Three Months After a Generational Storm, Here's How Asheville's Market is Recovering

Before wildfires raged in Los Angeles last week, we set out to get an update on the situation in Western North Carolina, where its lead city of Asheville was devastated by Hurricane Helene in late September.

Asheville, an outdoorsy mountain locale with a temperate climate, vibrant arts scene, and heavy amounts of tourism, has seen its home prices rise as fast and as high as anywhere else in the state. It’s home to 95,000 residents, and the cost of living is just below the national average.

Until the storm, it had been a poster child for living in a small Southern city. Unfortunately, things have changed.

Asheville’s Real Estate: From Soaring to Falling

Investors and homebuyers in Asheville have seen markedly increased property values. However, all that was almost washed away last year when Hurricane Helene devastated the historic small city, engulfing it in water and wreaking untold damage.

According to Redfin data, the hurricane resulted in a -1.9% sale-to-list price from the previous year for a previously buoyant market. The number of homes sold dropped almost 40% over the previous year, and median days on the market increased 20%. Asheville’s real estate roller-coaster ride has been a rude awakening for investors—demonstrating how a natural disaster can wreak havoc on an economy and livelihoods.

Western North Carolina experienced almost five months of rainfall in three days, with rivers and streams gorged and overflowing. The French Broad River that runs through Asheville rose 12 feet above its banks, causing mudslides that washed away roads and bridges, and the connecting Swannanoa River reached about 26 feet. Most of Asheville’s River Arts District was washed away.

According to the North Carolina state website, the death toll in the state was 104 as of Dec. 23, 2024, with almost half of the casualties in Buncombe County, home to Asheville.

Signs of Hope

The Asheville Citizen-Times stated that the number of homes that went under contract in Buncombe County dropped by 62.5% to 57 between Oct. 9 and 22, compared to 2023.

“It’s slowly coming back,” Mike Figura, broker and owner of Mosaic Community Lifestyle Realty, said a month after the storm. “Every week, we’re seeing a pickup in the market. It’s like the light switch got turned off and getting turned on like a dimmer switch.”

Over 500 Homes Withdrawn From the Market

Asheville Realty Group states that over 500 homes in Western North Carolina were temporarily withdrawn from the market as repair damage was assessed.

According to this Vox article, FEMA’s response was widely criticized amid an election, with mistruths and accusations flying around with the same ferocity as tree limbs during the storm. Grassroots volunteers were largely responsible for getting the city back on track.

American Red Cross shelters housed nearly 1,000 people who lost their homes. Nonprofit organizations such as Operation Airdrop and individuals with military experience flew around in privately owned helicopters, conducting rescue operations and air-dropping supplies to people cut off from toppled roadways.

“People are still loving Asheville and want to move here,” Adrienne Crowther, a Realtor at Nest Realty in Asheville, told the Citizen-Times as the grassroots response kicked in. “I’ve heard from buyers recently that they are so impressed by the community response and are convinced this is the community they want to live in.”

“I’m optimistic about our community because we have shown so much support for each other in rebuilding,” Crowther added. “I think that’s where the focus really needs to lay right now. When we can get back on our feet, I think the market will be strong again.”

Slow Road to Recovery

Four months after the storm, Crowther’s optimism appears well-placed.

“The market seems to be coming back after several months of very slow (if any) activity,” Crowther told BiggerPockets. “New listings are beginning to pick up compared to November and December 2023.”

However, she feels Asheville still has a way to go: “Some of my out-of-town buyers are waiting a few months to give Asheville a chance to get back on its feet. The rental market is affected by the fact that many employees of businesses that suffered damage from Helene have left the area or are temporarily out of work. We’re starting to see that rents are decreasing a bit due to that reality.”

While the buying holding pattern could tempt investors back to Asheville, Crowther advised caution.

“At the moment, we’re seeing quite a few price reductions,” she said. “It’s important to keep in mind that our market has been impacted by three factors: Hurricane Helene, the election, and then the holidays. The last two events always slow down the real estate market. I think the acceleration of price increases that we’ve seen during the last several years will moderate.”

Crowther added:

“Just after the hurricane, out-of-state investors contacted me, which seemed insensitive and hasty. As an investor, I always try to find neighborhoods close to jobs that also have good school reputations. This is aside from the hurricane, but I still think it’s good practice. If an investor is looking for a deal in a devastated area, I think it will take a while for those areas to be rentable until businesses are able to come back and become viable once again. We have a ways to go on rebuilding infrastructure, which would affect those areas.”

Insurers Blamed

With Helene’s devastation finally dissipating, Crowther takes a balanced look at FEMA’s response, in contrast to the criticism swirling around at the time of the storm. She is not so equanimous about insurers, however.

“Despite some of the erroneous reports that FEMA was slow to respond, I can say that FEMA did a great job. Very early on after the storm, we had access challenges, with so many roads, parts of highways, bridges, etc. that had collapsed. There were more than 1,000 landslides as a result of the storm, not to mention downed trees everywhere.”

“Considering all this, the general impression is that FEMA was very responsive. Insurers are a different story, however. I’m hearing lots of stories of delayed payments, as well as inadequate payouts for the amount of damage incurred.

Final Thoughts

Extreme weather, a susceptible geographic location, and poor insurance practices are cautionary tales for real estate investors looking for towns and cities that otherwise tick all the boxes: a good economy, college town, strong tourism, and affordability. Unfortunately, all parties involved need to be cognizant of this new reality of investing and try to prepare for it.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.