The real estate market in North Carolina stands out as an enticing choice for investors. Among its vibrant locations is Durham, NC, which is home to around a quarter million people. Situated in the heart of the Durham-Chapel Hill area, this bustling city is part of a larger metro area that includes Raleigh and Chapel Hill, totaling over two million residents and encompassing the state capital.
Durham specifically holds immense promise for real estate investors. A blend of abundant job opportunities and reasonably priced houses has fueled substantial growth in the Durham real estate market. The market has rebounded impressively from the housing bubble burst, gaining favor as an investment destination just two years after the 2008 market crash.
With a thriving population and a robust economy, the rental demand in Durham, North Carolina continues to surge. The enduring appeal of the Triangle area, attracting both new residents and those from out-of-state, contributes to the market’s strength. Real estate investors are particularly drawn to the Durham and Raleigh regions, appreciating their growing and well-educated population along with a diversified economy that supports sustainable growth.
Current Durham Housing Price Trends 2023
Durham County Housing Price Trends
- Median Sales Price: $420,000 (+6.7% year over year)
- Average Sales Price: $491,854 (+14.8% year over year)
- Median Days On Market: 19 (-32.1% year over year)
- Percent of Original List Price Received: 98.7% (+2.3% year over year)
Durham County Sales & Housing Supply
- Closed Sales: 291 (-20.7% year over year)
- New Listings: 335 (-6.9% year over year)
- Inventory of Homes for Sale: 576 (-26.1% year over year)
- Months Supply of Inventory: 1.8 (-5.3% year over year)
Triangle Region Housing Market Trends
The Durham Regional Association of REALTORS® and the Triangle Multiple Listing Service (TMLS) provide a detailed insight into the state of the housing industry in the greater Triangle region, encompassing 16 counties. The report for October 2023 reveals significant trends and changes in key metrics compared to the previous year.
New Listings Surge
In October 2023, the region experienced a notable increase in new listings, rising by 6.9 percent to reach a total of 3,509. This surge reflects a dynamic real estate market, suggesting increased interest and activity among both buyers and sellers.
Under Contract Sales Soar
Under Contract Sales witnessed a substantial growth of 11.8 percent, totaling 2,828. This surge indicates a strong demand for properties, possibly driven by favorable market conditions, low-interest rates, or other factors influencing buyer behavior.
Inventory Levels Experience Decline
However, the positive momentum is countered by an 11.9 percent decrease in inventory levels, resulting in 6,484 available units. This decline may impact the choices available to potential buyers, potentially contributing to increased competition in the market.
Closed Sales Decline
Despite the growth in new listings and under contract sales, the overall closed sales experienced a decline of 10.5 percent, totaling 2,757. This dip could be attributed to various factors, including potential challenges in the closing process or shifts in buyer behavior.
Median Sales Price and Affordability
The Median Sales Price saw a modest increase of 1.3 percent, reaching $400,000. This increment suggests a steady appreciation in property values. On the other hand, the Year-to-Date Housing Affordability Index stood at 68, marking a 6.8 percent decrease compared to October 2022. This index is a crucial measure of housing affordability, indicating the region’s economic dynamics.
Days on Market and Months’ Supply of Inventory
Interestingly, Days on Market remained stable, showing no significant change at 24 days. This statistic reflects the average time a property stays on the market before being sold. Additionally, Months’ Supply of Inventory remained consistent at 2.2 months, providing sellers with confidence in market stability.
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 2024: Positive Growth and Strong Demand
The Durham-Chapel Hill housing market, as forecasted by Zillow, provides valuable insights into the current state and future projections. The data, accurate through October 31, 2023, reflects key metrics shaping the real estate landscape in the area.
Current Market Snapshot (Data through October 31, 2023)
- Average Home Value: $401,637
- Year-over-Year Increase: 1.1%
- Days to Pending: Approximately 10 days
Market Forecast (October 31, 2023)
Zillow’s 1-year market forecast for Durham-Chapel Hill projects a positive trend with an expected increase of 0.9%. This forecast indicates a steady appreciation in property values, reinforcing the area’s attractiveness for potential buyers and investors.
Key Metrics (October 31, 2023)
- For Sale Inventory: 1,403
- New Listings: 583
- Median Sale to List Ratio (September 30, 2023): 1.000
- Median Sale Price (September 30, 2023): $397,333
- Median List Price (October 31, 2023): $426,650
- Percent of Sales Over List Price (September 30, 2023): 44.0%
- Percent of Sales Under List Price (September 30, 2023): 39.6%
Analysis of Key Metrics
The median sale to list ratio of 1.000 reflects a balanced market where properties are typically sold close to their list prices. The median sale price of $397,333 and median list price of $426,650 indicate a competitive market with strong property values.
Furthermore, the percentage of sales over list price at 44.0% suggests a market where buyers may need to compete by offering prices higher than the listed values. On the flip side, the percentage of sales under list price at 39.6% indicates that negotiating below the asking price is still a viable option for a significant portion of transactions.
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.
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 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.
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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
