The North Carolina real estate market is a great choice for real estate investors. Durham, NC is home to roughly a quarter million people. However, Durham is the heart of the Durham-Chapel Hill area, home to about half a million. It is also square in the middle of the Raleigh-Durham-Chapel Hill metro area; that’s home to just over two million people and includes the state capitol.
It also presents an excellent opportunity for real estate investors. Job opportunities and moderate house pricing have contributed to the excellent growth of the Durham real estate market. The Durham housing market has made considerable improvements since the housing bubble burst. Only two years after the market crash in 2008, Durham was considered one of the few favorable locations to invest in real estate.
With strong population growth and a solid economy, the rental demand in Durham, North Carolina is continuously increasing. Durham real estate market is strong due to the popularity of the Triangle area among new and out-of-state residents, as well as investors. Real estate investors have a particular interest in the Durham and Raleigh areas which both have an increasingly educated and growing population, as well as a diverse economy employing its base.
Durham Housing Price Trends 2023
The Durham housing market is experiencing significant changes in 2023, according to the recently released report by the Durham Regional Association of REALTORS® and the Triangle Multiple Listing Service (TMLS). This report provides valuable insights into the current state of the market, which can be useful for buyers and sellers planning to enter the market this year. Here is a closer look at the report and what it means for the Durham housing market in 2023.
New Listings and Under Contract Sales: A Decline
According to the data from TMLS, new listings in the Triangle region experienced a notable decline of 22.7 percent compared to the previous year. This decrease indicates a potential slowdown in the number of properties available for sale. Concurrently, under contract sales also experienced a decline of 7.2 percent, suggesting a slight decrease in buyer activity during this period.
Inventory Levels: An Increase in Supply
One significant change in the Durham housing market during April 2023 was the notable increase in inventory levels. TMLS reported a substantial 51.2 percent increase in the number of units available for sale, reaching a total of 4,722 units. This increase in supply might offer buyers more options and potentially contribute to a more balanced market.
Closed Sales and Median Sales Price: A Decrease
In April 2023, closed sales in the Triangle region experienced a decline of 16.6 percent compared to the previous year. This decrease could be attributed to various factors, including the decrease in new listings and under contract sales. Additionally, the median sales price decreased by 3.6 percent, settling at $400,000. This decline in median sales price could be indicative of a slight shift in market conditions and potentially offer buyers an opportunity for more affordable housing options.
Days on Market and Months' Supply of Inventory: An Increase
The data reveals a significant increase in the average number of days on market, which rose by 170 percent, reaching 27 days. This increase indicates that properties are staying on the market for a longer duration before being sold. Moreover, the months' supply of inventory, a measure that reflects the number of months it would take to sell all current listings at the current sales pace, increased by 87.5 percent, resulting in a supply of 1.5 months. This increase in supply might offer buyers more choices and potentially contribute to a more balanced market.
Housing Affordability Index: A Decrease
The Year-to-Date Housing Affordability Index, a measure of housing affordability for the region, stood at 80 in April 2023. This index, provided by the National Association of Realtors® (NAR), indicates a 9.1 percent decrease compared to April 2022. A higher index value signifies greater affordability, and a lower value suggests a decrease in affordability. This decline in the index could imply potential challenges for buyers in terms of affordability.
Durham County Housing Price Trends
- Median Sales Price: $415,000 (-2.4% year over year)
- Average Sales Price: $454,602 (-0.1% year over year)
- Median Days On Market: 21 (+133.3% year over year)
- Percent of Original List Price Received: 100.5% (-6.3% year over year)
Durham County Sales & Housing Supply
- Closed Sales: 358 (-21.1% year over year)
- New Listings: 405 (-27.7% year over year)
- Inventory of Homes for Sale: 407 (+1.5% year over year)
- Months Supply of Inventory: 1.1 (+37.5% year over year)
Durham Housing Market Forecast 2023-2024
Durham, North Carolina is going to see heavy population growth over the next decade. Another seventy thousand people are expected to contribute to the demand for properties in the Durham real estate market overall. Some of these are people relocated for work. And many are the students who attend local colleges, stay for jobs, and then choose to start their growing families here. That relatively young population helps explain the roughly half of residents who rent and they're smaller than average household size.
As they grow out of studio apartments and into single-family homes, they drive demand for rented houses and property purchases. But the availability of jobs means many growing up here will stay here for school and work themselves, contributing to the sustainable long-term growth of the Durham housing market. The limited inventory and strong demand led to increases in prices for homes in the Durham real estate market.
Durham – Chapel Hill MSA comprises Chatham county, Durham county, Granville county, Orange county, and Person county.
- 564,273 Population [2010] – census
- 649,903 Population [2020] – census
- 1.4% Annual Population Change [2010 → 2020] [Citypopulation.de]
- Source: U.S. Census Bureau (web)
Durham County in North Carolina (USA)
- 326,126 Population [2021] – Estimate
- 0.32% Annual Population Change [2020 → 2021] [Citypopulation.de]
- Source: U.S. Census Bureau (web)
Durham Housing Market Forecast: Positive Growth and Strong Demand
The Durham-Chapel Hill housing market has shown resilience and growth over the past year, and the forecast indicates a continuation of these positive trends. According to Zillow, as of April 30, 2023, the average home value in the Durham-Chapel Hill area stands at $390,198, reflecting a 1.8% increase over the past year. This upward trajectory in home values suggests a healthy and appreciating market.
Looking ahead, market experts project a 6.0% increase in the Durham-Chapel Hill housing market over the next year. This forecast indicates that home values are expected to continue their upward trajectory, offering potential benefits for homeowners and investors in the area.
One indicator of the market's strength and demand is the speed at which homes go pending. In the Durham-Chapel Hill area, homes typically go to pending status in approximately 6 days. This swift pace signifies high demand from buyers, as properties are being snatched up quickly. Buyers in this market should be prepared to act swiftly when they find a property of interest.
Another metric to consider is the median sale-to-list ratio, which was reported as 0.991 as of March 31, 2023. This ratio suggests that, on average, homes in the Durham-Chapel Hill area are selling very close to their listed prices. This indicates a balanced market, where sellers are likely to receive offers close to their desired listing price.
Additionally, the data reveals that a significant percentage of sales are happening above the list price. As of March 31, 2023, approximately 31.3% of sales were reported to be above the list price. This competitive environment indicates a market where multiple buyers are vying for the same properties, potentially resulting in bidding wars and higher sale prices.
Conversely, 52.5% of sales were reported to be under the list price. This suggests that buyers still have opportunities to find properties at a price lower than the initial listing. It's important to note that this percentage can vary based on various factors, including location, property type, and market conditions. Buyers should work closely with their real estate agents to identify potential opportunities and negotiate the best possible deal.
Durham Real Estate Investment Overview
Durham, North Carolina, has become a prime location for real estate investors looking to tap into the growing economy of the Research Triangle Park. The city offers a wide range of real estate investment opportunities, from residential to commercial properties. With its strong job market, favorable tax policies, and affordable cost of living, Durham is a great place to invest in real estate for the long term.
One of the primary reasons to consider investing in Durham real estate is the city's strong and growing economy. The Research Triangle Park, which includes Durham, Raleigh, and Chapel Hill, is home to more than 250 companies, including major players in the technology, healthcare, and finance sectors. This concentration of high-tech companies has led to significant job growth in the area, with Durham's unemployment rate currently sitting at just 2.8% (Dec 2022).
Durham's affordable cost of living is another factor that makes it an attractive destination for real estate investors. The city's median home value of $375,242 is well below the national average, and the cost of living is 8% lower than the national average. This means that investors can purchase properties at a relatively low cost, while still enjoying a strong return on investment.
Top 6 Reasons to Invest in Durham Real Estate for the Long-Term
- Growing Economy: Durham is one of the fastest-growing cities in the United States, and this is largely due to the growth of the Research Triangle Park, which is home to some of the world's leading technology companies, such as IBM, Cisco, and Lenovo. This concentration of high-tech companies has led to significant job growth and a booming economy, making Durham a stable and thriving market for real estate investors.
- Job Growth: Durham's job market is strong, and it is continuing to grow. The city's unemployment rate is well below the national average, and there is a steady stream of well-paying jobs being created in the technology, healthcare, and finance sectors. This creates a stable source of rental income for real estate investors, and it also means that there is strong demand for homes to purchase.
- Affordable Cost of Living: One of the most significant advantages of investing in Durham real estate is the city's affordable cost of living. The median home value in Durham is well below the national average, and the cost of living is 8% lower than the national average. This means that investors can purchase properties at a relatively low cost, while still enjoying a strong return on investment.
- Favorable Tax Policies: North Carolina has some of the most favorable tax policies for real estate investors in the country. The state has a low state-income tax rate, and there is no inheritance tax. This makes it an attractive destination for real estate investors who are looking to maximize their returns.
- Diverse Real Estate Market: Durham offers a diverse range of real estate investment opportunities, from residential to commercial properties. This diversity provides investors with the flexibility to build a diversified real estate portfolio. It also means that there are always new investment opportunities available in the city.
- Quality of Life: Durham offers a high quality of life, which makes it an attractive destination for both renters and potential buyers. The city has top-rated schools, a thriving arts and culture scene, and access to outdoor recreation opportunities. This quality of life attracts a diverse range of people to the city, creating a strong demand for real estate investment opportunities.
Buying an investment property is different than buying an owner-occupied home. The investment properties are designed to make money as rentals, which means you must look at it solely as an income-producing entity just like any other business. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor is your ability to find great real estate investments.
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Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Sources:
- https://durhamrealtors.org/market-tools/
- https://www.trianglemls.com/tmls/market-trends/
- https://www.zillow.com/durham-nc/home-values
- https://www.neighborhoodscout.com/nc/durham/real-estate
- https://www.realtor.com/realestateandhomes-search/Durham_NC/overview
- https://www.neighborhoodscout.com/nc/durham/real-estate
