The population surge going on in North Carolina’s Triangle (Raleigh-Durham-Chapel Hill) is among the largest in the country. (Compare it to the population surge in Dallas-Ft. Worth.) That surge is expected to continue into the future as Infosys, the global technology consulting firm, just announced it is bringing 2,000 jobs to the Triangle over the next five years.
Naturally, real estate agents, builders, developers, building supply businesses are doing handstands with the Infosys news. More supply, more demand, more jobs, more money. But, middle and lower income home buyers, not so much.
The Triangle is in the middle of an explosive, growing real estate market. In the last seven years, some 653 subdivisions have been approved and some 40,888 new homes built or approved for construction. The reason for this increased supply of home? Increased demand. “Raleigh has a very strong job market…and…it’s not limited geographically, by which I mean there are no mountains or bodies of water that would inhibit growth,” said Aaron Terrazas, senior economist with Zillow.
Home prices in the Triangle area, like home inventories, are also increasing. Raleigh’s median home price is now $314,900., an increase of 16.9% from last year and Wade County, though the percentage increase is smaller because the median home prices are more expensive, has median home prices averaging between $371,900. and $419,900. in its cities.
With increasingly inflated home prices and developers tending to focus on higher end markets due to high costs of the land, regulations, labor, materials, financing costs, etc., where does that leave middle and lower income people who currently live and/or want to live in the Triangle?
“There aren’t a lot of options out there,” said Samuel Gunther, the policy director of the North Carolina Housing Coalition. “Housing is a problem for the middle class and a crisis for people in the lower class. We’re tearing down and rebuilding. We’re changing the shape of our communities pretty rapidly. It’s an open question about how folks across the economic spectrum are dealing with this.”
The Triangle’s rental housing is also becoming tighter. “People who pay more than 30% of their income for rent are considered by our Housing Coalition to be ‘cost burdened.’ 45% of the renters in Durham, Orange and Wake Counties are described as ‘cost burdened,'” said Gunther.
Triangle’s cities and counties’ governments are aware of the affordability housing problem. More and more Triangle residents, real estate professionals, elected officials, activists are encouraging state and regional entities to become involved. Gunther again, “We have examples of growing urban areas that are struggling with this housing dynamic we don’t want to emulate. Just look at San Francisco, San Jose and San Diego with median home prices climbing as much as 75% in the last five years and median home prices that exceed twice the national average.”