Blog :: 01-2009

The 2008 Real Estate Market Year in Review

I've been concerned with the best way to convey the current real estate market in Black Mountain. A preliminary look at the numbers comparing sales volume and units sold in 2008 to 2007 shows a very steep decline in both categories. Sales volume and units sold were down 38% and 41% respectively. At the same time, average and median prices were for the most part flat. At first glance it would be difficult to find any good news in those numbers and what they indicate for the Black Mountain market.  

From what I've read and what I see personally in the area, however, I know the Black Mountain real estate market is stronger than other parts of the country. To get a true picture of the local market it is helpful to look at five year trends. Our sales volume is very similar to the volume in 2004, and the annual average price per home actually has increased 33% over the last five years. Part of the reason that our market in terms of volume and units sold was off so much in 2008 was that 2007 was such a strong year in Black Mountain. That strength in market ran counter to the national trend, as indicated by the chart I have included (2008 national numbers are not yet available).  That chart shows the decline of sales volume from 2005 to 2007 in Florida and California. While these states had a DECREASE in sales for that time period of 48% and 41% and the national figures decreased 20%, Black Mountain's market actually increased 42% from 2005 to 2007. From these numbers and the 2008 decline in sales in our area, it becomes apparent that the Black Mountain real estate market has finally slowed but it was among the last to feel the effects of the national slowdown in real estate.  As I have indicated in previous articles, history indicates that the last to feel the real estate pinch is generally the first to begin its recovery.   

Another point is that, as I indicated earlier, average price and median price have both held fairly steady during 2008 and over the five year span have shown a very healthy 33% and 30% growth respectively.  The fact that prices have held their own is an encouraging sign about our local market.

With interest rates around 4.9% at present, mortgages have become more affordable for qualified applicants which should loosen up the market eventually. And one other item to note is that building permits for 2008 were down 47% in Buncombe County.  Again, that number in itself cannot be seen as very positive but consider that when the market does begin to turn around, with fewer new houses coming on the market, inventories of existing homes will be lower which should be seen as a plus.

In conclusion, while the recent numbers are down, I think it's important to look at the five year trend.  I also adhere to the theory that Black Mountain felt the real estate market slowdown well after most of the rest of the country.  When the market starts up again, we should expect that we will be one of the first to experience that up tick.

-Chip Craig