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Early Feb #'s suggest higher rate of Foreclosure Sales

noreply@blogger.com (Jason Ingle) — Tue, 01 Mar 2011 15:16:00 +0000

As I compiled the early returns for Feb (final #'s should be out by weekend) the biggest change over last February is the total number of short sales, foreclosures, and REO properties sold as a portion of the entire market. Numbers in now show total units sold for Feb at 95 (sure to be larger by weekend) and of those 28 were short sale, foreclosed, or REO properties. That's about 30% of the sold market. Comapred to Feb of 2010 which had a total units sold figure of 97 and only 16 "distressed" sales.
This will be the story for 2011. If the number of distressed sales continues on this clip then you should expect that appraisals will be an issue due to the fact that declining values will start affecting appraised values. When that happens then it becomes hard for a normal (other than distressed) home to be sold at a market price. This could be a scary cycle as the proportion of distressd properties incline it will be harder to "justify" the non-distressed asking prices.
Sorry for the downer, but as a buyer you should be VERY aware of the trend and not just the current market. Shoot for a price that you feel is fair 6 months to a yearf from now because you will lose some initial value.
Good luck.

End of the Year

noreply@blogger.com (Jason Ingle) — Fri, 31 Dec 2010 14:56:00 +0000

Three stories were prominent in the news yesterday that could have effects on the housing market nationwide and as well here in Asheville.
1) Mortgage rates ended the year on an "up" note. Bankrate.com Mortgage Rates Story
2) Pending home sales were up in November Bloomberg Story on Pending Home Sales
3) Unemployment claims were down Seeking Alpha Story on Unemployment Claims

So what does this mean for the housing market? I honestly don't know. But, I do know that when people are considering a major purchase the news and feeling of doom does not help. Mortgage rates are up , but the are up to 5% which is still really low. Pending home sales are up, and inquiries are up as well which indicates that buyers are wanting to get back out there. Finally, unemployment claims finally show a small downturn. I'm not saying we have turned the corner, but good news goes a long way when things feel bad.

I would like to think that this points to a brighter 2011!!

Real Estate is Local - A Look at the Nation vs. Asheville

noreply@blogger.com (Jason Ingle) — Wed, 29 Dec 2010 15:40:00 +0000

This morning I read an article in the Wall St. Journal quoting the newest Case-Schiller numbers for the housing market nationwide. I wish they were better but the numbers were pointing to a double dip in home values across the nation. Case-Schiller, who I respect very much for their analysis, studies 20 major metropolitan areas and then makes assumptions about the entire nation based on the trends in these markets.
The issue that I have with this type of analysis is that it makes large sweeping generalizations when most people are not readily educated about their local market. Now, if you are selling or happen to own a home in one of these markets then the data is very appropriate. But, if you are not in one of those markets then it may not apply at all.
Let's quickly look at Asheville (Buncombe County) as an example. I'll let you read the entire article in the Wall St. Journal for yourself. You can access it here:Wall St. Journal Article
Basically, it states that the data from these metro areas shows a dip in the sales prices of homes for the third straight month and a steep decline in home values from last year at this time. Specifically they were quoting a 1.3% decline in pricing in October from Sept., and in the Charlotte Metro (closest to Asheville) a 4.3% decline in value from last year.

Here are the stats from Asheville: Avg sales Prices, Month, and change.
Aug '10 - Sept '10 +4%
Sept. '10 - Oct. '10 -3.5%
Oct. '10- Nov. '10 +16%

Average Sales Prices for those months
Aug - $245,000
Sept.- $255,000
Oct. - $246,000
Nov. - $285,000

As you can see the average sales prices up in both Sept. and they exploded in Nov. Now on the other hand there were almost anemic total units sold numbers across these 3 months. The point is that what is dictating the pace and price of sales in the Asheville market is determined very much by the Asheville market. It is true that there are fewer buyers out there, but it is equally true that the quality inventory is very low. So, buyers are competing over the same homes. Many of the homes that are selling are in a competitive offer situation.

Learn your local market. Find someone you trust to give you the numbers.

December Looking Better???

noreply@blogger.com (Jason Ingle) — Tue, 28 Dec 2010 15:25:00 +0000

So, November was the worst month that Asheville real estate has seen in some time. Luckily, December looks to be a pretty decent month. It's not been a barn burner of a month but its certainly better than November. To date the market is up about 10% from November so that's a positive. Also, inquiries are definitely up. The mortgage rates, despite jumping up in the middle of December, have stabilized right around 5%.

I'll have more after the new year. Look for the December and Year End review!!

Mid-November Sales Update - Mixed Numbers

noreply@blogger.com (Jason Ingle) — Thu, 18 Nov 2010 17:21:00 +0000

I pulled sales numbers from the MLS this morning and found mixed results. For one, the number of homes sold to this point in November is 50. That's down by about 10 homes from October which was one of the slowest months this year. That doesn't bode well for robust sales numbers through the end of the month.
However, the median purchase price was back up to over $230,000. For the first time in a very long time a clear majority of the sold homes are over $200,000 (27 of the 50) and although not a majority a very healthy number were over $300,000 (23 of 50).
Still only about halfway through the month. I'll update again at the end of November.

Jason Ingle
Managing Broker/Broker
The Buyer's Agent of Asheville
(828)242-7616 Direct
jason@ashevillehomebuyer.com

Waiting on Rates to Fall???

noreply@blogger.com (Jason Ingle) — Thu, 18 Nov 2010 16:28:00 +0000

Over the past month I have actually had some people come up to me and express their desire to purchase but feel like now is not the right time. Now, I hear that a lot because people are worried that we may not be at the "bottom" of this economic decline. However, there has been a strange twist to these conversations as of late. The main reason people have stated as their reason for waiting is that they are waiting for rates to fall. Fall???? Rates are at unprecedented lows in the US and to bet on them falling further is a losing bet.

I watch bankrate.com for insight on the mortgage markets and rates. If you are waiting for this reason, or know someone that is please read this article published this morning 11/18/2010 to get an idea of what is going on with respect to rates.
http://www.bankrate.com/finance/mortgages/mortgage-rates-leap-to-3-month-peak.aspx?ic_id=tsThumb1

To put it into perspective: If you were looking for a $200,000 home a month ago when the rate was 4% you would now only be able to buy a $186,000 home and get the same mortgage payment. Waiting a month just cost you $14,000 worth of purchasing power!

Asheville Chamber sees Increase in Traffic

noreply@blogger.com (Jason Ingle) — Wed, 08 Sep 2010 15:56:00 +0000

I wrote in an analysis of the August Market Report that it seemed like people were being slow getting back into the hunt for a house after the summer as compared to typical years. I thought it may have something to do with families taking vacations a little later. This report was just posted in the Asheville Chamber of Commerce newsletter that at least confirmed that people were still vacationing in August even after school had started. Hopefully there will be an equivalent uptick in real estate traffic.

Asheville Visitor Center Sees Record Visitation in August
August has brought record numbers of people into the Chamber's Visitor Center with a 16.9% increase from August 2009. The year-over-year increases this July and August suggest a stellar year for the upcoming fall color leaf season. The Visitor Center provides a one stop shop for over 200,000 Asheville area guests each year. Tourists can find information on things to do, places to stay, and obtain local maps or attraction tickets. Every Chamber member has the opportunity to place brochures in the Visitor Center and accommodation members have the opportunity to participate in the Chamber's concierge program.

Jason Ingle
Managing Broker
The Buyers Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer.com

August Market Report

noreply@blogger.com (Jason Ingle) — Tue, 07 Sep 2010 21:03:00 +0000

August. as I stated in an earlier post, was decidedly slower than anticipated. Still the West and now the Eastern parts of the county are attracting the most buyers. These areas are also the areas that have the best valued homes. The under $200,000 price point still dominates the market in both sold homes and in current inventory. You can view the market report by following this link.

August Market Report

Jason Ingle
Managing Broker
The Buyers Agent of Asheville
(828) 242-7616
jason@ashevillehomebuyer.com

Quick Real Estate Round-Up with Diana Olick

noreply@blogger.com (Jason Ingle) — Tue, 07 Sep 2010 18:26:00 +0000

Where is the Real Estate Web Traffic?

noreply@blogger.com (Jason Ingle) — Thu, 02 Sep 2010 17:40:00 +0000

Based on a recent report conducted by Trulia and CNBC the list below represents the top 10 and bottom 10 cites where internet traffic is changing. What may be interesting is to see if this interest turns into something like real interest in purchasing. If so I would expect to see the same thing possibly happening here in WNC mostly because 4 of the top ten and 3 of the top 5 "winners" are in Florida where many of this areas relocation buyer comes from.
Only time will tell.

Jason Ingle
Managing Broker
The Buyers Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer.com

Losers
1 Corona, Calif. -37%

2 Bethesda, Md. -36%
3 Saint Petersburg, Fla. -32%
4 Round Rock, Texas -28%
5 Silver Spring, Md. -27%
6 Irvine, Calif. -27%
7 Washington, D.C. -26%
8 Arlington, Va. -23%
9 Harrisburg, Pa. -21%
10 Murrieta, Calif. -21%

Winners
1 Fort Lauderdale, Fla. 65%
2 Beverly Hills, Calif. 49%
3 West Palm Beach, Fla. 45%
4 Bradenton, Fla. 41%
5 Detroit, Mich. 39%
6 Saint Augustine, Fla. 34%
7 Houston, Texas 31%
8 Mesa, Ariz. 30%
9 Albuquerque, N.M. 29%
10 Palm Springs, Calif. 29%

Buyers Market Continues In Buncombe

noreply@blogger.com (Jason Ingle) — Wed, 01 Sep 2010 18:16:00 +0000

I know that it's hard to find silver linings right now with the economy the way that it is and the real estate market just crawling along. But if you are one of the fortunate people who are in the market to buy a house its hard to beat the pricing, mortgage rates, and general environment than we have right now.

The link below will take you to an analysis of the current market to see what I'm talking about. At the bottom of the chart are some green highlighted boxes. Those boxes indicate price ranges that are considered buyers markets or price points. Spoiler - they are all green. It's just a matter of how much excess inventory there is.

Inventory Report for Aug. 2010

Jason Ingle
Managing Broker
The Buyer's Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer.com

Is Another Home-buyer Tax Credit on the Way?

noreply@blogger.com (Jason Ingle) — Mon, 30 Aug 2010 17:25:00 +0000

I read an interesting article this morning concerning whispers of another home-buyer tax credit on the way sometime in the near future. Diana Olick at CNBC does a fairly decent job of keeping her ear to the ground with respect to these stories so I think it has at least some credence. You can read it here:
http://www.cnbc.com/id/38917380

I Googled "New Home buyer-Tax Credit and it returned 485 stories about the whispers.
Does anyone remember what happened in the months immediately following the last tax credit - oh wait we are in the second month after that credit expired. Sales have plummeted. Get ready for more.

Early look at August Sales figures

noreply@blogger.com (Jason Ingle) — Mon, 30 Aug 2010 16:37:00 +0000

I am a positive guy by nature and try to find the silver lining in most things. So as this month moved along I held out a good bit of hope that we could shake off the dismal sales numbers from last month and move ahead. Unfortunately, that doesn't look like it's going to be the case.

Through this time last month the market had moved 135 homes and the median sales price for those homes was $210,000

This month (August) there have only been 129 closing and the median price is $211,000.

As I write this I am listening to a news report talking about the stalling economy and specifically the real estate market. Interest rates are lower than they have ever been. The Fed. Housing Finance Board is reporting an average 4.63% rate for the month of Aug.

The long and short of it is that the housing market does not come back until the job market does.

I'll report actual numbers via blog post and video by the 6th of Sept.

July Sales Figures

noreply@blogger.com (Jason Ingle) — Thu, 05 Aug 2010 13:41:00 +0000

Sales in the Buncombe residential market slowed this month. This really isn't unusual for this time of year however. Most people are focused on getting the kids back to school and getting in that last trip to the beach. Once everyone gets settled into a new routine then they will be back out in the market looking again.

Here's a quick look at how July ended:
150 Single Family Residential Units sold (Down from 225 units in June)
Median purchase price $212,000 (Down from $225,000 in June)

West Asheville (including Candler and Biltmore Lake) was the most active area in Buncombe accounting for 25% of the homes sold in July. West Asheville (around Haywood Rd.) has been active for several months now and there aren't signs of slowing yet.

Look for more in the next few days as I roll out the full market report for July and video.

Jason Ingle
Managing Broker
The Buyer's Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer.com

The Tax Credit Goes On - Well Kind Of.

noreply@blogger.com (Jason Ingle) — Thu, 01 Jul 2010 01:52:00 +0000

The fed. gov't today announced that it will extend the time allowed to close on homes that were under contract by the end of April and eligible for the tax credit. Thing is the mortgage industry is in such a state of flux they can't seem to get the contracts processed and closed. So, in order to make sure that everyone who is entitled to the credit gets it Congress is allowing a 90 day extension for the closings to take place.
You can read more here -
http://www.inman.com/news/2010/06/29/house-oks-extension-tax-credit-closing-deadline

Unintended Consequences

noreply@blogger.com (Jason Ingle) — Tue, 29 Jun 2010 16:22:00 +0000

Anytime big changes are made int he way that we as a society do things the first question to be answered should be; "What are the unintended consequences of our actions." I know this is a difficult thing to do and all scenarios can't be foreseen, but nevertheless it's a great exercise to go through. As federal regulations tighten the mortgage industry standards, and they needed to be tightened, professionals in the real estate and ancillary fields are dealing with all of the unintended consequences of actions. I'll quickly address two here that have real life ramifications, not just theoretical ones.

1) Last year the federal government tightened and changed the relationship between appraisers and lenders. no longer does a lender have direct contact with the appraiser so they there will be no perceived or real conflict of interest. As a result appraisers, who at one time knew that the bank was ordering the appraisal and if they "killed the deal" the bank would quit using them, are now much more bold in their comments about the structural integrity of a home. So, notes such as cracks seen in the foundation, low spots in the floor, broken windows are all regularly noted on the appraisal even if none of these issues directly affects the value of the home. The issue is that the underwriters for these loans are now kicking these back to the buyer and telling them that they have to be fixed in order to close. In many cases the seller will not fix the issues, and keep in mind by this point the buyer is typically well beyond their contractual date to negotiate repairs. Or, the seller cannot financially fix the issue. So, buyers are assuming the risk of fixing the issues before closing and hoping that nothing else will cause the deal to fall apart. This risk is real and I have seen it three times in my small office in the last two months.
2) Under new Fannie Mae and Freddie Mac guidelines lenders are now required to double check the credit report of the borrower just prior to closing. Small changes in credit scores or debt to income ratios will spell big problems for closings. Both institutions are trying to guarantee that there will be no default on any loan. You can read a great article about this by linking to Smart Money.com here:
http://www.smartmoney.com/personal-finance/real-estate/borrowers-beware-the-second-credit-report/?page=all

The "market" is such a multi-dimensional thing that one should understand the unintended consequences of actions before pulling the trigger. Now you know a couple of them.

To find out more you can always call or e-mail me at: (828) 242-7616 Direct
Jason@ashevillehomebuyer.com

What Everyone Else Will Be Talking About in a Month

noreply@blogger.com (Jason Ingle) — Fri, 25 Jun 2010 14:57:00 +0000

A quick look into the sales figures so far this month (June) show a bump in the # of homes sold from May (and possibly higher than April) as well as a bump in sales price. If we get over that magic 200 number again and the ratio of below $200,000 homes sold holds I might actually be willing to say there is light at the end of this tunnel.
So again, we are hoping for strong total number of homes sold figures (a number above 200) while at the same time a relatively lower number of under $200,000 homes sold. I know that does not sound overly buyer sympathetic, but there has to be a balance between the homes sold in different price points in order to satisfy sellers desire to sell while at the same time satisfy a buyers desire to buy. Too many lower price point homes selling sends the message to sellers to "wait" therefore decreasing the inventory of available homes and increasing competition. Increased competition equals quickly increasing prices.

Looking forward into June it looks like the proportion of homes sold under $200,000 is returning to its norm of about 43% of the market. While at the same time the number of homes sold MIGHT reach over 200. Both are great signs. So look for prognosticators to be hailing the "return of the market." Maybe. One significant difference you will see is that median sales prices will be over $225,000.

As always you can e-mail or call for more details.
Jason Ingle
Managing Broker/Broker
The Buyers Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer.com

Sales Down - Anybody Care?

noreply@blogger.com (Jason Ingle) — Thu, 24 Jun 2010 15:58:00 +0000

This week all of the major reporting outlets are finally releasing sales figures for the month of May. Surprise, surprise national reporting figures show the housing sale figures down 33% from April. I loved the one that reported "Home Sales unexpectedly fall 33% Nationally." Unexpected? Really?
I wrote about this hear and sent it out in a video update to expect the numbers to fall. the only people who were buying were first time home-buyers who were enticed with the tax credit. Furthermore, it will probably be slow until the Fall.
So here's the real question: do you care??? I know people who are thinking about buying or selling care right now, but do the rest of you care. If you don't you probably should, and here's why.

1) People who buy homes are 3 times as likely to stick around in the area they buy in. As a business owner I would love to have some certainty about the employees I invest in.
2) the act of buying a home is an investment, not only in the home itself, but the community in general. A weak local housing market also points to potential issues with a community that are unappealing to people from other areas.
3) Homeowners are almost two times more likely to participate in local charitable activities. Likely because they have invested, financially and emotionally, into a community.

So, if perhaps you have taken the "ah, who cares approach" to these real estate figures I hope that you will think of it from a different paradigm when they are reported again.
As always, if you have specific questions about the market here in Asheville and Buncombe County fell free to call or e-mail me directly:
Jason Ingle
Managing Broker/Broker
The Buyers Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer

Perspective from Time Away

noreply@blogger.com (Jason Ingle) — Mon, 21 Jun 2010 15:26:00 +0000

I'm back to blogging and tweeting after about a month away from it to gain some perspective on the market. Too often if you get too close to just the numbers side of the biz you lose perspective on the "gut" side. I really needed to get out in the field with my clients and view more from their perspective and a little less from mine. Here are a few things I learned in the past month:
   1) There is a real return to simplicity out there. Buyers are paying much more attention to the basics rather than the luxuries of home ownership. Smaller communities with smaller homes are likely to see a return over teh next year.
   2) Buyers are much less likely to hang their retirement or their kids college tuition on their home. People are starting to stop viewing their home as a piggy bank.
   3) The home-buyer tax credit is still effecting the market. Some positives - younger buyers are more energized about buying, pricing pressure is pushing home prices down in several segmants of the market.

None of this, I suppose is a huge revelation to most people, but in order to really understand the market a professional broker will analyze the market and the consumer in order to really understand the dynamics of what is going on.

For more information about the local market or if you are considering a purchase please contact me directly at (828) 242-7616 or e-mail jason@ashevillehomebuyer.com

Real Estate and Campfires

noreply@blogger.com (Jason Ingle) — Wed, 05 May 2010 15:50:00 +0000

I've been watching and waiting. I wanted to see the magic number of 200. I'm fixated on it - maybe to the point of being unhealthy. Well I finally got to see it. For the first time in 20 months, since July of 2008 the Asheville real estate market moved just over 200 single family homes. So, you wold think I would be jumping for joy - right? Well it just doesn't feel - real.
I equate it to the campfires I have a hard time getting started. I never was a boyscout so I never learned the correct way of getting the old campfire going. So I turn to what I know best - flammables. I get a small fire started and them douse it with lighter fluid. And I keep doussing it until it bends to my will and submits by burning anything I throw in there. Truth is, in most cases it burns really well for about two minutes and then turns into a wimpy mess of a flame. I've seen those guys out there though. The guys whose eagle scout leaders taught them all about preperation and the relationship between oxygen and a great fire. They "build" this monument and set it ablaze and it burns big and long.
I'm not overly excited about the market right now because the government has acted like me and my campfire. They threw a lot of lighter fluid on the fire and hoped that it would cause a great fire. Instead the fire is going to go out, or at least burn without real luster until someone learns the relationship between the larger economy and the housing market.
So, as everyone is out there cheering wildly for the increase in home ssales just remember it's only eight o'clock around the campfire and it might be cold around midnight. Anybody know a good eagle scout?

Early Look at April Sales Figures for Asheville

noreply@blogger.com (Jason Ingle) — Mon, 03 May 2010 17:30:00 +0000

It's still early and the numbers are still coming in, but April looks like a pretty decent month for real estate sales here. I posted last week that I saw evidence that the market will look great from the outside but to be patient and let the tax credit fade before making any sweeping statements about where we are headed in the near future.

So far for April we are sitting on 193 total units sold (our biggest month in a couple of years)
Median price is $186,000 which is about where we were last month.

Homes under $200,000 accounted for 55% of the homes sold. That's higher than the historical average over the last three years. That norm is around 42%. Evidence that the tax credit is hard at work.
A real bright spot is that homes above $200k accounted for 45% (84 total homes sold) of the total market and that is an increase of about 13% while the under $200k price point only increased 5%. I really feel like the health of the market will be seen here before the under $200k price point.

More to come in a few days once all of the numbers have been registered.

Jason Ingle
Managing Broker
The Buyer's Agent of Asheville
(828) 242-7616
jason@ashevillehomebuyer.com

At The Risk of Sounding Pessimistic.......

noreply@blogger.com (Jason Ingle) — Thu, 29 Apr 2010 14:07:00 +0000

So just as I wrote here last week, the homebuyer tax credit is working. Here in Asheville it is very obvious. At the begining of this week and near the end of last week there was a great deal of reporting on March sales figures and the now coming "upswing" in the real estate market nationwide. Even some local professonals got in on the act and reported the light at the end of the tunnel.
Here's where a hint of pessimism comes into play. If you take time to really study the numbers over the last three months and compare them to the averages over the last few years you would notice that the average percentage of the market that has been sold under the $200k price point is around 43%. For the past three months that number is just above 56%. What that says is that the market is dominated by an unusual number of people cashing in on the tax credit. If the market were indeed turning there would be, at the very least, comparable percentages above the $200k price point being sold. The numbers just don't tell that story. Historically, the sold units above $200k have comprised 55-57% of the market. This year- 44%.

These percentages would be ok if the raw sold numbers were higher, but they aren't. Normally, the market sees at least 200 single family residential units sold per month. Our best month this year, March, had only 175 closings.

Ok, so this isn't all bad. If you are selling your home the market is not going to get any better in the under $200k price point than it is right now. Over $200k you will probably see a continuation of the same market for the rest of this year. On the flip side, if you are buying you are in for a long buyers market. As a matter of fact the market will get better for the under $200k price buyers in the coming months once the tax credit buyers leave the market and sellers vie for the few buyers left over still looking.

Until the national job market straigtens itself out there will not be a return to a healthy stable local market. The Asheville market is dependent in a great way to people buying from other parts of the US and moving here. If they are worried about their job they aren't going to make a substantial move.

Great news for buyers! High inventory and low competition equals great deals!!

Jason Ingle
Managing Broker
The Buyers Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer.com

New Property Tax Numbers Based on 2006 Values!

noreply@blogger.com (Jason Ingle) — Wed, 28 Apr 2010 14:20:00 +0000

Over the past week I have fielded phone calls from past clients and friends about their new property tax assessments. I have seen values increasing in the neighborhood of 25-35%! When pressed about justification of the new property tax values, the tax dept. freely admits that the new tax numbers are based on values from 2006 since that was the last assesment year.
Someone really has to take the time to explain to me how values from 4 years ago have any relevance on property values today. I guess they could make an argument that the values are based somehow on an aggregate number over the four year period, which is what I understood to be the case. However, at least in one case where a client of mine just received a new tax value $70,000 higher than he paid for the house last year (which coincidentally was newly built last year and didn't even exist in 2006) the tax dept told him that the value was based on the values in the area in 2006 and if a real estate professional could bring in evidence that values were lower in 2006 then they would look at it, but don't expect it to change much.
So please if there is someone out there with some reasoning behind using four year old values please enlighten the rest of us who are paying!

Jason Ingle
Managing Broker
The Buyers Agent of Asheville
Jason@ashevillehomebuyer.com
828-242-7616 Direct

Home Prices-Rising or Falling-Two Theories

noreply@blogger.com (Jason Ingle) — Tue, 20 Apr 2010 19:14:00 +0000

In the world of real estate the most ofter asked question to professionals is - "What is the market going to do in the next month, year, decade," whatever parameter fits for that specific buyer or seller. It's an impossible question to answer because the truth of it is nobody really knows. Some brave people will step out and make predictions and if one gathered all of these predictions together they would find that half are wrong and half are right.

More important than making predictions would be to offer some theory of what could happen and why. I have been watching closely the real estate market here in Asheville and it is fascinating to see how the buying public is reacting to the tax credit offered by the government and moreover how the real estate professionals are explaining pricing.
The tax credit is absolutely affecting the market. Since the beggining of this year (2010) more than half (257 of 485 homes) were sold under the $200,000 price point. Median purchase price last month in March was $188,000, the lowest since the first quarter of 2006. West Asheville, where many of these homes are, is reminiscient of days back when the homes were selling in the mid $80,000's. In this price point there is a sellers market without a doubt. (lots of buyers competing for a few great homes.)

So, what happens when the tax credit goes away? That's a great question and I have two theories; you can decide which one you like better and run with it.

Theory 1: Right now so many people are buying in the $200,000 price range and below looking for a house to cash in on the tax credit. This is creating high demand for that product thus increasing the normal sales price of those homes. If a buyer is not careful he/she could end up easily over-paying for a property in that price point and losing the value of the tax credit altogether. Theory 1 would suggest than when the tax credit goes away so too will those buyers, leaving only a few buyers competing for the homes left over. This would be a classic buyers market - meaning prices go down. So, based on Theory 1 you will likely see prices continue to fall to attract the small number of buyers in the market.
Theory 2: Something else to think about altogether is that these buyers may disappear altogether leaving only those scant few who are actually buying in the $300,000 plus segment of the market. If this happens there will be a dramatic downward affect on units sold, but a positive affect on sales price.

I tend to think that a little of both is likely. Certainly when looking specifically at the under $200,000 price point you will see a dramatic falling off of homes sold and of purchase prices. However, there will be a continued, although not robust, buying of property above the $300,000 price point. We are very likely to see the average sales price go up for the entire market, but that does not mean that the guy who just bought a $160,000 house in West Asheville will be flush in equity, no his property may likely be worth $150,000 in less than two months.
That's why it is important to understand that the value of a home and the likely sales price of a home are two different things and understanding the difference could make all the difference in the world. Also, that the value of a home is dictated by other homes that are similar, not the homes that sold in a different neighborhood and in a different price point.

Jason Ingle
Managing Broker
The Buyer's Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer.com

March Market Report - Is the Tax Incentive Working?

noreply@blogger.com (Jason Ingle) — Wed, 14 Apr 2010 14:22:00 +0000

The numbers are all in and it is conclusive; the tax incentive is working as I believe the Federal Gov't wanted it to. There are many more buyers taking advantage of the credit and coming to the market and buying. So, what has the affebt been here in Buncombe County?
Well, to start with, March was the busiest month the real estate market has seen in about 8 months. There were about 175 single family residential homes sold in Buncombe County in March which is up from about 135 in March of 2009. The other side of the coin is that the median purchase price is down to about $185,000. That's the lowest first quarter median price since 2006.
The overall affect of the tax credit in the short term has been that many more people have been able to make the decision to purchase. The one thing to be careful of is the "ficticious" market that it is creating in this segment of the market under $200,000. This is where the first-time homebuyers are buying here in Asheville. Anytime that you increase the number of buyers in a market you also change the face of the market. Right now, specifically in West Asheville, it is actually a sellers market and its not uncommon to see competitive offers. The thing to really be concious of is that after the tax credit is gone so too will the demand for those homes. This could mean that the prices will fall even further. Just know now that you will see some value loss in your home in the short run. Hopefully, in the long term you will be fine.
If you read nothing elsse read this: It is imperative that you, or your Realtor, do a comprehensive CMA (comparative market analysis) and that both of you understand the pricing and the strategic goals of your plans for the imediate future. A good rule of thumb is that if you are going to be in the home for 3 years or less then you have to make sure you are not coming anywhere near the going prices. If you are going to be in there for more than five years then you have a little more flexibilty.

If you have questions about the Asheville real estate market or about specific homes please call or e-mail anytime.

Jason Ingle
Managing Broker
The Buyer's Agent of Asheville
(828) 242-7616 Direct
jason@ashevillehomebuyer.com