By Erica Jevons Sizemore, WRAL.com (Jan. 11, 2020)
Whether you have lived in the Triangle your whole life or just relocated to the area, it’s likely you’ve run across countless reports and ‘best of’ after ‘best of’ list bringing notoriety to the greater Raleigh-Durham area. Most recently, in the report by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC), the Triangle surged ahead once again, coming in second in a ranking for Best Real Estate Prospects in the nation for 2020. Their report ranks the top 80 cities in the country based on a number of familiar and lesser-known factors. North Carolinians can be state-proud as they review the list, because not only is the Raleigh-Durham market number two in the country, but Charlotte was reported in the number four spot. For those who live here, these reports have never come as much of a surprise – once you’re here, you get it! Simply put, the Triangle offers an incredible quality of life, competitive cost of living, and the infrastructure support necessary to sustain the area. The Triangle area is the total package.
There’s a lot the area has to offer, but what you may know is likely just the tip of the proverbial iceberg. Early on, the area was recognized not just as the seat of the capital. With two major North-South highways (I-85 & I-95) and I-40, the great location between mountains and the coast, university presence, and Research Triangle Park, the region was primed for growth. And aside from our temperate seasonal climate, proximity, thriving cultural centers boasting a battery of museums and performing art venues, there are sociopolitical and demographic trends driving continued growth projections for the area. Last year, for example, the Raleigh metro was forecasted to increase 72 percent over the next two decades. A look at some of these factors may help to understand the drivers present in these reports and the future projections for the region. Moreover, why it seems growth may appear to be accelerating and whether it can be sustained is top of mind for current residents and those considering relocating.
Businesses continue to flood the Triangle area from places like Silicon Valley, California, noting difficulty in securing the necessary workforce talent locally as employees demand a better cost of living and quality education. More employees are also working remotely, taking advantage of technology, and traveling as needed by their employers, affording many the flexibility to live where they chose for lifestyle reasons. No longer are employees relegated to live where a company is headquartered or within a service area. Many business travelers also consider the area ideal with the Raleigh-Durham Airport offering reasonable commute schedules to larger major metro areas. This concentrated talent pool, which at one time felt the need to work in New York, Los Angeles, Seattle, Washington D.C., is choosing to work in a place they feel they can live more comfortably financially, raise families or escape an ever-crowded geographic footprint – finding themselves headed toward areas considered the heartland of America. As companies and employees move here, it’s helping to push up real estate values and expansion in the Triangle area. As Mitch Roschelle, author of the ULI and PwC report observes, “If you go back 10 years and look at the average size city in the top 10, they were two to three times the size of the cities in the top 10 today.”
Steve Jones, Owner of Greenwich Home Construction and Remodeling Inc., based out of Studio City, CA is moving to downtown Raleigh this spring after living in New York and Los Angeles all his life. During his earlier years working as a bond trader on Wall Street, Steve found an appreciation for old-world architecture and started dabbling in real estate, enjoying the similarities present in the ‘art of the deal’ across large institutional investments and real estate ventures. He used the financial crisis of 2008 as an opportunity to start working exclusively in real estate. Following a visit to the area in 2014, he began looking to add Triangle property to his growing portfolio after heavily researching the area. Steve recognized that while infrastructure in Los Angeles has started deteriorating in many respects, the Triangle appeared to be flourishing. Five years later, he feels it’s not only a good place for investment but has found himself led to move his family to the area. Having bought and sold real estate in metros across the U.S., Steve posits, “I believe area residents take pride in their city, and this is reflective as you tour the Triangle. The culture will only continue to develop, becoming one of the most prominent and exciting southern cities to live.”
Interest is high among home buyers and investors with robust real estate investment returns for the area, many in the double digits. A lagging indicator of economic growth, these numbers are a direct result of demand already in place – essentially the financial impact of residents, businesses and investors answering ‘Why the Triangle’ for themselves. “While everyone does their best to anticipate future housing demand, builders are generally responding to market indicators more than predicting them,” notes Toll Brothers Raleigh Division Senior Vice President, Ted Pease. The Triangle ranked number one (with Charlotte in the number two spot) in the same Emerging Trends in Real Estate report by the ULI and PwC for Top Homebuilding Prospects in 2020. But the ranking doesn’t tell the whole story as it pertains to the status of supply and demand within the area.
Paul Kane of the Home Builders Association of Raleigh-Wake County says, “While it may appear lots of building is going on, we have been playing catch up since the recession.” During the economic recovery, area demand continued but building activity had not fully resumed. “We are on par with the new construction levels of 2003, and the area has a lot more residents now than it did then. And while we are about 60-70% of the permits pulled prior to 2008, on an adjusted basis, that number is much lower given the continued growth in the Triangle,” he contends. A shortage of labor and increased raw material and land costs have made it further challenging for builders to keep up with the aforementioned latent demand. Inventory for new homes and resale is still very low across our four-county, 2,300-square-mile region. As land becomes more scarce in areas throughout the Triangle (including Raleigh, Cary, and Durham, for instance), builders like Toll Brothers are moving into adjoining Triangle towns. Apex, Holly Springs, Fuquay-Varina, Wake Forest, Chatham and Johnston Counties have all benefited from a boost with builders and buyers looking to surrounding areas for more readily available and affordable housing options.
The Triangle has been the beneficiary of an influx of new residents befitting a demographic barbell, with a growing segment of baby boomers and 15 to 34 year-olds (almost six times the national average). As a result of shifts in area demographics and lifestyle-focused demands, home buyers for the first time in history are asking for smaller homes and townhomes seeking more affordable, energy-efficient housing options. Likewise, a boom in multi-family, suburban office sectors and mixed-use (live-work-play) developments is providing new priorities for homeowners and investors looking to capitalize on hipsturbia in our growing communities, in turn, yielding unique multi-faceted neighborhoods across the region. According to Holly Fraccaro, Chief Executive Officer of the Home Builders Association of Durham, Orange and Chatham Counties, it is important that we provide a diversified stock of for-sale housing types, “Because the Triangle is known for innovation, we therefore need to stretch ourselves to create live-work-play opportunities for all.”
To nurture this growth and keep us at the top, attention and support for sociopolitical themes will be necessary – continued efforts to improve our education, healthcare, and transportation systems in and around the Triangle among them. Always the eternal optimist, Sig Hutchinson, Wake County Commissioner, says he feels we have an enormous opportunity in our efforts to do just that. “To continue to be a leader, we need to be bettering our education and keeping our transportation moving by investing in transit options. We are the largest region without a fixed rail system. We are working on miles of commuter rail and rapid transit which will be deployed over the next 7-9 years. We haven’t seen that level of investment in our transportation system in over 20 years – it will be a huge opportunity for the area.”
While indications are that across the country we are late in an expansion cycle and past due for a typical correction, it is apparent that the Triangle area has a solid foundation – in quality of life, financial opportunity and evolving infrastructure – onto which we will continue to see future prosperity. Even as real estate sales this year had seemed to momentarily flatten, conjecture and common sense would urge that as new residents arrive, bringing their new ideas continuing to transform our diverse community, it will keep demand high. The love that one gains for our vibrant North Carolina community upon taking up residence here will most certainly drive a natural desire to work together to make the Triangle even better, tackling whatever challenges are present to keep us atop all those ‘best of’ lists into the foreseeable future. We are definitely just hitting our stride! To learn more about ‘Why the Triangle,’ we will unpack the arts and education in future issues.
Erica Jevons Sizemore is a Broker, Realtor, and Certified Luxury Home Marketing Specialist (CLHMS) with Coldwell Banker HPW & Halffull Properties LLC. Erica’s background in finance and marketing is matched with a personal passion for an unparalleled experience, love of home design and inability to sit still – always brainstorming how to better position her gregarious clients to support their lifestyle and financial ambitions in their real estate endeavors. Erica joined Coldwell Banker Howard, Perry & Walston after 12 years in finance with Morgan Stanley and having worked as the marketing director for Berkshire Hathaway HomeServices York Simpson Underwood Realty in the Triangle. With a love of North Carolina and all things Raleigh, she has been an active volunteer and committee chairperson at many of our local community standouts, among them the North Carolina Symphony, Carolina Ballet, and Raleigh Chamber, and currently serves on the board of directors for the House of Hope NC.