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Asheville’s Market Recovery Three Months After a Devastating Storm
In the wake of the recent Los Angeles wildfires, attention is still on Western North Carolina, where Asheville was severely impacted by Hurricane Helene in September 2024. A thriving mountain city known for its outdoor lifestyle, arts scene, and booming tourism industry, Asheville had been experiencing rapid home price appreciation—until disaster struck.
Now, three months later, the city is grappling with the long road to recovery, and the real estate market is showing both setbacks and promising signs of improvement.
A Market in Decline: The Immediate Impact of Hurricane Helene
Asheville’s housing market, once one of North Carolina’s fastest-growing, took a severe hit following the storm. The hurricane caused widespread destruction, including:
- Massive flooding—Western North Carolina received five months’ worth of rainfall in just three days.
- Infrastructure damage—Rivers overflowed, causing mudslides, washed-out roads, and bridge collapses.
- Widespread property loss—Entire neighborhoods in the River Arts District were severely damaged or destroyed.
According to Redfin, the impact on Asheville’s real estate market was substantial:
- -1.9% decrease in the sale-to-list price ratio compared to the previous year.
- 40% decline in the number of homes sold.
- 20% increase in median days on the market.
The French Broad River surged 12 feet above its banks, while the Swannanoa River reached a record 26 feet, swallowing entire communities. Tragically, 104 people lost their lives statewide, with nearly half of the fatalities occurring in Buncombe County, where Asheville is located.
Signs of Hope: Is the Market Recovering?
Despite the devastation, there are early indicators of a market rebound.
- New listings are increasing, a sign that homeowners and investors are regaining confidence.
- Buyers remain interested, with realtors noting continued demand from out-of-town buyers impressed by the community’s resilience.
- Rebuilding efforts are underway, supported by grassroots organizations, nonprofits, and local volunteers.
Mike Figura, broker and owner of Mosaic Community Lifestyle Realty, observed:
“The market is slowly coming back. Every week, we’re seeing a pickup. It’s like a light switch that got turned off and is now being turned back on, but as a dimmer switch.”
However, recovery is slow. Over 500 homes were temporarily withdrawn from the market while repairs were assessed, and the rental market is in flux due to displaced workers who lost their jobs when businesses were destroyed.
Cautious Optimism: What Investors Should Know
While the market is stabilizing, realtors are urging caution for both homebuyers and investors.
- Prices Are Declining, but Long-Term Growth Is Likely
- Many sellers are reducing asking prices due to uncertainty.
- Asheville’s previous rapid appreciation is expected to slow, but long-term fundamentals remain strong.
- Rental Market Shifts
- With local businesses still recovering, some workers have left the area, causing temporary rent declines.
- As the economy stabilizes, rental demand is expected to rebound.
- Infrastructure Challenges Could Delay Full Recovery
- While FEMA has provided support, insurers have been slow to issue payments, frustrating homeowners.
- More than 1,000 landslides have made rebuilding difficult.
Realtor Adrienne Crowther advised investors to be patient:
“Some of my out-of-town buyers are waiting a few months to give Asheville a chance to get back on its feet. While prices are adjusting, infrastructure repairs will take time. The market will be strong again, but investors should be mindful that rebuilding takes longer than expected.”
Lessons for Real Estate Investors: Weighing Risk vs. Reward
- Location Matters More Than Ever
Investors should focus on areas near employment centers and strong school districts rather than targeting flood-prone neighborhoods or distressed properties. - Affordable Housing Will Remain in Demand
“The starter home has been disappearing for years, making it harder for first-time buyers to enter the market,” Crowther noted.
Flipping or renting affordable single-family homes could be a lucrative long-term strategy in Asheville’s recovery.
- Be Prepared for Insurance & Financing Challenges
- Insurers have delayed payments and offered inadequate settlements, frustrating homeowners.
- Investors must budget for potential delays and higher insurance costs in storm-affected areas.
- Expect a Long-Term Recovery, Not a Quick Rebound
- Asheville remains a desirable city, but the market’s full recovery will take years.
- Those investing now should have a long-term outlook, focusing on 2026 and beyond for optimal returns.
Final Thoughts: A Market in Transition
Asheville’s real estate market is recovering, but challenges remain. Investors and buyers must exercise patience, recognizing that rebuilding efforts will take time.
Key Takeaways:
- Asheville is slowly rebounding, but price appreciation will be moderate.
- Rental markets have softened due to displaced workers, but long-term demand remains.
- Infrastructure repairs and insurance issues could delay recovery.
- Investors should take a cautious, long-term approach, targeting affordable housing and stable neighborhoods.
Despite the devastation of Hurricane Helene, Asheville’s resilient community and strong economic foundation suggest that it will eventually regain its status as one of North Carolina’s most desirable cities.
In the previous post: “Is Now a Better Time to Invest in Real Estate Debt or Equity?“
Asheville’s Market Recovery Three Months After a Devastating Storm
Has the U.S. Housing Market Finally Begun to Thaw After the Pandemic?
It seems like the housing market might be showing signs of life. According to a recent report from Redfin, pending home sales in early October have seen their largest year-over-year rise since 2021, with a 2% increase in the four weeks ending October 6.
This news is likely to be welcomed by real estate investors who have felt the market has offered limited opportunities over the past few years. However, it’s important to take a cautious approach—one promising statistic doesn’t necessarily indicate a broader trend.
Is the Housing Market Truly Recovering?
Let’s explore the different factors at play.
Interest Rate Reductions: A Critical Factor or a Red Herring?
The Redfin report links the surge in pending sales to the Federal Reserve’s much-anticipated rate cut announcement in mid-September. According to Redfin, this announcement prompted buyers to re-enter the market in late September, despite mortgage rates having already been falling for weeks before the cut.
This psychological boost is crucial. Although buyers were aware of the falling rates beforehand, many seemed to be waiting for a formal signal to act. This could be attributed to a lingering fixation on the ultra-low rates of 3% to 4% that buyers enjoyed before 2022.
Any rate cut announcement serves as a nudge for prospective buyers, making them feel that now might be the right time to purchase, even if mortgage rates had been decreasing already. In an unstable mortgage market, such announcements hold significant influence.
However, mortgage rates are just one piece of the puzzle when analyzing housing market performance. As noted by Investopedia, the real estate market is driven by four primary factors: interest rates, demographics, economic conditions, and government policies.
Demographics: Shaping the Market
During the pandemic, demographic shifts had a profound effect on U.S. real estate, with major population movements like the Sunbelt migration fueling booms in cities such as Phoenix and Austin, which later became unaffordable for many.
Age is another key demographic factor, and the millennial generation’s pent-up demand continues to be a driving force behind the rise in home purchases. Despite the challenges of the past few years, millennials who have longed to become homeowners are now entering the market in greater numbers, as more properties become available.
Rising Inventory: A Sign of Stabilization
A key factor contributing to the market’s stabilization is the growth of housing inventory over the last year. The pandemic had a significant impact on the availability of homes, with sellers hesitant to list properties due to COVID-19 restrictions and, later, higher mortgage rates.
Some homeowners, particularly those upgrading to larger homes, found it financially challenging to sell and take on higher mortgages. Others, however, simply chose to wait for a more favorable market.
Although the latest Realtor.com report shows that inventory remains down by 23.2% compared to pre-pandemic levels, we are seeing an upward trend. For instance, new listings have been rising since last year, with a 5.7% year-over-year increase for the four weeks ending October 6.
As of September 2024, some states have even surpassed their pre-pandemic inventory levels, including Tennessee, Texas, and Idaho, with others, like Washington, close behind.
Vulnerabilities in Certain Regions
However, not all regions are showing positive signs. For example, some areas, particularly those affected by extreme weather, have seen inventory spikes not because of market recovery, but due to homeowners trying to offload damaged properties they can’t afford to repair.
For instance, regions like Florida and North Carolina, hit by hurricanes, have experienced increases in home listings, but these may reflect a response to climate-related challenges rather than market health.
Opportunities for Investors
Investors should be discerning when choosing markets, focusing on regions where inventory is growing due to increased home construction rather than climate-related distress. States like Idaho, Utah, North Carolina, and Texas, which are building new homes, offer potential, though caution is needed in areas prone to natural disasters.
The Midwest and Northeast, meanwhile, still face significant challenges in recovering to normal market conditions. These regions have lower rates of new construction, meaning inventory remains scarce, which could present both opportunities and difficulties for investors.
The Bottom Line
The U.S. housing market is showing signs of recovery, but the situation remains complex and varies by region. Interest rates play an essential role in unlocking the market, but investors should also consider other critical factors, such as homebuilding trends, climate risks, and government policies. While the market is heading in the right direction, it’s crucial to examine regional differences carefully before making investment decisions.
In the previous post: “Is Now a Better Time to Invest in Real Estate Debt or Equity?“