Its certainly no secret Asheville has been growing by leaps and bounds in recent years which inevitably has created a shortage in inventory for both homes for sale as well as multi-family rental units.  In recent years this has translated to not only record median single-family home prices but also some record multi-family property sales. With this recent history, it should be no surprise that we just beat another record for multi-family.

The Asheville Exchange apartment complex sold recently for a record-breaking $56.5 million only a year after being completed.  This 312 unit garden style development sold to Passco Companies based out of Irvine, California. This translates to a per unit cost of $181,000 with a projected CAP Rate of 5.5 and is the highest price ever paid for a rental property in Asheville.

Personally, I always try to have my finger on the pulse of the multifamily market, it’s always interesting to see out of town large scale multi-family developers going through the due diligence of site selection and then following through on such a complex and high dollar build.  It is, however, an entirely different animal when you start to see such investment changing hands so quickly for a record-setting number. These types of transactions I believe are a good indicator of the level of national long term confidence in our market that I feel should fuel a great deal of optimism within our local market.  

Such transactions obviously raise questions on the future of affordable housing in Asheville which I will cover in future posts, but let us not forget this upward trend always carries more benefits than the opposite.  Let us not forget the challenges Asheville faced prior to the recession. I often read through public forums and see the backlash the city gets for allowing these new apartment complexes to be approved. I think its important for those concerned about affordable housing options that the single biggest driver of the escalating prices within our local market has been lack of inventory.  Until these inventory shortages are no longer an issue we will inevitably see continued growth in both for sale and rental properties.

I would love to hear your ideas, how does the city of Asheville deal with the lack of affordable housing while inventory is still low?  Subsidies for future development, assistance programs for low-income households?