Author Topic: Lets talk about the Asheville, NC Market.  (Read 4922 times)

mkodom1

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Lets talk about the Asheville, NC Market.
« on: May 10, 2017, 02:10:57 PM »
So I'm sure this is happening in other places in America as well, but it seems like Asheville, NC is on a big bubble. Demand has caused real estate here to appreciate 75% or more in the past year. I work here in Asheville, and I want to buy a home here and ride my bike to work, but I'm nervous to buy into this market, where houses are selling over asking price, and there are bidding wars.

For an example, spec homes here with little to no land cost $300k plus. I am talking $150 + per square foot.

https://www.zillow.com/homes/for_sale/Arden-NC/fsba,new_lt/house,condo_type/71380429_zpid/10164_rid/0-350000_price/0-1312_mp/globalrelevanceex_sort/35.543401,-82.423382,35.359096,-82.71864_rect/11_zm/

Should I be nervous about buying into this market? Or do you all think it will continue to appreciate, and maybe price everyone else out. Some people are talking Gentrification. Just wanted to hear what other peoples opinions are on buying in these super hot markets.

Rufus.T.Firefly

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Re: Lets talk about the Asheville, NC Market.
« Reply #1 on: May 10, 2017, 03:07:32 PM »
My wife and I bought a house last year in a hot market.

If it's a house you like and will live in for 10 years, it probably won't matter too much. Over a decade, the ups and downs should even out to roughly 2% climb. The mountains around Asheville are beautiful and that's not going to change. People will always want to live there in the long run.

OTOH, if you're buying a house that you don't really like just because you want a house, you might wind up trying to sell it in 3 years. I would try to avoid this situation.

waltworks

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Re: Lets talk about the Asheville, NC Market.
« Reply #2 on: May 10, 2017, 03:35:35 PM »
Man, I get sick of hearing the "mountains here are gorgeous" stuff.

This has been true for forever. But Asheville was a backwater dump with a view (just like thousands of other Appalachian towns) until *a critical mass of cool people moved there*.

Here's the thing - the next generations of home buyers might find some other cool hip mountain town they create/want to move to. Asheville might stay popular and expensive for a long time, or over the long term it might not.

People really don't understand the sheer scale of the US sometimes when they talk about "not making any more land", I think.

-W

Mr. Green

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Re: Lets talk about the Asheville, NC Market.
« Reply #3 on: May 10, 2017, 06:47:31 PM »
My wife and I bought a house last year in a hot market.

If it's a house you like and will live in for 10 years, it probably won't matter too much. Over a decade, the ups and downs should even out to roughly 2% climb. The mountains around Asheville are beautiful and that's not going to change. People will always want to live there in the long run.

OTOH, if you're buying a house that you don't really like just because you want a house, you might wind up trying to sell it in 3 years. I would try to avoid this situation.
I hate to be a Debbie Downer but we bought our house in 2005 when things were going crazy and we still have not recovered to what we paid for the house 12 years later in the Washington DC area. We're still 5-10% under that. I do not envy anyone faced with a decision like this these days. Some of these markets are just crazy, and it sounds exactly like the housing bubble all over again, yet there are places like San Francisco that don't seem like they're ever coming down. Just remember that a house is, statistically, about the worst investment you can make if you're just living there and not producing cash flow with it. If the Asheville market was a bubble and prices dropped 40%, how would you feel about that?

I do have to say that 300k in North Carolina sounds insane to me. Typical houses in Raleigh and Charlotte don't command those kinds of prices. Shoot they barely get that in Wilmington right along the coast.

rothwem

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Re: Lets talk about the Asheville, NC Market.
« Reply #4 on: May 11, 2017, 05:52:08 AM »
Man, I get sick of hearing the "mountains here are gorgeous" stuff.

This has been true for forever. But Asheville was a backwater dump with a view (just like thousands of other Appalachian towns) until *a critical mass of cool people moved there*.

Here's the thing - the next generations of home buyers might find some other cool hip mountain town they create/want to move to. Asheville might stay popular and expensive for a long time, or over the long term it might not.

People really don't understand the sheer scale of the US sometimes when they talk about "not making any more land", I think.

-W

I do have to say that 300k in North Carolina sounds insane to me. Typical houses in Raleigh and Charlotte don't command those kinds of prices. Shoot they barely get that in Wilmington right along the coast.

Meh, 300k isn't really that nuts in Raleigh anymore.  The difference between Raleigh and Asheville is that Raleigh has an actual economy.  Asheville has restaurants, bars and tourism.  As soon as the economy slumps a bit, they'll stop coming and Asheville will fold. 

checkedoutat39

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Re: Lets talk about the Asheville, NC Market.
« Reply #5 on: May 11, 2017, 09:17:52 AM »
If you don't need to be in Asheville you can find quite nice houses all over WNC on decent plots of land for around $100k.

Babybalrog

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Re: Lets talk about the Asheville, NC Market.
« Reply #6 on: May 12, 2017, 12:32:23 PM »
Been looking for a house in Raleigh, everything near downtown is over 300k, or dilapidated.

Got back from Asheville yesterday. I would say there is a pretty decent economy there.  But much like Raleigh, I believe housing is in a bubble. I was trained in the good of days of Mortgage to income ratios of 2-2.5. But for me to buy it would be like 5:1. I just won't do it.

Asheville is growing (well Buncombe County is, not Greater Asheville). And if I recall the presentation from February. The east side of town has gentrified quickly and it may be the west side that goes next. I"d have to make some calls to confirm that though.

sequoia

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Re: Lets talk about the Asheville, NC Market.
« Reply #7 on: May 13, 2017, 11:58:43 PM »
We had a buddy who just moved to Asheville a few months ago. They bought a house, I think $350K, which I thought was a bit over-priced. I dunno anything about Asheville, so I did not say anything, but it sounds expensive for a small town. I was wondering if that area is in a bubble.

Babybalrog

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Re: Lets talk about the Asheville, NC Market.
« Reply #8 on: May 15, 2017, 08:23:44 AM »
Asheville doesn't actually get to call itself a "small town." The Census Bureau defines it as that Largest type of urban area (those of contiguous urban areas [500 people/sq mile] with total population over 200,000 [in fact 424,858 in 2010]). It's at the intersection of two Interstates (40 and 26) and has a major university, UNC Asheville, as well as several smaller ones. 

It just tries to brand it's "small town feel"

mkodom1

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Re: Lets talk about the Asheville, NC Market.
« Reply #9 on: May 17, 2017, 09:33:08 AM »
I really appreciate all the feedback. I haven't pulled the trigger on a house here yet. Still debating with people in the office whether we are in a bubble or not. What would you consider a bubble?

I agree with Babybalrog, I do not think there are good enough jobs in this area to sustain these prices. My peers who work here, can't afford housing here. Now I'm sure they will qualify for a loan, but that does not mean you can afford a house. 

So I would argue there is a bubble, and that its caused by these low-interest rates and the fact that demand is greater than supply.

I'll keep you posted with other potential properties I find outside of Asheville, in the Waynesville or Hendersonville area.

cantgrowone

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Re: Lets talk about the Asheville, NC Market.
« Reply #10 on: May 17, 2017, 10:13:25 AM »
So I would argue there is a bubble, and that its caused by these low-interest rates and the fact that demand is greater than supply.

I'm hunting out a rental property and have come to find I feel the same way about the Birmingham, AL area. I bought in 2013 outside of an area which must be in a bubble, Homewood, AL. Small houses built in the 60's have increased in value upwards of $70k in 4 years. 90% of these houses do not have a garage. I don't see how these prices can be stable over the next 5-10 years.

The house I bought has been stagnant in value which is upsetting. You're doing good putting in the time to find a great deal on a good area. The thing I want to know is what's the next upcoming area to buy into.

https://www.zillow.com/homes/for_sale/fsba,fsbo,new,cmsn_lt/house,condo,townhouse_type/1005093_zpid/0-300000_price/0-1114_mp/globalrelevanceex_sort/33.473969,-86.78651,33.458754,-86.81934_rect/15_zm/

ChpBstrd

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Re: Lets talk about the Asheville, NC Market.
« Reply #11 on: May 17, 2017, 04:21:59 PM »
$30,000 buys a mansion in Mexico, but that doesn't make it a bargain. Home values are relative to the income one can earn by living in an area. In Silicon Valley, six-figure salaries and seven-figure houses are the norm. In small-town Texas, $9/hour jobs and $50k houses are the norm. Building materials and land are minor factors. Income is everything.

The question is whether you could earn a decent profit on a lifestyle in Asheville and hit FI quickly. Maybe you could get the same pay in an area where housing costs half as much, such as OKC or St. Louis? Maybe you need to pay even more to earn NYC or California wages? It probably depends on your profession.

Various affordability calculators on the internet might help, but they usually fail to account for the nuances. For example, an area might not be considered affordable because so much of the population is low-wage, but in your profession you could live like a king while saving 2/3rd of your income.

Build a spreadsheet with your estimated cost of living at some standard and salary.com wages for your job at that location. If Asheville looks best, just do a rent vs own calculation (many posts on this board) and pick your path.

VAR

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Re: Lets talk about the Asheville, NC Market.
« Reply #12 on: May 23, 2017, 08:42:01 PM »
Hahaha "major university" I graduated from UNCA, it's very small.
I lived in AVL for years and watched housing explode. I'd say it's a huge bubble.
There's nothing economically to support the costs of housing. Most the economy is tourism and elderly medical care. People move there cling for a few years, run out of money and move away.

I came "this close" to buying an adorable West AVL cottage right by the french broad park with views of the river for 40k just 10 years ago. Now that house is probably 200k. I don't see how that huge run up can hold on. Right now AVL is still tops of all those great towns to live in, but its starting to sprawl badly and much of the cool has moved on.