marketing | agents | pricing
1) According to the Asheville Chamber of Commerce Asheville is: Edgy, Artsy and Inviting
“Asheville is that type of unique, special place that lingers sweetly in your mind and memories for years to come. The city's rich architectural legacy with its mix of Art Deco, Beaux Arts and Neoclassical styles is the perfect retro-urban backdrop to the edgy energy that emanates from the locally owned-shops and art galleries, distinctive restaurants and exciting entertainment venues. Known as an art colony, a healing resort and a home to notable luminaries, statesmen and bohemians, Asheville is one of the most welcoming, vibrant cities in America.”
I have been living in Asheville for over ten years and many friends throughout the country tell me they have heard great things about Asheville, but want to know what all of the positive buzz is about. Although, clearly Asheville is no longer a secret, my favorite description includes “Asheville is a cross between Boulder, The West Village, Berkley and Santa Fe, but it’s in the beautiful Mountains of North Carolina at half the price.”
That being said, all sorts of people ranging from the young hip crowd (Think Willamsburg) to the hip retirees (Think Austin) have been flocking to the region for years, notably driving up real estate prices. In particular this major influx has been turning the rental market into a nightmare scenario for tenants (Think San Francisco).
According to a recent Zillow study, Asheville (city) Year over Year (YoY) rental rates are up 12.4%. Of the 117,000 total housing units in the county, 34.5% are renter occupied housing units. Demand from renters is clearly outstripping the supply of rental homes available. Due to the cost of construction, permitting issues, land-prices/availability and the mountainous nature of the area, very little rental supply is projected to be coming onto the market for years to come.
Being a real estate investor in Asheville, the following scenario is very common. Immediately after listing rentals ranging from $950-$1,795, consistently over 30 applicants will contact me within the first few days. The quality of tenants are getting better and better and landlords are consistently raising rents 5% per year, no problem. I have to admit that I feel bad, rejecting all of the tenants looking for homes on Craigslist, however I know they don’t take it personally. The frustrations from tenants looking for good quality homes is being felt all throughout the region. As I write this article, I am literally getting tenant after tenant (40 and counting) sending me emails about a home that I just listed and rented the first day it hit the market. I guess it’s time to remove it from the inventory.
2) According to the Asheville Convention and Visitors Bureau, Asheville has been
recognized for its splendors by dozens of magazines, Web sites and publications in
recent years. Accolades range from the designation by Frommer's as one of a dozen '
top travel destinations in the world to recognition for the Asheville area arts
community, outdoor adventures, cuisine, organic and vegetarian eats, and much more.
Having lived in some very nice abodes in La Jolla, Santa Barbara, Washington DC, Newport, RI, Seattle among other notable cities in the country, I can attest to the fact that Asheville has it all. Below are a few examples of who is saying what about the area. This being said, all of this positive press has been sending transplants to Asheville for years. A majority of them will find it a very tough going to purchase in Asheville anytime soon, since salaries are restricted in the area and affordability for many young professionals is an issue.
ü Southern Living magazine named Asheville one of the "Tastiest Towns in the South." Asheville was recognized for it's intrepid casual fare led by a tight-knit group of indie-chefs. (May 2013)
ü Asheville became America's first Green Dining Destination as the 16th area restaurant earned its Green Restaurant Certification. (November 2012)
ü Fodor's named Asheville as a Best Destination for Fall Foliage in a feature on the TODAY Show. (September 2012)
ü Readers of Condé Nast Traveler ranked the Spa at the Inn on Biltmore Estate as one of the top 75 spas on the U.S. mainland. (June 2012)
ü Outside magazine and American Rivers named Asheville among America's best river towns. (June 2012)
ü Readers of Conde Nast Traveler ranked the Spa at the Inn on Biltmore Estate as one of the top 75 spas on the U.S. mainland. (June 2012)
ü Asheville maintained its "Beer City USA" reign, tying with Grand Rapids, Mich. in the fourth year of an online poll posted on Examiner.com. (May 2012)
ü Asheville won the 2012 Reader's Choice Awards on About.com for Most Romatic Place in the USA and Canada. (April 2012)
ü Users of TripAdvisor.com pick three Asheville B&Bs among the Top 25 in the U.S. The Reynolds Mansion (#2), Biltmore Village Inn (#8) and 1900 Inn on Montford (#20) all take top honors.
ü TripAdvisor.com lists Asheville as one of its "15 Destinations on the Rise." (December 2011)
ü Zagat.com included Firestorm Cafe & Books in a list of the "10 Coolest Independent Coffee Shops Across the US."
ü Condé Nast Traveler's annual Reader's Choice Awards Poll chose two Asheville properties among the best in the nation. The Grove Park Inn Resort & Spa was rated a Top U.S. Resort, and the Grand Bohemian Hotel Asheville was rated at Top U.S. Hotel.
ü Good Morning America featured Asheville as one of its"Most Beautiful Places in America." (August 2011)
ü Yoga Journal magazine includes Asheville in its list of "10 Fantastically Yoga-Friendly Towns." (August 2011)
ü Asheville again rises to the top of AmericanStyle magazine's Top 25 Small City Arts Destinations, narrowly beating Santa Fe in the annual readers' poll. (May 2011)
ü The Donald Ross-designed course at the Grove Park Inn Resort & Spa makes the reader-nominated list of "125 Top Golf Resorts." (April 2011)
3) According to SNEVA Economics, an Asheville-based economics research company, annual employment growth is on the rise. The most current growth rate is closing in on 4%. Some of the top growth drivers include, Leisure and Hospitality (over 3,000 jobs added within the year period), Health Services (over 3,000 jobs added within the year period), Professional and Business Services (almost 3,000 jobs added within the year period). This trend demonstrates there are clearly much more professionals needing to find good quality rentals from a very limited supply of homes.
Asheville’s total employment is where it was immediately prior to the recessionary
period (180,000). As this number grows with the popularity of Asheville, new
construction can’t even come close to providing enough homes for potential tenants in
the area. With the average weekly wage ($650) well below the U.S average level
($850), affordability is an issue for the $275k and below housing market. This means
there is great housing appreciation potential for the $160k-$300k market as this is the
sweet spot in the market. With the annual population growth approaching 1% an
influx of transplants is continuing to fuel demand from both home purchasers and
4) Below is an example of why the single-family-market works as an
investment West Asheville, one of the hottest areas in town for
bohemians, professionals and commuters has a very limited supply
of homes on the market both for tenants and purchasers. In this
example, this home is listed at $197,500.
-One block from all the activity on very walkable Brevard Road (double sidewalks). Classic West Asheville 1920's bungalow on larger than normal .29 acre lot with stream/garden area. New metal roof. Gas furnace, stove, and hot water. Hardwood floors, wood burning fireplace, workshop area in basement. Kids fort in rear yard. Circular drive.
With a list-to-sell average ratio of .95, let’s say this house can be purchased at $187,000. With an average debt to equity ratio of 70% for this house, $57,000 would be put down on this home. If this home were listed for $1,350, in my experience the owner would receive over 20 emails in two days. With a cash flow after expenses at about $4,200 a year + average debt pay-down of about $2,600 per year over a 5 year period, net return would be $6,800/year. Conservatively, about a 11% return, without taking appreciation into consideration. Obviously, there are many factors which go into the purchasing decision such as deferred maintenance, interest rates, etc. but for simplicity sake this example is a very common occurrence from an investment perspective. Given the fact that rents are being raised 5% on average per year since the tenants have little supply to move into, year two rate of return could potentially gain another 1.5% per year. After taking into account rent increases, in year two a 12% return can be conservatively realized in the Asheville market. This makes Asheville a terrific investment opportunity with a limited downside as seen during the market slowdown in 2006-2009.
The old adage, Real Estate is all local and location, location, location is paramount in the investment equation. One thing for sure is that Asheville is known for it’s hospitality, local flavor and has developed a reputation as the “happiest city in America” for a reason. This could go for real estate investors as well, not only the hipsters, families, retirees and professionals who are seeking the Ashevillian way.
You can reach Dave at (www.investecrealty.com) email@example.com,
Investec Realty & Business Solutions, LLC