2010 Year End Report For Asheville Real Estate

I read a colleagues’ market report blog on our local market here in Asheville.  I believe the title was “looking up” or something like that.  It was a great report and the broker obviously had done his homework.  You must understand that different brokers, appraisers, investors, banks, etc., all have their own way to measure and analyze data.  His report was well done, however the #’s were based on a shorter time period, like 90 days.

I analyze from many different perspectives and now i tend to go with the “recent trend”, which I have declared to be 6 months.  I want at least one full cycle in my time period in order to get a true reading of the trend.

The report was fine, but the hilarious part was the comment at the bottom made by a reader.  Don’t we all LOVE those!  That’s the good stuff that makes me do a lot of that thing that they say will add years to my life.

The comment was something like, “WARNING!!!  This person makes income and profits from the real estate business and no one should believe a word he says!”

I’m laughing as I’m typing this…TOO funny!!!

Have a seat if you haven’t one already and let’s get this party started.

OUR RESIDENTIAL MARKET

…the current snapshot:

Active listings are DOWN 4.14% from a year ago.
Number of units under contract are DOWN 27.75%
Number of units SOLD are DOWN 20.27%

Last year, it would have taken 14.2 months to sell all of the active inventory if no new listings came on the market.
January, 2011 it would take 17 months to sell all the inventory.

Keep in mind that this data includes all of Buncombe County and ALL price ranges.  If you property value is above $300,000, you may want to sit down and look at this report which breaks the properties down by price ranges: REPORT

Now let’s talk Pending Ratio.  This number is derived by applying the following formula: 

# of units UNDER CONTRACT / # of ACTIVE listings = Pending Ratio
                                                                or
                                                  276 / 2,871 = 9.6%

If you’ve read my blogs last year, I’m sure you felt the tension when I mentioned that the pending ratio had dipped below 10%.  Will all 10% actually close?  Hmmm?  NO

In a balanced market one will see pending ratios as high as 20%-30% in some price ranges.  Look at the report and see where your alleged value falls.

 Ok, let’s visit with values for a minute.  I really enjoy tracking the MEDIAN sales prices as averages are about as useful as Days On Market (in an aggregate picture).  They can come in handy when comparing particular property sales.

Anyway, our present residential median price is down from last month to $199,000.  Exactly the same as a year ago this month.  Again, these are figured on the past SIX MONTHS’ SALES.

Now let’s look at the past few years’ median SALES price which is figured from all sales within each year:

2010: $198,663
2009: $205,000
2008: $221,750
2007: $228,000
2006: $217,000
2005: $197,500

I guess the “bubble” is pretty obvious from this angle, huh?  I guess this puts our residential values right around 2005 in the aggregate picture.

Of course, the banks put a whole different perspective on things now.  YES, they should make smarter loans!  I do find my feathers in a ruffle when the FDIC continues the practice of selling FAILED banks to banks who STILL OWE TARP MONEY to the U.S. taxpayers!!

Yes, I was yelling… Yep, First Bank, Troy, NC purchased The Bank Of Asheville with OUR $.

Back to biz…

You may think I practice residential real estate by these reports, however I am a commercial/investment guy and a self-proclaimed numbers junkie.

OUR COMMERCIAL MARKET

We are seeing a lot of activity…cautious on the investor’s part, but we are seeing a lot of activity.  Many would-be purchasers are leasing instead.  Many would-be start-up businesses are not, because of lack of financing.  There are investors out here with very different comfort levels for risk.  Some are holding out for the steals (short sales & foreclosures).  Others are choosing to get into private lending, taking the banks out of the equation when possible and creating their own rates of return.  Beats the heck out of savings accounts and cd’s.  These are normally offered at a lower LTV to hedge the risks.  Other investors are buying and banking as much land as possible in certain areas and this is certainly a great time to acquire income-producing properties of most kinds IF the conditions and financing is right.

Some businesses and franchisees are getting out of the real estate and selling the dirt under them, offering a nice NNN lease income to the investor.  Some products are doing much better than others in this arena.

We are getting creative out here.  I have seen very few “simple” deals in a LONG time.  It surely helps to incorporate the right brain and get the creative juices flowing in order to solve multiple problems at once.  It’s complicated, it’s a lot of fun (if you enjoy constantly being challenged).

Mostly this market is helping us establish more relationships; with more brokers, bankers, investors, tenants, landlords…oh and many tech support teams know me by name with all the cool tools and technology we have available to use now!

I’ve rambled long enough.  Got to get some rest…tomorrow is a busy day!  Going to get my hair cut by a mechanic.  I figure since he doesn’t do that for a living, I can trust him.  I’m sure he’ll give me a break on price, too.  I’ve got a fly fisherman that agreed to pull a tooth, but I can’t figure out who should do the colonoscopy…Hey, maybe a real estate agent can handle that…since they don’t do that for a living…

“He is a wise man who wastes no energy on pursuits for which he is not fitted:  and he is wiser still who, from among the things he can do well, chooses and resolutely follows the best.”—William Gladstone