Raleigh Real Estate is Still Hot

 

The North Carolina real estate market continues to outperform its regional rivals thanks in part to favorable property tax rates. These favorable conditions have helped offset higher-than-average median home prices, allowing middle-class families to secure properties throughout the state, especially in Raleigh according to Bradley Ransome.

In today’s post, we will explore some of the conditions currently affecting the Raleigh real estate market and discuss why it continues to outperform neighboring states. Through combined market factors, Raleigh, North Carolina continues to be a hotspot for homeownership and property investment.

Favorable Property Taxes

According to a recent report published by the Tax Foundation, North Carolina has the 13th best property tax rates in the nation, setting it far above its regional rivals. For comparison, neighboring South Carolina ranked 36th in the nation while Tennessee, Virginia, and Georgia ranked 33rd, 26th, and 25th, respectively. This has helped drive a boom in local Raleigh real estate and draw in business investors.

These ratings were compiled based on existing local and state property taxes—both real and personal. Meanwhile, North Carolina’s existing tax climate ranked as the 4th best in the nation for businesses, helping to draw in national interest and local investment in brick-and-mortar storefronts.

Rising Housing Prices Could Undermine Favorable Conditions

Over the past year, national housing prices have skyrocketed, both in urban and rural areas. While it was to be expected that Raleigh home prices would also suddenly rise, the state capital has experienced a greater month-by-month increase than most other urban areas.

According to statistics published by RE/MAX, median home prices in North Carolina urban centers have risen to “record highs”, roughly 20% higher than they were just a year ago. Similar statistics published by Zillow—a leading real estate site—suggest that typical Raleigh home values have shot up a whopping 28% since last year.

This sudden increase in home prices signals a favorable market for sellers but for many first-time buyers, it means that they’ll have to wait to purchase a property. This could lead to a drop in the market and push developers to move towards more affordable home constructions.

 
Businesses are Moving In

Typical Raleighites may be getting pushed out of the housing market but business real estate continues to flourish. The favorable tax climate discussed above has largely offset the higher buy-in needed to set up shop in North Carolina’s state capital. This has translated to a surge in demand for industrial-sector real estate.

A shift towards online shopping during the outbreak and lockdown period of the COVID-19 pandemic has further solidified this surge as leading retailers are looking to expand their e-commerce fulfillment capacities. Developers are struggling to keep up with the increasing demand and new builds are quickly being bought up.

The Bottom Line

Raleigh’s real estate market is currently being driven by a combination of favorable property taxes, low interest rates, and an increasing population. While housing prices have reached record highs, the market is still favorable for sellers. Businesses are also moving into the area, helping to offset the recent increase in housing costs.