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  • Monday market in minutes, on our way to achieving balance

    Monday, March 11, 2024   /   by Amy Brown

    Monday market in minutes, on our way to achieving balance

    Though the tumultuous recent years have deviated significantly from historical norms, it appears the housing market is due for a gradual shift back towards stability. And according to this week's numbers we are heading in that direction.

    According to research from the Fannie Mae Economic and Strategic Research (ESR) Group, the housing market appears poised for a gradual return to a more balanced state in 2024.
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    We are actually seeing the first declines in list price in months due to an influx of inventory into the market anticipating the spring buying season.

    The average list price for the city limits of Asheville is down 10.1% to $633,264.

    In Buncombe county, list prices have dropped 2.9% to $610,657.

    The ESR anticipates decline in mortgage rates throughout 2024, loosening the “lock-in effect” – a phrase referring to current homeowners who bought or refinanced during or before the coronavirus crisis. Because of the ultra-low mortgage rates, they have had little motivation to sell, as they would face higher mortgage rates on their next homes.

    Inventory has made a dramatic upswing this week with a gain of 42.9% in Buncombe county and 26.7% in the city of Asheville.

    But if rates drop below 6% by the end of the year, the annual pace of existing home sales could rise to as much as 4.5 million units, much closer to pre-pandemic levels. And this could force home prices back up again.

    Fannie Mae expects supply will remain tight, and affordability will remain an issue. The ongoing scarcity will likely push prices higher.

    Days on market still remain low:

    From list to close:

    Buncombe county = 35 days
    Asheville city = 32 days

    Sellers are still seeing a very good return on their sale following negotiations:

    Buncombe county = 95.7% of list price
    Asheville city = 96% of list price

    *If interest rates drop, bringing more buyers back to the market, these percentages will increase significantly along with competition.

    The gradual improvement in the housing market is occurring against the backdrop of a slow-growing economy. However, the Federal Reserve is signaling future rate cuts, contributing to a more optimistic outlook. If mortgage rates continue to decline, affordability should increase.

    While challenges persist, proactive measures and favorable market conditions are expected to support the market's resilience and gradual recovery in 2024 and beyond.