After a few record-setting years for the Western North Carolina real estate market, the latter months of 2022 and early 2023 have left many questioning if the narrative might be shifting, if only slightly. Inventories have remained low which has kept prices relatively stable in our market, even amidst the ongoing backdrop of economic and global concerns. The stats do provoke pause and leave a lingering question: "Are we are starting to see signs of a more balanced market where supply is more in line with demand?"
Buncombe County
From February to March, there was a 74% increase in new listings, a 32% increase in properties under contract, and a 24% increase in the number of homes sold in Buncombe County. Typical market seasonality can be credited for some of these increases. An in-depth look at March 2023 compared to 2022 reveals more of the story. Compared to 2022, March listings are down 6%, properties under contract are down 19%, and homes sold are down 25%. However, these statistics are moving on a different trajectory than the numbers were in the last quarter of 2022. Inventories are rising – 77 more listings were added to the market than were taken off in March. As we have stated in past market updates, inventory is the key metric that drives balance in the real estate market. We now, ask the question: is the shift in inventory a one-month anomaly, or the harbinger of a longer-term trend?
McDowell County
Similar to Buncombe County, McDowell County saw a shift when you compare March to February – an 88% increase in new listings, a 32% increase in under-contract properties, and a 48% increase in homes sold. As mentioned previously, some of this can be credited to typical seasonality, but the overall supply of homes is increasing in McDowell County as well. As inventories increase, we anticipate seeing less upward pressure on prices. In McDowell, for example, homes in March sold for 88% of the original list price.
Burke County
In Burke County, from February to March, new listings increased 57%, homes under contract increased 45%, and homes sold increased by 74%. The monthly supply of inventory metric is defined as how long it takes for the existing inventory to be on the market given the current sales rate if no new homes were added – a typical market is 3 to 4 months. Since the pandemic began, the month's supply of inventory has.jpg)
been depleted, but we are beginning to see this rise. The monthly supply has increased from 1.1 months in 2022 to 1.8 months in 2023.
Conclusion
One month of data shifting in the direction of increasing inventory doesn’t equate to “a trend,” and there is certainly seasonality at play as winter has shifted to spring, and the warmer months. However, it is worth watching to see if inventories continue to rise. In our market, home prices have continued to rise, but at a much lower rate than what was occurring previously. We do anticipate that inventories would need to increase dramatically before we would see downward pressure on prices.
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