With its temperate climate, a scenic location in the Smoky Mountains, affordable housing prices and proximity to big regional cities like Atlanta and Charlotte, Asheville, N.C., is experiencing unprecedented popularity.

“The locals think that Asheville had already been discovered, but I've met many people who come here for the first time and just fall in love with it,” says Kenny Jackson, senior advisor with Sperry Van Ness, a national real estate investment brokerage firm.

Asheville's quaint appeal is being reflected in its population growth. From 2000 to 2005, the city welcomed approximately 3,342 new residents, an increase of almost 5 percent, and its Chamber of Commerce expects an annual growth rate of up to 2 percent for the foreseeable future, 90 percent of it from in-migration.

One of the groups the city is proving irresistible to are Baby Boomers, with the AARP selecting it as one of its Top 10 Dream Towns for retirement. But Asheville's retail infrastructure has hardly had time to keep up its their swelling numbers. The closest shopping centers of note are in Charlotte and Winston-Salem, according to ICSC, more than 100 miles away.

The picture is beginning to change, though. Charlotte-based firms Hill Partners, Inc. and Crosland Inc. are each working on mixed-use projects in the city, for example.

Still, Asheville remains underserved when it comes to more upscale retailers like Macy's and inexperienced developers are finding it hard to get through the city's arduous approval process, says Jackson.

“Everything is being looked at with a magnifying glass — the way people are developing the project, the materials they are using, there are a lot of meetings that you have to go through to break into the historic areas,” he notes. In addition, the city's topography — the average elevation level is 2,165 feet, with the highest mountain peak reaching 6,685 feet — puts constraints on the size of any new development.

But that just means that there is more opportunity for those savvy enough to work around the obstacles, including redevelopment of in-fill areas and projects on the outskirts of the city.

Fast Facts

  • Between 2000 and 2030, North Carolina's over-65 population is projected to grow by 124 percent. It won't have the fastest-growing seniors population (that distinction belongs to Nevada where the over-65 population is projected to grow by 265 percent.) But overall, the over-65 population will grow to 1.2 million — ranking it sixth in the nation.
  • Asheville lies in the heart of Piedmont, one of eight “Megapolitans” defined by the Metropolitan Institute at Virginia Tech that combined account for 67.8 percent of the U.S. population and 26.4 percent of its counties. Piedmont is the least urban of the eight zones.
  • The American Association of Retired People ranked Asheville as one of the top 10 Dream Towns for retirement.
  • Buncombe County, where Asheville is located, contains a total of 12.4 million square feet of retail, according to CoStar data.
  • The wave of retirees moving in are expected to help push the city's median household incomes from $37,018 to $40,155 by 2011.
  • The median age in Asheville is 39.6, reflective of the fact that it is already drawing in the over-55 set.
  • Currently, the average home price in Asheville is $231,765.
  • The unemployment rate is 4 percent, slightly below the current national rate of 4.5 percent.