The real estate landscape of the United States has seen a massive shift to support a strong seller’s market. The demand for properties is at an all-time high and inventory is at an all-time low. According to recent statistics, the national inventory average is only 3 months, this is the lowest it has been in decades.
According to Zillow, this has pushed the median cost of housing up to an average of $287,000 this is a 13% year-over-year increase. The forecasted growth next year is expected to be over 14%. This is due to increased demand and the 250% increase in the cost of building materials. The price jump has done nothing to deter prospective home buyers, the lower federal interest rates are still attracting new homeowners.
Some regions of the U.S. are seeing higher growth than the national average. States like North Carolina are seeing a boom in real estate thanks to the strong industry and still an affordable cost of living. Although traditional commercial properties are up in the air, the need for warehouse space has increased.
Will North Carolina See a Real Estate Boom?
North Carolina’s overall real estate market is being carried by a couple of high-performing city markets. Charlotte and Raleigh are responsible for nearly 10% of all real estate transactions. Raleigh in particular could be performing even better as the demand for new construction and development in this area is increasing.
Charlotte is responsible for the majority of the transactions. This is because the draw to come to Charlotte has never been higher. The city GDP has increased 59% over the past 10 years. This is due to a diversified industry portfolio including,
- -Banking & Finance
- -Cloud Technology Services
- -Business Services
The future of North Carolina’s potential real estate boom will be determined by its ability to increase the supply of units. Over the past decade, new construction has shrunk from 26.4% to just over 6%. The reduced inventory year-over-year has caused a housing shortage that currently cannot sustain the demand. Here at Catalyst Capital, our team is committed to investing into this great area in order to provide great housing options for the many people wanting to live in this great area.
As more people are continuing to be drawn to the strong economy and job market in North Carolina, the average home price will grow alongside this population boom. The effective rental rates are consistent with the national averages and therefore even those who cannot afford homeownership can still migrate to these city centers. The vacancy rate of homes for sale is hovering around 0.8% however vacant rental properties are approximately 2.9%.
The challenge in procuring building materials is proving to be challenging to get new builds on the go, with 90% of builders stating they have experienced supply chain issues. The demand for these properties has no signs of slowing down however.
Investing In North Carolina
Catalyst Capital Partners is committed to investing in our local communities. We want to continue to see vibrant, sustainable growth. This is why we have invested heavily in both residential and commercial developments across Charlotte, Raleigh, and the southeastern United States.
If you’re wanting to learn more about Catalyst Capital Partners or invest in local developments, contact our team of real estate development professionals today.