Are Short-Term Rentals Driving Up Real Estate Prices?
Several factors have driven the real estate price increase in Western North Carolina (WNC). Since 2022, a limited availability of long-term rental (LTR) properties has added to price hikes. One reason for the decreased inventory is investors buying homes to convert into short-term rentals (STR).
Add in the people moving to the region and you’ve got a growing demand with shrinking inventory, which drives up prices. Some of the new arrivals are often willing to overpay for property, so it’s not just the STR conversions, which account for a small percentage of home sales anyway.
If you don’t want to wait or circumstances force you to buy now, get an independent mortgage lender on your side. The team at GoPrime Mortgage in West Asheville works to preapprove you quickly with a mortgage rate that suits your needs. Then, you can locate the perfect property so you’re ready to jump on it.
Do Short-Term Rentals Really Affect the Housing Market in WNC?
WNC, and Asheville in particular, draws its share of tourists. While STRs have had some effect on real estate prices, other factors are also involved, such as:
- More luxury homes are being built, instead of affordable construction.
- Interest rates have risen rapidly and remain unstable.
- Construction costs continue to increase, as materials and labor prices rise.
- Population growth is booming as more people discover WNC.
The growing demand for affordable single-family homes has help drive up real estate prices. As mortgage rates rise, so do monthly payments, which make it more difficult for many people to buy a home.
How Do Short-Term Rentals Affect Housing Prices?
The vacation rental industry is growing everywhere, including Asheville and WNC. While it’s good for the tourism industry, it doesn’t help those looking to buy a house. STRs affect housing in several ways, including:
- Limiting the affordability for buyers
- Reducing the inventory for first-time homebuyers
- Lowing the inventory of high-end properties that are earning big STR rates
- Decreasing the amount of housing that’s available for rent
There’s more competition than ever for a reduced supply of homes. Many people who wish to buy a home end up shopping for months, making multiple offers without being able to successfully purchase a house.
What Can I Expect in the Future?
Some experts predict many homes that were turned into STRs may end up back on the market in the next year or two. They believe the popularity of vacationing in other people’s homes with no room service or other amenities will subside. But even if that happens, which is debatable, supply problems won’t be resolved overnight.
Asheville is a charming city that has something for everyone, including scenic mountains and a vibrant creative community. It has a small-town feel while still providing many amenities of city life. So, if you’re still thinking about purchasing or refinancing a home in Asheville or elsewhere in WNC, contact GoPrime to work with an experienced local, independent lender. They provide insights into the community and the local real estate market, while searching for the most appropriate mortgage rate — so you’re ready when you finally find your home.