As I indicated in my last article, my intent was to write a piece on vacation rental property in our area this time. Folks have been stopping me on the street, however, to ask me about the impact of the national housing market on Black Mountain, so I have decided to postpone my planned article until next month and take a look at the numbers here to assess how our housing market is holding up.
I assume that everyone has been reading the national headlines. Just this week, The New York Times has written "Pending Home Sales Sink in July" and "Stocks Fall in Home Sales Report". Other newspapers echo that news with "Housing Market Worst Since Depression", "Five Months of Declining Value in Housing Market", and "Nine Month Inventory of Homes on Market."
So what is happening in Black Mountain? As usual when asked that question I turn to the numbers for my answer. Using our regional Multiple Listing Service (MLS) system, I have to say I am encouraged by what I see.
The total volume of house sales in terms of dollars in the Black Mountain area rose 35% year to date through August 2007. Total number of houses sold is up 22% for the same period with an average price increase of 11%. Historically, the average price has increased 15% over the past few years so appreciation in our market has slowed a bit but is still very healthy, especially relative to many places in the nation.
One area that does show some potential weakness in the market is the inventory of homes for sale. Last year, there were approximately 65 to 70 homes on the market. At present, there are 126 on the market. It is interesting that the number of units sold in 2007 is up 22% and yet total inventory on market is almost double. The increase in inventory is therefore a result of more people listing their homes for sale rather than a slow down in purchases.
Most of the increase in inventory is the result of the upper end of the market. Currently there are 54 homes on the market priced over $450,000 in Black Mountain and only 12 homes in this price range have sold this year through August 31 (12 sales over $450,000 is well above 2006 when only 5 sold through August). The increase of upper end inventory may be the result of the national housing slowdown. My feeling is that most of the people purchasing houses in this price range are moving into Black Mountain from elsewhere, and it may be that the depressed markets in the other areas of the nation may be preventing them from selling their existing homes to make this move.
As always when I use numbers to support my argument, I would like to point out that there are limitations to my interpretations. First of all, you really need to look at trends and not particular months to see how things are progressing. And you also need to remember that there is a delay in the numbers. This means that August sales are more of an indication of choices buyers made in June when they probably entered into the offer to purchase contract. With those caveats in place, however, I feel as if I can say that Black Mountain's market continues to have solid, steady growth despite the decline being felt nationally.