For a recent market update, we spoke with Mary Love of Love The Green, a real estate consulting firm. She is an agent specializing in green-built and sustainable homes, a real estate investor, and has her own blog and YouTube channel where she shares her love for the industry.
As 2020 began, Mary was gearing up for the best year ever. Then, coronavirus hit and real estate stood still. The North Carolina government classified real estate agents as essential workers in mid-April, and she got back to the business, but things had changed for sure.
Instead of in-home visits and meetings, Mary saw virtual offerings jump in popularity. Realtors’ use of tech tools like Matterport rose drastically. Within a three-month span, it became common practice for buyers to purchase homes primarily based on virtual showings. Luckily, today’s virtual tours with 3D imaging and 360 views are a great way to get a feel for a property.
Despite the tools and communication process updates, Mary admits her main descriptor entering Q2 was “scary.” She’s used to the ups and downs of real estate, but this was totally unforeseen on a worldwide level. We also haven’t seen the end of this pandemic yet… who knows what’s to come for the world?
Market Update: Statistics and Analysis
When analyzing data, Mary looks at the entire Asheville region, plus surrounding counties in Western North Carolina. Those counties are relevant despite lower sales numbers — they have similar percentage rates, and investors are now looking outside Buncombe County for new properties.
The Quarter 2 numbers indicate the results of the first COVID-19 shutdown. The WNC area saw a 39% drop in home sales. Pending contracts, which are active listings that have been accepted but not yet closed, are going up.
In Buncombe County, closed sales were down 47% from last year. This was partially due to lack of new listings and home inventory. Less properties are available since many people were unsure of the future and put their sales on hold. This lack of inventory means higher prices.
In Henderson County, home sales declined 35%. There is a slightly higher inventory there than in Buncombe. Year-to-date sales for the greater area declined 43%. Outlying counties’ sales stopped almost completely during the COVID-19 shutdown, as some towns were even physically blocked from visitors.
Historically, the median sales price for the Asheville-Buncombe area went up slowly, which was mostly due to the housing shortage. After COVID, those prices are going up at a more drastic exponential rate. Now that the market is picking up, there are buyers but still very low home inventory, which is frustrating for pros like Mary.
Looking at the average days on market, she examines the strongest price range. This is homes priced in the $300,000s. The average days on market until sale in June is only four. Now that’s fast! Any property under $325k has multiple offers, regardless of condition.
We looked at the realtor’s index from the National Association of Realtors (NAR) for this market update, which is based on surveys from active realtors. This is an outlook a year out, since it’s hard to predict short term.
16% of realtors believe we’ll see a 20% drop in business, but 24% think the market will increase between 1-5%. Mary has faith that locally, we’ll continue to see a rise—provided builders continue to actually produce homes (not just proposals). Currently, buyers in WNC are unwilling to wait for a home to be built. Builders and developers are working as fast as possible right now.
It’s a seller’s market. In terms of listings in North Carolina, the majority of realtors think volume will continue to go down. Again, that will cause prices to go up.
Instead of looking five years ahead in her investment planning, Mary is shifting to 10-year plans. This means you shouldn’t expect to make money until perhaps 10 years out.
On the national level, 34% of buyers are first-timers. This is a large number, and is shifting away from the “millennials not wanting to buy homes” trend. Mary is even seeing senior citizens buying homes for the first time, perhaps due to the pandemic and the resulting economy. This is happening nationwide and generation-wide. Unfortunately, buyers are seeing high prices on homes and lenders requiring higher credit scores. It’s harder to get loans, especially with the uncertainty of unemployment. We’re also seeing an increase of first-time buyers who live with parents or friends, which Mary thinks will carry over to next year. Again, this is due to the pandemic.
Cash sales locally have declined. Mary thinks this is due to low interest rates and the lack of options and inventory. She has put all rehab projects on hold, because she’s very conservative as an investor.
Nationwide, list price wasn’t a big deal before COVID. Now, sellers need to set pricing carefully. Places where prices were out of line, like Las Vegas, were hit hard. Realtors have seen an adjustment of prices. Luckily, that hasn’t affected the WNC area, since prices were already matched well to the property and the market.
Mary’s Expert Tips
- Buy now if you’re looking for a home to live in right now. Prices are going up, and inventory is down.
- If you’re an investor looking to hold a property, buy now for the same reasons.
- Planning to fix and flip? Be careful. You have a minimum of 90 days before that home goes to market and another 90 days before it closes. Six months from now it will be winter, and we don’t know what will happen with COVID and the economy then. If we have another shutdown like March, you’ll be holding inventory.
Of course, it all depends on your comfort level and financial status.
- If you want to list your home for sale, list it now. Because inventory is so low, it’s the time to do so, even if the home isn’t quite ready in your eyes. List at the right price and it will sell.
Mary is actively seeking new listings and telling buyers not to think about it, just buy. The market is HOT. She is excited about the number of sustainable/green homes coming onto the market. However, Mary worries about the unknown and our reliance on an international supply chain. Building materials that are coming from nationwide suppliers could run out.
It’s an exciting time in real estate! Real estate can be a gamble, so this is an adrenaline rush and high stakes game currently. Do your research and roll the dice.
Find Mary’s blog and links to her YouTube channel on her website.