Jonathan Cartu Claims Pandemic hasn’t cooled red-hot real estate market - Jonathan Cartu Residential & Industrial Construction Services
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Jonathan Cartu Claims Pandemic hasn’t cooled red-hot real estate market

Pandemic hasn’t cooled red-hot real estate market

Jonathan Cartu Claims Pandemic hasn’t cooled red-hot real estate market

Prior to COVID-19, Ford Willis of Town and Mountain Realty dealt almost exclusively with regionally based clients. “I’m from Western North Carolina,” he explains. “So the vast majority of my business has come from my local network.” But over the last few months, he continues, “I have had almost all out-of-state buyers.”

Some are relocating here for work; others have settled on Buncombe County as their retirement destination. But a number of his new clients, Willis reveals, are in search of “a little more breathing room” in response to the pandemic. Coming from places like San Francisco, Atlanta, Raleigh and D.C., these people are leaving densely populated cities behind yet are able to maintain their higher salaries via remote work in such industries as tech and finance.

“We think the real estate market here is quite expensive, which it is,” says Willis.

Research by the Charlotte-based Canopy Realtor Association backs up that assessment: In July, the median sale price for a home in Asheville was $341,000, up 2.4% from the same month last year. The average sale price was $410,012, a 3% increase. Buncombe County as a whole showed slightly lower figures but bigger increases: a median sale price of $329,575, up 7.4% from last year, and an average sale price of $388,315, a 7% jump.

BABIES AND BEARS: These days, real estate agent Ford Willis handles most of his business calls from his North Asheville home. Willis often steps outside when speaking with clients to avoid potential disruptions by his infant daughter. But he’s discovered that his backyard is a popular thoroughfare for bears, much to the excitement of the family dog. “He loses it when that happens,” Willis says with a laugh. Photo courtesy of Town and Mountain Realty

But for buyers from San Francisco, Willis points out, “They’re spending half as much as they would in California and getting twice the house.”

Amid record high unemployment and continuing pandemic-related uncertainties, Willis and other local experts believe this influx of outsiders is a major factor in the city’s current real estate boom.

In July, pending home sales in Asheville increased by 40.1% compared with last year, the Canopy data shows. And the average length of time a property stayed on the market dropped sharply, from 66 to 47 days. And while new listings are up slightly for both Buncombe and for the multicounty Asheville metro, inventory remains low both within the city limits and across the county, with sharp declines throughout most of 2020.

Due to the shortage of available properties, local agents say many buyers are looking beyond Buncombe to neighboring counties such as Haywood, Henderson, Madison and Transylvania. Homes are somewhat cheaper in the first three, though all four counties are now experiencing similar spikes in both sales and home prices.

Looking ahead, a key question remains: How long will this boom last?

Higher risk, tighter rules

Those soaring numbers are part of Asheville’s larger COVID-19 real estate narrative, stresses Linda Youngblood, senior loan officer at Movement Mortgage. Initially deemed nonessential workers under the state’s “stay home, stay safe” mandate, real estate agents saw a precipitous drop in business in the latter half of March. But mere weeks later, after the industry had been re-classified as essential, “The real estate market went gangbusters,” Youngblood explains.

Low mortgage rates, which are currently hovering around 3.18%, are a key reason for the boom, she points out. “There’s an inverse relationship between the market and mortgage rates: The more uncertainty there is in the market, the better the mortgage interest rates get.”

At the same time, continuing concern about high unemployment numbers and homeowners’ desire to take advantage of those low rates by refinancing have led to “slower turnaround times for appraisers, attorneys and underwriters,” says Lynn Davis, a loan officer at Alcova Mortgage.

That’s especially true for buyers who are self-employed. For these applicants, notes Davis, underwriters are now requiring two years of tax returns, a year-to-date profit and loss statement and an update on the buyer’s current workflow 10 days prior to closing.

Homebuyers who’ve experienced work furloughs during the pandemic also face more stringent regulations. In those cases, underwriters are requiring two 30-day pay stubs, reflecting both pre- and post-furlough earnings. A letter of explanation about an individual’s temporary unemployment is also part of the new process.

“All these extra layers of risk have been put in because of COVID,” Youngblood explains. “And that’s been hard, to ask for all these things that we’ve literally never had to ask for before.”

Navigating stress