The WNC real estate market has experienced several shifts over recent years. However, throughout 2024, the market began to restabilize, according to Broker in Charge at Looking Glass Realty and incoming Hendersonville Board of Realtors President Candi Guffey, though various challenges still persist in this sector.

In Henderson County, an estimated 10,000 new housing units need to become available within the next five years to meet current and future housing demand, with at least 2,000 of these units needed for low to moderate income households (low income for a family of four in Hendersonville is $86,100 annually).

Hendersonville’s housing supply was constrained even before Hurricane Helene. Over the past decade, household growth outpaced new housing construction by about two to one, and rental and for-sale vacancies dropped below 2%. Various household types live in unaffordable or low-quality housing, and more than 80% of these households are of low to moderate income.

Across Western North Carolina, according to state estimates, approximately 126,000 housing units were damaged by the storm. Within the city, the lowest income neighborhoods have the greatest exposure to flood hazards.

Analyzing the number of housing units, overall volume is up and the number of units sold is down, which means residential home prices have risen. From the end of September when Hurricane Helene came through the region until the end of November, sales in Henderson County were down by 17%, and Buncombe County home sales declined by 50%. Before the storm, rates of year-over-year sales decline were 1% and 3%, respectively. Year-to-date trends through November 30, 2024 showed a more minor impact, with Buncombe sales declining 13%, and Henderson County down by 3%.

“That time frame is significant,” Guffey said. “That’s where we’ll see the most direct impact from the storm, but it’s also a really busy selling season. I would say that we rebounded quickly and made up for our lost time from when transactions weren’t possible.”

Both Buncombe and Henderson Counties have proposed construction projects, with several currently underway. Guffey believes when completed, these projects can help capture some of the demand from before the storm.

“I think there are a lot of factors coming into play,” Guffey said. “I think what we’re seeing that came to a screeching halt was discretionary buying, but the majority of the housing market is the regular need of real estate. It’s a basic need, so it’s not something that can be put on hold for very long.” 

The majority of those suffering from lost or damaged homes are opting to renovate or rebuild rather than purchase a new home. Increased prices paired with higher interest rates can make a new purchase cost-prohibitive.

In 2021, interest rates were at historic lows — below 3% on a typical mortgage. For reference, the same buyer who qualified for a $500,000 home loan with 2021’s interest rates would only qualify for a mortgage of $330,000 with a 6.25% interest rate. When rates recently elevated to around 8%, that same buyer only qualifies for a loan of about $290,000. At the same time, property values have skyrocketed by about 40% in the same timeframe, and homes in the high $200,000 and low $300,000 ranges are very hard to find.

“This is a big obstacle for buyers right now,” Guffey said. “It really squeezes you out of options. The new construction communities proposed to address housing needs are often, at a baseline, priced at more than $400,000. This has been the biggest impact on the housing market — the timing of value appreciation with climbing rates.”

While these shifts may affect buyer trends, Western North Carolina is still an end-game destination, according to Guffey. During slow times in the national real estate market, people continued to relocate to the region, whether to work or retire. During COVID and with the increased ability to work remotely, many younger families have moved to the area, and increased industry during the last 15 years has increased this draw as well.

Currently, forward-looking market trends are difficult to predict. The large hospitality industry was already struggling to find affordable housing, and living through two months or more with no job following Helene caused some residents to leave the area.

“Asheville is still figuring out if these people will return or not,” Guffey said. “Henderson County wasn’t as uniformly impacted, so we have rebounded differently and I think more quickly. I heard a local leader say it’s like an oasis now for surrounding areas that still may not have things restored yet. As things in Asheville are restored, the demand may start to feel again like it did in 2021. There’s the beauty here that you can’t replace from anywhere.”

A decline in tourism may also impact the short-term rental market. Many area rentals are vacant more often than they are booked, and many of these owners do not have the kind of savings to sustain these properties for extended periods of time. Some homes may return to the market for sale, and some may transition to long-term rentals. Guffey noted clients are choosing to operate long-term rentals due to over-saturation in the short-term market.

When making a primary home purchase, buyers typically prioritize four objectives — location, condition, size, and price. Compromises are inevitable. As price is currently dictating the majority of purchases, buyers without funds to make upgrades must opt to sacrifice location, and Guffey said this typically means about 1,000 feet less in elevation. Buyer expectations may shift if the current market trends continue. Even if additional housing units become available in the region, they may not be at a price people are willing to pay versus what they’re leaving. 

While buyer demand is still present and likely to increase as tourism and business activity returns to the area, sellers must be strategic. Pricing high may seem like an attractive idea in order to leave room for negotiation, though if the house does not sell quickly, extended days on market can prove to be a critical mistake.

“Days on market is an indicator of interest,” Guffey said. “Desirability and competition formulate buyer offers, so if a home has been on the market, it’s an indicator. When I see a price reduction, I know that is not what price we’ll be offering. It’s like a double-edged whammy against the seller to start out high and come down.”

Buyers and sellers can both make beneficial decisions in the real estate market with the guidance of local real estate professionals. The National Association of Realtors settlement in mid-2024 caused some confusion and misconceptions around how real estate agents were paid as well as the general need to hire a professional; however, North Carolina already follows stringent regulations.

“This is the biggest asset of your life,” Guffey said. “This is the thing you work your whole life for and put your savings into, and it is a complicated and tedious process. My advice is, no matter who you work with, hire someone to represent you in this process so that you are informed and you get the best outcome.”