Altamont Property Group

Western NC Real Estate – COVID Impacts and Observations

Authors: Collin O’Berry and Chris Gragtmans

There’s not doubt that COVID-19 will change many aspects of our daily lives. From how we provide healthcare, how often we dine out, how we work remotely, even the ways we educate our children, many realities of how we live our daily lives are changing in a very short period of time. All considered there are certainly changes on the horizon, and how one adapts to change will be a primary determinant of success achieved over time.

Pertaining to Western NC and real estate, we’ve certainly seen some disruptions over the usually busy Spring season. Since COVID-19 related travel bans and Safer at Home orders went info affect in March, this effectively put a stall on most in-person showings and other third party availability to assist with real estate transactions, including attorneys, home inspectors, appraisers, etc. Yet how has this affected the local market, and what does the outlook for the future look like?  There’s no crystal ball to tell for sure, and different aspects of the market will be affected in different ways. We’ve briefly outlined these affects and provided a few observations below.


April residential sales and new listings on market in Buncombe County were both down nearly 50% when compared to 2019, solely due to COVID-19 impacts. Yet one metric to notice is that prices are staying stable in most price ranges, even appreciating for properties in sought-after locations. This is presumably due to the limited stock of availability, as many people decided not to list their homes during pandemic restrictions. Buyers have less inventory to choose from, and the ones who need to buy are doing so. We’ve noticed that bidding wars are becoming more common for desirable properties. Days on market numbers are also down when compared to 2019 numbers. Historically low interest rates are also fueling buyer demand for the buyers that have the capability to purchase. It’s important to note that sellers in sought after price ranges and locations have a tremendous opportunity to cash out realized equity while prices are still at historic highs, and purchase replacement properties with historic low interest rates.

The lowest price ranges ($300,000 and less) are seeing the most competition with the least amount of inventory on the market. In fact there is an average of 1.5 months of inventory for houses 300k and less in Buncombe, which is 25% of the inventory we need for a balanced market of 6 months of inventory. For houses in mid-price ranges ($300,000 – $650,000) we have a blended average of 3.2 months of inventory, still indicating a sellers market. The luxury price ranges ($650,000+) show a different side of the spectrum in Asheville real estate, with a blended average of 10 months of inventory and a disproportionate amount of $1M+ houses on the market. The luxury price ranges are highly dependent on out-of-town buyers, whose ability to visit has been limited.  Another observation is we expect a stall in new developments involving extensive land grading and spec build projects until builders feel that consumer confidence and spending power is returning. From the home builders we’ve spoken with,most demand is being seen from requests for custom home builds.


The commercial real estate markets are where we anticipate the biggest impacts to local real estate. It’s no doubt that many businesses are struggling, leaving them unable to pay rent. Rent deferral discussions are becoming common with landlords, and most business owners are getting creative to allocate their capital and resources to keep their business afloat. This crisis has accelerated both teleworking and online shopping, which will have detrimental effects to both retail and office real estate holdings. We expect healthcare and medical office to see some affects, how much so depending on the focus and specialization of the trade. Hospitality has been hit hard for obvious reasons, and this will be a slow rebound as consumer confidence in travel returns. Restaurant and food service holdings will also see detrimental effects and their rebound depends on consumer confidence and spending power. Unfortunately we know of many local restaurants that do not plan to reopen and others that are barely hanging on financially. Industrial space should weather the storm relatively well, depending on COVID effects on tenants and businesses. Although we are seeing rent payment disruptions due to COVID-19, we expect multi-family and rental investment properties to remain reliable investment vehicles in our local market. Housing demand in the Western NC region has remained strong and all data points towards this trend continuing.

One important factor to note is commercial financing has all but stalled until lenders can further assess upcoming risk for their loans. Loans that have been in the pipeline are generally closing, and new loans are becoming harder to underwrite. This is making it very difficult for any new commercial real estate transactions to close, and this will continue for the coming  months.


The amount of interest we’ve seen in Western NC land has been quite interesting to observe. As experts in the Western NC land market with a strong online presence, our phone has been ringing with buyers interested in investing in quality mountain land. Their reasoning has been different, yet all seem to be looking for a respite from larger cities and a way to “return to the land”. Land also is viewed as an attractive long-term investment vehicle because there is and will always be a finite supply of land available – you cannot make more of it! While land generally does not cash flow like commercial or residential investments, property appreciation and the ownership of natural resources (timber, fresh mountain water, etc) are also prime factors driving interest in land. Call it the “prepper mentality” if you will, yet there is certainly merit for owning a tangible asset in natural resources that you can visit, use, and enjoy with reasonable holding costs. We expect this interest in Western NC land to continue, and values will be determined by the quality, existing improvements, and location of the land.


Where will the investment opportunities be? It’s important to note that real estate declines/increases tend to lag behind the stock market by about 6 months. We’re only in the 3rd month of COVID-impacted rent payments being due, so the true affects will become fully apparent over the Summer and Fall.The affect on residential sales pace will depend on how many people choose to list their homes for sale, if inventory stays low than market demand should keep a strong residential sales pace. Distressed commercial real estate properties are certain to become more common. How these commercial properties will sell, and for how much, will be determined by their location and asset class. For example it will be harder for landlords to fill vacancies in restaurant and retail spaces with quality tenants, which affects their property valuations should they decide to sell. There will be deals coming available for investors who can utilize their skill in filling vacancies, or repurpose their holdings to establish cash flow in a changing business environment. The land market still has many opportunities available depending on the use and investment needs of the buyer. Please note that no real estate investments are immune to risk or offer guaranteed returns, yet informed investments made based on data and market trends for what is on the horizon greatly increase an investor’s likelihood for success.


All considered, so there are certainly effects on the horizon that we will continue to monitor across all segments of the real estate market to relay accurate information to our clients. Despite the many obvious economic challenges upcoming, we hold a generally positive outlook for the Western NC real estate markets. North Carolina has ranked among the top 5 fastest growing states over the prior decade from inbound migration, and this is expected to continue. Our area has always been a popular place to visit and enjoy. People are coming for both relocation and leisure, and to enjoy the natural resources, culture, and quality of life that Western NC has to offer. As people from all over the country will be looking to relocate from larger and more densely populated cities, this will only increase our appeal and fuel changes to our economy and real estate market.

Questions? Comments? Are you curious on how you can succeed in the real estate market? Connect with us today to discuss your real estate, family, and investment goals. Remember that the best decisions are made with expert guidance and advance planning, and we are glad to share our expertise!

Yours in service,

Collin O’Berry and Chris Gragtmans