Low supply and rising prices cause home sales to cool across the Asheville region

Press release from Canopy MLS

After June’s record number of transactions, residential home sales across the Asheville region cooled in July 2021, with sales dipping 4.5% year-over-year as 1,240 properties sold across the western North Carolina mountains. Canopy MLS data showed month-over-month, sales were down 4.3% compared to June 2021. These are completed transactions that include single family and condo/townhome data only.

Buyer demand, as displayed by pending sales or contracts, is still strong and rose 2% year-over-year as buyers drove 1,429 properties under contract.  Contract activity tends to be a forward-looking indicator or predictor of future sales. Contract activity compared to June 2021 was up 3%.

Seller confidence continues to be strong, with new listings increasing 8.8% year-over-year as 1,587 properties were listed. Buyers will find inventory throughout the region a challenge, with the number of homes for sale at report time totaling 2,076 a decrease of 43% year-over-year, or 1.7 months of supply. This time last year the region had 3.8 months of supply.

Darrin Graves, a Canopy MLS Board of Directors member and broker/Realtor® with Keller Williams Great Smokies, said, “Even though sales have cooled a bit after last month’s record number of transactions, one month of depressed sales activity doesn’t necessarily point to a shift. Last year’s pandemic pushed buyer and seller activity into the second half of 2020 and high demand has driven sales into this year. Buyer demand is still steady and this slight slowdown in activity coupled with the continued increases in new listings should help moderate home prices a bit.”

All price indices increased in relation to the lack of supply. Both the median sales price ($340,000) and the average sales price ($401,409) rose 15.3 % and 16.4% year-over-year respectively, while the average list price rose 8.3% year-over-year to $401,409. The original list price to sales price measure showed sellers across the 13-county region received 98.8% of list price in July. Home sales were brisk and averaged 31 days on market in July 2021 versus 72 days on market last July.

The Asheville region includes Burke, Buncombe, Haywood, Henderson, Jackson, Madison, McDowell, Mitchell, Polk, Rutherford, Swain, Transylvania and Yancey counties.

Asheville MSA

Sales across the Asheville metropolitan statistical area (MSA) were similar to the region, decreasing 9.1% year-over-year as 823 homes sold versus 905 in July 2020. Pending contracts, which typically close 45-60 days later, showed 953 homes went under contract during the month, an increase of 3.6% year-over-year, while sellers continued to respond favorably, by listing 1,068 homes for sale, an increase of 7.4% year-over-year. Still, inventory is challenged throughout the metro-area, falling 40.7% year-over-year with 1,308 homes for sale at report time or 1.6 months of supply. This is a small improvement since June 2021, when there was a month and a half of supply.

The dynamic of low supply amidst steady demand continues to pressure prices. Both the median sales price ($370,000) and the average sales price ($436,411) rose 19.4% and 21.8% year-over-year, respectively, while the average list price of $472,269 rose 11.3% compared to last July. Sellers in the metro area are getting nearly all of asking price, as displayed by the original list price to sales price ratio increasing 3.4% year-over-year to 99.3% of asking price. Days on market averaged 26 days this past July versus 62 days in July 2020.

Graves added, “Our region’s lack of supply is the chief reason that prices are rising, especially in areas closer-in to the city of Asheville and prices are definitely impacting first-time and workforce home buyers, locking many out of the market.  However, the growth in new listing activity over the first half of the year will definitely help buyers with more homes to choose in the short term, while long term adding to supply and cooling prices.”

Buncombe County

July home sales in Buncombe fell 5.7% year-over-year as 460 homes were sold versus 488 in July 2020. Pending contract activity showed buyer demand is steady and rose 3.5% year-over-year as 501 properties went under contract.  New listing activity was also positive and rose 7.4% with sellers bringing 569 homes to market during the month. Year-to-date figures show the county strongly positioned, as closings, contracts and new listing activity are well ahead of activity during the first seven months of 2020. Prices rose in relation to tight inventory. Both the median sales price ($395,000) and the average sales price ($485,957) rose 19.7% and 25.2% year-over-year respectively, while the average list price rose 11.4% over last July’s list price to $516,209. Inventory at report time showed 647 homes for sale, a 45.2% decline over last July or 1.4 months of supply. The original list price to sales price ratio shows sellers getting 99.3% of asking prices, while their homes averaged 28 days on market in July 2021 versus 54 days this time last year.

Haywood County 

Home sales in Haywood County slipped 12.2% year-over-year as 129 homes sold versus 147 that sold in July 2020. Pending contract activity is nearly unchanged compared to last July, rising just 1.2% as 163 properties went under contract during the month. New listings should help buyers with more choice as sellers listed 184 homes for sale, an increase of 6.4% year-over-year. However, buyers will find inventory tight, as only 241 homes were on market at report time compared to 369 on market in July 2020. This is a decrease of 34.7%, that has left 1.9 months of supply of homes for sale. Tight inventory will continue to pressure prices. Both the median sales price ($302,000) and the average sales price ($333,394) rose 14.6% and 17.8% year-over-year respectively, while the average list price rose 28.9% over last year to $428,254. Sellers in Haywood received 97.7% of asking prices in July 2021, according to the original list price to sales price ratio and also enjoyed faster days on market, which averaged 26 days this past July.

Henderson County

Sales fell 9.8% year-over-year in July 2021, as 211 homes were sold versus 234 that sold in July 2020. Pending sales activity shows buyers still in the market, as 252 homes went under contract in July, an increase of 5% year-over-year, while new listing activity also rose 6.2% over last July, as sellers listed 275 homes for sale. Year-to-date figures show the county strongly positioned, as closings, contracts and new listing activity are well ahead of activity during the first seven months of 2020. Prices rose in relation to tight inventory, both the median sales price ($352,000) and the average sales price ($401,537) rose 14.1% and 15.1% year-over-year respectively. The average list price is relatively unchanged, dipping 1.1% to $406,216. Still, sellers enjoyed receiving nearly all of asking prices in July as indicated by the original list price to sales price ratio registering 99.9%. Inventory at report time showed 350 homes for sale, versus 537 homes for sale or 1.6 months of supply. Sellers in Henderson County also had a faster rate of sales, averaging 22 days on market in July 2021, versus 60 days this time last year.

For more residential-housing market statistics, visit www.CarolinaHome.com and click on “Market Data.”