Well, the first quarter market statistics are in, and the recent trend of tightening supply seems to be impacting the real estate market in the western NC mountains. And fairly predictably, as the housing supply dwindles, land sales have surged for the first time in several years. The current numbers support the supply v demand theory so well, the statistics could be in an economics textbook.
Buncombe County Market Numbers
In Buncombe County, the number of housing units sold grew a modest 4% for the first quarter of 2016, increasing from 751 units for the same period of 2015 to 779 of the current year. Interestingly, the total sales volume grew at a larger rate, 17%, which can be accounted for in part by the 12% increase in average price, from $260,065 in 2015 to $292,094 in 2016.
A quick glance at a couple of other numbers further supports the supply versus demand economic theory. For example, Days on the Market (DOM) decreased to 87 days, down from 189 DOM as recently as 2012. In addition, the percent of sales price to market price (SP/LP) is now at 97%, again up from 93% SP/LP in the early 2010s. This indicates that buyers are paying closer to asking price, another indication of a tightening supply market.
And finally, another number that seems important to consider is the actual number of homes on the market this last quarter. That number, 1678 units, represents a dramatic decrease from the peak number of 3316 units present for the same quarter in 2010. That number in itself is very relevant. Even more impactful, however, is the actual number of those home units that are actually available. Of those 1678 units, there are actually only 1142 without contracts or 68% that are not already tentatively sold. With those kinds of numbers, it will not be surprising to see that average price per home continue its increase.
Black Mountain Market Numbers
Black Mountain market numbers require some qualification to them. Because the units sold is such a small sample, it can be a bit more difficult to extrapolate meaningful data. Still, however, looking at first quarter numbers, it appears that the market also has a tightened supply which may impact market trends in the near future. So, the number of units sold in Black Mountain shows a decrease of 16%, down from 49 units in 2015 to 41 units this year. Further, total sales volume has decreased 10% for the first quarter while the average price grew at a solid 7% for the first quarter.
And again, DOM now stands at 86 days, very close to Buncombe County numbers, and down from a hefty 204 days in 2012. And the SP/LP mirrors that of the county numbers at 97%, up from 89% for the same quarter in 2011. And as in the county statistics, the number of units on the market stands at 95, down from 7% in this quarter of 2015. If those numbers take into account the number of homes without current contracts, that number falls to only 61 units which again points to that old supply versus demand theory. Again, the market decreases mentioned above can be attributed to the very limited inventory in the area.
So what other impact have these numbers had on the market? Well, for one thing, land is gaining buyers’ attention. Indeed, county-wide, the number of land units sold has increased 35% for the first quarter of this year, with a 36% increase in dollars sold. And Black Mountain numbers reflect the same increased interest in land, just on a smaller scale with 17 units of land being sold in the first quarter, contrasted with 4 for the same period last year. With this tightening supply in the home unit market, it bears watching how that impacts land and land available.
As I study these numbers, I have to say they reflect what our Realtors at Greybeard Realty have seen in our business. As I scan Greybeard Realty's residential listings for possible homes to show potential buyers, I have been struck by how many listed homes are already under contract. My advice is that if you have a home you have been waiting to list, this could be a terrific time to do that. And if you are looking for a home in the area, there is still plenty of supply, just not as much as several years ago. If you’ve been putting off relocating or purchasing that second home in the Asheville area, you might want to move that to the front burner before prices increase more. Again, all that economic theory everyone studies seems to be holding true in our area. To keep up to speed on the western NC real estate market, please check out market numbers website.