Writer: Felipe Rivas
2 min read March 2021— The housing boom happening in Sun Belt cities is a bright spot in a year marred by the ongoing health crisis and the pandemic-led recession. In the Tar Heel state, a vibrant market before the onset of COVID-19, the unprecedented housing boom set a new milestone in 2020 as home prices closed out the challenging year with record growth of over 10%.
As a result of the flexibility of the remote work landscape, strong homebuyer demand and low supply, North Carolina saw a 11.4% year-over-year price gain in the fourth quarter of 2020, according to the Urban Institute. This is almost double the 6.4% growth rate the state saw in the fourth quarter of 2019.
There has been a steady increase in prices for real estate across the Triangle as supply tightens and demand increases, as well as a strong number in closed sales, Raleigh Regional Association of REALTORS® CEO Andrew Sims told Invest: about the region’s residential market throughout 2020. “It never slowed down,” he said.
Remaining essential has been a key part of the success of the local housing markets throughout North Carolina. “A closed home in North Carolina generates about $75,000 worth of investment back into the economy. The number of closed listings that took place in April 2020 accounted for more than $106 million that went back into the state’s economy. This impact really displays how essential real estate was for the economy during an uncertain market,” Sims said.
Nationally, the Triangle and Charlotte markets, two dynamic and popular markets for business expansions, have been identified by experts as big markets set to attract in-migration for the near future. The Urban Institute’s latest Emerging Trends in Real Estateopens PDF file ranked Raleigh as No 1 overall for real estate prospects and home building prospects. The Queen City ranked fifth in overall real estate prospects and 11th in homebuilding prospects.
Similarly, neighborhoods spread throughout both the Triangle and Charlotte markets dominated Niche’s 2021 Best Places to Live rankings in North Carolina with 19 Triangle- or Charlotte- market neighborhoods represented in the review website’s top 25 spots.
The work from home model coupled with low interest rates is further allowing new buyers to maximize the appeal of the Triangle and Charlotte markets. “The most significant factor driving our market is simply the number of people wanting to move here,” said Charlotte-based Valerie Mitchener, owner of HM Properties, a full-service residential real estate company.
“People have more flexibility to just pick a place on a map, which is something we used to dream about. Now, people can work from wherever,” Mitchener said. “In March through June, we had families moving from other cities who bought houses in Charlotte without even seeing the property. They would buy a house sight unseen because our pricing compared to other cities was affordable. There was this mad rush over the summer to get here and get settled. That drove up prices very quickly. Low interest rates have also been a factor because they provide greater purchasing power,” she said.
Though low inventory remains top of mind for homebuyers and real estate professionals, the prevailing sentiment is that North Carolina will be able to meet the needs of the marketplace.
“I think the market will continue to be a booming marketplace suffering from insanely high demand with a very tight inventory. We will continue to meet the expectations that Raleigh and the surrounding area will continue one of the hottest and fastest growing areas in the country, Sims said.
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