RALEIGH – Rental prices in the Triangle continue to skyrocket, even faster than house prices in the scorching residential space, according to a new rental report found this week.
Since the start of the global coronavirus pandemic in March 2020, the median price of renting a one-bedroom apartment in Durham has fallen from $ 950 per month to $ 1,140 per month, or 38.95%, according to Jeff Andrews, analyst at Zumper.
In Raleigh, the median price of a one-bedroom apartment in Raleigh has risen to its current median price of $ 1,240 per month, from $ 1,020 per month in March 2020. That’s an increase of 21.57% since the start of the pandemic, Zumper found.
Prices for both rooms have risen by more than 22% in Durham and 15.6% in Raleigh since March 2020, according to the Zumper dataset, which Andrews shared with WRAL TechWire upon request.
By comparison, the latest data from Triangle Multiple Listing Service (TMLS), which tracks properties listed for sale, showed the median selling price of homes in the region, which includes Durham, Johnston, Orange and Wake counties, rose from $ 287,000 in March. 2020 to $ 351,000 at the end of August 2021, an increase of 22.9%. But median home prices rose 15.2% year over year, comparing August 2020 to August 2021, according to TMLS data.
The increase in the median rental price and the median selling price of homes exceeds the rate of inflation, which federal statistics show is around 5% so far this year.
And rents could increase in the future, as the increase isn’t just seen in a year-over-year comparison or since the start of the pandemic. For one-bedroom apartments, rent is up 4.29% in Raleigh from the previous month, according to the Zumper data set, and rent is up 4.76% month-to-month. the other in Durham for one bedroom apartments.
“The home sales market has been so dynamic that people are either overpriced or exhausted by all the competition,” Andrews said in an interview with WRAL TechWire. “This means that a lot of people who in ‘normal’ times would have bought a house are stuck in renting.”
The result, says Andrews? “It leaves relatively high income people in the rental market, which drives up rents. “
The demand for the rental of Triangle “overpriced” as the end of the moratorium on evictions approaches
What is happening?
The Triangle continues to experience population growth and growth in job creation, putting additional pressure on the region’s housing markets. The Triangle is experiencing a housing shortage, which means prices may continue to rise in the future, said Arlyn Solórzano, licensed real estate agent at Durham-based Movil Realty, in an interview with WRAL TechWire.
“What we are seeing is that most people are misinformed,” Solórzano. “They are hoping that the market will collapse, that it will normalize, that home values will drop.”
“They probably don’t have the right advice,” Solórzano said. “They are afraid or do not feel ready to compete in this real estate market.”
So some potential buyers, especially first-time buyers, see rising house prices, intense competition for existing homes in the market, and decide that their only remaining option is to rent rather than potentially committing all of their financial resources. to win a bid on a property, Solórzano said.
“So they will choose to renew their lease or be forced to stay in an Airbnb, which is only temporary accommodation,” Solórzano said. “They’re waiting for more options, but we don’t have enough inventory.”
Demand for housing remains high. Solórzano attributed this to low inventory in the sales market, and Andrews told WRAL TechWire that the rental market is also unlikely to experience a high vacancy rate.
A recent Zillow survey of real estate experts on the state of the national housing market led economists and analysts at Zillow to predict that the housing market would remain “relatively stable” even as moratoriums on evictions and foreclosures would end. Seizures in North Carolina jumped nearly 20% in August 2021, after the end of the moratorium on foreclosures in late July, which was below the national average.
Still, upcoming foreclosures in the home market are only expected to account for 5.4% of available home inventory, Zillow found.
Instead, experts polled by Zillow predicted that 22.5% of inventory would come from new homes and 39.7% from existing homeowners deciding to sell.
As recently as last month, a comparison of available homes in the “starter home” segment of the market revealed that for those looking for new housing options, renting may make more sense than buying. But while the median home selling price fell in August compared to July, the median rental rate rose, according to Zumper data.
Based on the Triangle property market and the metrics used to track inventory, competition and prices, Solórzano does not anticipate a stock market crash. She also does not expect a drop in the selling prices of houses in the Triangle.
That’s because of the tightening market right now, with so little housing available on the open market, she said.
“We’re not going to see house prices go down, not this year,” Solórzano said. “Because sellers may not have a place to move. “
“The sellers are worried that they will not be able to find another house to buy or rent,” Solórzano said. This leaves potential buyers on the sidelines, Solórzano said. “Some are still interested in buying,” she said. “I try to do our best for them, and sometimes we can’t win an offer.”
Are we in the middle of a real estate bubble? At the event, the developers disagree.
It’s not just the Triangle where rents are going up
North Carolina’s 10 most populous cities saw their rental prices rise, with the state averaging a 19.6% year-over-year rental price increase, according to the most recent data of Apartment List, who revealed that Raleigh’s rise has overtaken the state. average and was 22.1%.
Most expensive city in North Carolina to rent?
That would be Asheville, according to apartment listing data, with a median rent for a two-bedroom apartment of $ 1,730, an increase of 28.3% year-over-year, the most recent increase. fastest in the state.
In Durham, the median price for a two-bedroom apartment is $ 1,415, up 20.1%, and in Raleigh, the median price for a two-bedroom apartment is now $ 1,530, according to data from the list of apartments.
Zumper’s data set showed the median price of a two-bedroom apartment at $ 1,420 in Durham and $ 1,410 in Raleigh.