| Hendersonville Times-News
Low interest rates, decreased inventory plus high demand and increased prices are fueling a historically hot housing market in Henderson County.
While local real estate experienced a slight slump at the beginning of the COVID-19 pandemic, the market quickly bounced back and is now stronger than before.
The average single-family home sales price in January was $325,000, up 13.7% from January of last year.
The market leans more in the favor of sellers than it did before the pandemic, according to Hendersonville Board of Realtors President Hunter Donaldson.
Scarce selection is a big part of the push and higher price tags, as housing inventory is down 33%. Inventory stands at 426, and averaged 636 last January.
“Our inventory is a big issue right now,” Donaldson said. “…We are really having trouble keeping up with demand.”
The current months supply, which refers to the number of months it would take for the current inventory of homes to sell given the current sales price, is 2.8 months. That is down 36.4% annually compared to last January, when Henderson County had 4.4 months supply.
Homebuilders’ sentiment has increased significantly from a low in April, and local realtors are hopeful that new-construction housing in the area will help alleviate the depleted single-family inventory, Donaldson said.
Current low interest rates give prospective homebuyers more buying power than ever before, Donaldson said. Rates are a bigger contributor driving the rush.
“While housing prices have significantly increased over the last two years, new home buyers’ monthly payments have stayed relatively the same as average interest rates have dropped nearly two points in that time frame,” Donaldson explained.
The average mortgage interest rate on a 30-year fixed rate loan in the U.S. is 2.98%, according to S&P Global data from earlier this month.
Interest rates vary by person, depending largely on your credit score, the type of home loan and what’s happening in the larger economy.
Buyers driven by life changes, increased rental costs
The past year has meant big changes for a significant portion of the population, which influences the housing market.
“A lot of folks that are selling are going through some sort of life-changing event,” Donaldson said, whether it be a new job opportunity, downsizing or a need for more space for a family.
The must-haves for buyers have also altered since the pandemic. With so many people working from home, buyers are valuing office space or an extra bedroom, Donaldson said. Outdoor space is an attractive feature as well.
The freedom of remote work is attracting new residents from bigger cities. Donaldson, who is also a real estate broker with Apple Country Realty, has noticed an influx of buyers from bigger cities, such as Denver, Atlanta and Charlotte.
“They can have the same job working from home while also enjoying the benefits of Henderson County and everything we offer,” he said.
Many out-of-state buyers hear about the Asheville housing market and end up stumbling upon Henderson County in their search.
“They see prices are a little bit cheaper and we still offer everything they are looking for,” Donaldson said.
Skyrocketing rental prices are also pushing more people to sign a mortgage. Rental properties under $1,000 have evaporated at a rapid pace over the last few years, even for a one-bedroom apartment.
Donaldson has seen more renters come onto the buying scene in recent months, since they can often score a mortgage that is equal to or less than their rental payment.
“It makes folks feel better to have their own place and build equity,” Donaldson said.
Sellers should carefully price, be prepared for a quick process
When sellers decide to make the leap to list their home, they need to have a game plan, as homes are quickly going under contract.
“If someone puts their house on the market, they need to have something in mind for where they are going,” Donaldson advised. “Right now we are seeing a lot of multiple-offer situations, especially on homes that are appropriately priced.”
Some properties end up with over five offers, he added.
Sellers should be aware of the importance of properly priced listing. If the price is too high, it won’t attract as much attention, Donaldson explained. Houses priced right generate tons of interest, which may end up driving the amount up on its own.
Homes under $300,000 are “flying off the table”, and demand is still strong for properties above that range. New communities with properties under $400,000 fill up at a fast rate.
What is considered “affordable” has shifted in recent years. “We used to say under $200,000 was affordable, and now it is closer to $300,000,” Donaldson said.
Giving an exact estimate on future pricing growth is difficult, Donaldson said. Current interest rates look like they will stay low for quite some time. Annual appreciation values are a bit tougher to nail down.
By the numbers
As of this week, the majority of Henderson County’s listing and contracted houses were in the $250,000 to $500,000 range.
Current market rates broken down by price ranges show:
- $0-$250,000 – 24 active listings, 70 under contract
- $250,000-$500,000 – 82 active listings, 184 under contract
- $500,000-$750,000 – 32 active listings, 38 under contact
- $750,000-plus – 72 active listings, 22 under contract
If 2020 figures are any indication, thousands of homes will be bought by the end of the year. Last year, 1,996 single-family homes were sold in Henderson County, along with 344 condos/townhomes, and 427 lots.
“2020 was a very, very big year for Henderson County real estate,” Donaldson said.
He advises anyone looking to purchase or sell a home to contact a local real estate agent to help navigate the challenges.
“The market is evolving every day. It is so active right now,” he said. “(A realtor) can provide the information for you to ultimately get the house you’re looking for.”
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