and few opportunities to purchase an affordable home.
Price Trends and Predictions
While the NPR report suggests that Asheville homes are overvalued by 46%, local real estate agents disagree with this assessment. They believe that the market is driven by low inventory and an influx of outside buyers, rather than overvaluation. Although there is a consensus among economists that prices cannot continue to rise at the current pace, these agents expect a leveling off of prices rather than a significant decline.
Terri King, president and owner of Coldwell Banker King Real Estate, predicts that prices will stabilize without any major declines. She expects buyers to pay what homes are worth, which may result in a slower rate of price appreciation going forward.
The Future of the Asheville Housing Market
Experts are skeptical about the possibility of a housing crash similar to the one experienced in 2008. The demand for housing in the United States currently outpaces supply by approximately 4 million units, and stricter regulations have been implemented to prevent reckless mortgage lending. Additionally, Asheville's desirability as a retirement destination and its appeal to remote workers suggest that population migration will continue. However, limited resources and buildable land in the area may present challenges in meeting this demand.
Mike Figura, owner of Mosaic Community Lifestyle Realty, believes that the highly desirable nature of Asheville will continue to attract people, preventing significant price declines. He does not foresee any substantial changes in housing prices, even in the next five to ten years, unless there is a major economic downturn.
In conclusion, while the notion of falling home prices may seem appealing to prospective buyers, the reality in the Asheville housing market is more complex. Low inventory levels, an influx of outside buyers, and a highly competitive environment have led to the current state of affairs. While price stabilization may be on the horizon, significant price declines are unlikely in the foreseeable future.
