The Year in Review 2023: What Asheville's Real Estate Data Actually Showed

AVLmeetup's January 2024 event, The Year in Review 2023, recapped the prior year: MLS production numbers, Buncombe County pricing trends, one investor's mid-year pivot, and a hard money lender's look at nine years of loans. The event ran at The Mule at Devil's Foot Beverage with co-hosts Zac Ruiz and Rodrigo Afanador, joined by Craig Peters and Jon Sarver of ALFIE Loans.

Key Takeaways

Buncombe County hit a record average home price of $701,000 in 2023, with a record median of $502,000, according to Ruiz Report data presented at the meetup.
Half of Canopy MLS realtors closed 5 or fewer transactions in 2023, same as 2022, and it took 12 or more to land in the top 25%, down from 13 in 2022. The top 25% closed more than $4 million in volume.
ALFIE Loans, the event's hard money lending panel, has written more than 1,400 loans since 2015, holds 230 active loans, and has had only 10 foreclosures ever. Its largest loan to date was $8 million, closed in 45 days.
One host's investment business, with a 286% direct mail ROI in 2022, saw that fall to 218% in 2023 and lead volume collapse from about 78 in August to 8 in December, prompting a pivot into a new property management company, Vesta Property Management, and a landscaping business.
ALFIE's standard loan runs 12 months at a roughly 12% stated rate, which on a $300,000 spec home build works out to about 8.07% effective cost of capital.

The Buncombe County Market by the Numbers

Buncombe County closed 2023 with historic price records even as transaction volume fell. The average home price reached $701,000, up from roughly $400,000 when the Ruiz Report began tracking the market in March 2020, and the median hit a record $502,000. The county also added inventory more consistently than in the prior three years, when nearly everything listed was absorbed within days.

Despite that added supply, homes kept selling fast. Median time on market stayed under 10 days across 2023, and "contract to cash," the full span from listing to closing, averaged 86 days, down from a pandemic-era high of 134. The takeaway offered from the stage: standard supply-and-demand theory, which would predict falling prices as inventory grows, was overridden by sustained demand from people relocating to the area.

Production numbers, pulled from REMC.co's Canopy MLS data, softened too. The median held steady at 5 or fewer transactions in both 2022 and 2023, but the bar for the top 25% slipped from 13 closings to 12. The framing offered for buyers choosing an agent: there is a good chance the realtor representing you did zero deals last year or is working one of their first.

A Mid-Year Pivot Away From Direct Mail

One host's investment business spent 2023 rethinking its acquisition strategy. Direct mail had been the top lead source in 2022, returning 286% ROI off roughly 1,200 to 1,300 leads and 83,300 mail pieces sent. In 2023, after switching mailing vendors and hiring a dedicated lead manager, ROI fell to 218% and cost per deal rose about $500. The vendor relationship soured badly enough that the business fired its lead manager, stopped direct mail by late July, and moved to an automated CRM.

The lead drop was steep, from 50 to 70 a month during the mail program down to 78 in August and 8 in December, with 2024 expected to run on 8 to 10 leads a month from PPC, SEO, and referrals. Two team members were redirected into Vesta Property Management and a landscaping business, a move away from convincing homeowners to sell at a discount, toward businesses where clients are already excited to spend.

ALFIE Loans: Nine Years of Hard Money Lending

The ALFIE Loans panel reviewed the fund's track record and its 2023 shift in focus. ALFIE, an Asheville-based private debt fund founded in 2015, has written more than 1,400 loans, holds 230 active loans, and has had only 10 foreclosures ever, funded by 254 investors, about 65% local, lending only in North and South Carolina.

ALFIE started as a fix-and-flip lender because banks would not touch renovation loans for investors. In 2023 the focus shifted toward spec home construction loans, driven by low new-construction inventory and steady demand despite higher rates, expanding into Columbia, Charlotte, Marion, and the Triad and Triangle. A $300,000 spec home loan carries a 2% origination fee plus legal and per-draw inspection fees, totaling roughly $23,300 over an average 8.6 month loan life, an effective 8.07% cost of capital under the headline 12% rate. ALFIE also raised target investor returns from 6 to 8% up to 8 to 9.5%, with a $50,000 minimum investment.

Questions

Do you loan to people building their own primary residence? No. The federal SAFE Act restricts ALFIE to lending to entities for investment purposes, not individuals financing a primary home; the panel pointed attendees to another lender in the room, Jason Chambers, for that kind of loan.
What's your read on the market for the next 12 to 18 months? The panel described 2023 as a return to a normal, pre-pandemic market after the COVID anomalies, with strong loan demand and a high volume of payoffs. One host said he was still buying anything that cash flows well, but was pausing on short-term projects he expected to sell after August or September.
At what point does a borrower move from ALFIE to a traditional lender? The panel called it entirely situational: ALFIE only wants to be used when it's the right fit, and construction financing is harder to get than it should be from traditional lenders, part of why the fund leaned into new construction.
What's the largest loan ALFIE has done in the area? $8 million, closed in 45 days versus an estimated 9 months through traditional financing, on a well-collateralized deal with borrowers ALFIE knew well. The panel said they would likely not do that size loan today for a borrower they didn't already know, since large complex projects bring large complex problems.
What LTV do you fund, and do you cover 100% of the rehab? On new construction, ALFIE funds 100% of construction plus soft costs and origination once the borrower owns the lot free and clear. On rehab loans, first-time borrowers bring 25 to 30% cash in, dropping to 20% with an established track record, and ALFIE funds 100% of the rehab from there.

Next month's meetup, Buildin' Buildings: RE Development, picked up the construction thread this panel opened.