Forbes article says Asheville real estate boom has only just begun
Some might say we've been there for awhile, but a new Forbes.com article says Asheville's real estate boom is actually just beginning.
"Boom markets don't come along very often in real estate," says Forbes contributor Ingo Winzer, president of Local Market Monitor, a residential real estate "forecast company" that provides data and analysis to investors. "There haven't been any since the big crash of 2008, and before that, they were usually limited to one or two places at a time, like Houston in the mid-1980s, New York later that decade or Southern California in the early 1990s."
The story goes on to list 25 markets "mainly in the early stages of a boom." Asheville lands at number 25.
The story focuses on an analysis from Winzer's company, Local Market Monitor, which is described in Forbes as identifying potential boom markets "by calculating how much the current average home price is above the local 'income price.'"
When that gap exceeds 15 percent, "a boom is possible." Asheville's gap is at 16 percent, according to Local Market monitor.
"This is a metric we have been monitoring for over 25 years," Winzer writes, "and it has proved to be extremely reliable at identifying booms and busts in advance."
On its website, Local Market Monitor says the "Income-Equivalent Home Price" is what the average price of a home would be, "if there were no distortions in the local market, such as speculation, asymmetrical income growth [windfalls for a small segment of the population], or mismatches between population growth and new home construction."
The website further says that in all the unbalanced markets it has examined over more than two decades, "actual home prices always eventually return to the Income-Equivalent Home Price, although the adjustment process usually requires several years."
Read the full story here.