Are Land Values Increasing In The Triangle?

‍The Raleigh/Durham area of North Carolina has been experiencing significant growth in recent years, leading to rising home values.

According to data from Zillow, the median home value in the Raleigh-Durham-Chapel Hill area is currently $355,000, an increase of 18.4% over the past year.

This trend is likely due to a variety of factors, including the area's strong job market, high quality of life, and desirable climate.

In addition, many people are relocating from other parts of the country, particularly California and New York, which is driving up demand for housing.

According to data from Redfin, Raleigh is one of the top destinations for people looking to relocate from these areas. This influx of out-of-state buyers is contributing to the rise in home values in the area.

I was featured in an article about the increased home values in Realtor.com. You can check it out here.

Despite the high home prices, however, the Raleigh/Durham area remains an attractive place to live, with a thriving economy, top-rated universities, and a vibrant culture.

‍If you are a land developer looking to invest in North Carolina, then the Research Triangle Park of the state may have what you are looking for.

The Triangle's Real Estate Renaissance

Let's kick things off with a bird's-eye view of what's been happening in our neck of the woods.

The Triangle has been on a roll, folks. We're talking about a region that's been punching above its weight class for years now, and the real estate market has been riding that wave like a pro surfer.

Tech Boom and Population Surge

The secret sauce behind our growth? It's a perfect storm of tech industry expansion and a steady stream of newcomers.

‍Big tech players like IBM, Cisco, and Red Hat have set up shop here, bringing with them a flood of high-paying jobs. And where the jobs go, the people follow.

We've seen young professionals and families flocking to the Triangle faster than you can say "Research Triangle Park."

This influx has lit a fire under our housing market, pushing demand through the roof and sending land values skyward.

From Bust to Boom: A Decade of Growth

Now, let's rewind the clock a bit. Before 2010, we were chugging along nicely, but then the 2008 financial crisis hit us like a ton of bricks.

It was a tough time, no doubt about it. But here's the kicker: since 2010, we haven't just recovered – we've taken off like a rocket.

In some parts of the Triangle, land values have doubled or even tripled over the past decade.

That's not just growth; that's the kind of appreciation that makes investors weak at the knees.

Universities in the Raleigh-Durham Triangle

The Raleigh-Durham area is home to several prestigious universities, making it a hub for higher education.

One of the most well-known institutions is Duke University, which consistently ranks as one of the top universities in the country.

Located in Durham, Duke is a private research university with a strong emphasis on undergraduate education.

Another notable university in the area is the University of North Carolina at Chapel Hill, a public research institution that is part of the renowned UNC System.

UNC Chapel Hill is known for its top-ranked programs in fields such as business, law, and medicine.

North Carolina State University, located in Raleigh, is another public research university with a strong reputation for engineering and agriculture programs.

The area is also home to several smaller private colleges, such as Meredith College and William Peace University, which offer a more intimate and personalized educational experience.

With so many options for higher education, the Raleigh-Durham area is an ideal location for students looking to pursue a wide range of academic interests.

Residential Land Values: Where the Action Is

Alright, let's dive into the meat and potatoes of our market: residential land values. This is where the rubber meets the road for most folks looking to buy or sell in the Triangle.

Plenty of Land in NC

The Triangle Area region is widely spread-out, consisting of both urban and rural areas. Regions that were once dilapidated farming areas are now becoming significant contributors to The Triangle housing market.

Places rich with natural beauty and historical significance are now heavily neglected in real estate. This creates an exciting opportunity for both buyers and sellers.

Developers are rushing in to build in areas like Clayton, Garner, Knightdale, Creedmoor, Wendell, Louisburg, Pittsboro, New Hill, among others.

These areas are perfect for developers looking to meet the demand for homes in the $130k-$300k range.

Urban vs. Suburban: A Tale of Two Markets

In our urban cores – we're talking downtown Raleigh and Durham – land values have been on a tear. We're seeing year-over-year growth of 15-20% in some areas. That's the kind of appreciation that turns heads and drops jaws.

Now, our suburban areas aren't exactly slouches either. They're seeing more modest increases, but still impressive at 5-10% annually. Not too shabby, if you ask me.

School Districts: The Golden Ticket

Here's a pro tip from yours truly: keep your eye on those school districts. Areas with top-rated schools, like Chapel Hill-Carrboro and parts of Wake County, are seeing land values increase 20-30% faster than areas with lower-rated schools.

It's like having a golden ticket in the real estate world. Families are willing to pay a premium for access to good schools, and that demand is driving up land values in these areas like nobody's business.

Multi-Family Madness

Now, let's talk about the multi-family sector. If you thought single-family homes were hot, wait till you hear about this. Land suitable for apartment development in downtown Raleigh and Durham has seen price increases of 50-100% in the last five years alone.

And it's not just apartments. The demand for townhomes and condos has sent land values for these types of projects through the roof, with increases of 30-40% in prime locations.

Commercial Land: The Business End of Things

Alright, let's switch gears and talk about the commercial side of things. While it might not be as flashy as the residential market, it's a crucial piece of the puzzle when it comes to understanding land values in the Triangle.

Office Space: Not Just for Dunder Mifflin

Despite all the chatter about remote work, office space is still a big deal in the Triangle. Downtown areas in Raleigh and Durham have seen land values for office development jump by 40-60% over the past five years.

Suburban office parks are no slouches either, with growth of 20-30%. Not too shabby for areas that some folks thought might become ghost towns in the age of Zoom meetings.

Retail and Mixed-Use: Adapting to Change

Now, traditional retail spaces have had a bit of a rough go. With everyone and their grandmother shopping online these days, land values for shopping centers have only increased by about 10-15% in the past five years.

But here's where it gets interesting: mixed-use developments are the new darlings of the commercial real estate world. Land suitable for these live-work-play environments has seen price hikes of 30-50% in prime locations. It's like the real estate equivalent of a Swiss Army knife – versatile and in high demand.

Raleigh-Durham Traffic & Commutes

While the new development is promising for the area, there are some concerns people who are thinking about making the move may have. Traffic congestion will always be an inconvenience in high thriving areas.

According to a 2017 article, How Traffic in Raleigh, Durham Compares to NC, Global Cities by The Triangle Business Journal, commuters in Raleigh and Durham spent 6 percent and 4 percent of their driving time stuck in traffic last year.

Raleigh ranked 432nd out of 1,064 cities worldwide when it came to congestion. Durham ranked 778th.

Triangle cities still rank much better than their neighbors like Austin and Atlanta.

Increasing population and urbanization usually leads to longer commute times. However, there are systems in place to better the situation.

What's Driving These Increases?

So, what's behind all this growth? Well, it's not just one thing – it's a perfect storm of factors that have come together to create a booming market.

Infrastructure: Building the Future

Major infrastructure projects have been game-changers for land values in the Triangle. The expansion of I-40 and the development of light rail systems have sent land values in affected areas skyrocketing by 50-100% in some cases.

And it's not just roads and rails. Investments in high-speed internet and improved utilities have made previously overlooked areas suddenly attractive, leading to land value increases of 20-30% in some regions.

Zoning Changes: The Rules of the Game

Here's where things get really interesting. Changes in zoning laws allowing for higher density development have been like rocket fuel for land values in certain areas. We're talking about prices doubling or even tripling overnight in some cases.

On the flip side, efforts to preserve green spaces have limited the supply of developable land. It's basic supply and demand, folks. Less land available for development means higher prices for what's left, driving up values in areas zoned for development by 30-50% in some cases.

Expanding The Reach of Public Transportation in The Triangle

Public transit in The Triangle is improving, but there is still progress to be made for it to be considered a reliable option. The good news is that construction is underway to add a long-awaited loop to Interstate 540.

The new 18-mile segment of the Triangle Expressway, also known as N.C. 540, will run between this 650-acre interchange and N.C. 55 in Apex, extending the toll road that begins at I-40 near Research Triangle Park.

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Completing the Triangle Expressway's southern leg will leave a 10.8-mile stretch in the southeast corner to build. Contracting is still open for completing the final designs and construction of that final leg of the Triangle Expressway.

Many of the area’s key backroads have begun the necessary improvements to handle the influx of traffic that is expected, as growth rates continually increase.

Crystal Ball Time: What's Next for the Triangle?

Alright, let's put on our fortune-telling hats and take a peek into the future of land values in the Triangle.

Short-Term Outlook: Steady as She Goes

In the next 1-3 years, we're looking at continued growth, but maybe not quite at the breakneck pace we've seen recently. Rising interest rates might tap the brakes a bit, but our strong local economy should keep things moving forward.

We're projecting land value growth of 5-10% annually in the near term. Not too shabby, especially when you consider the national picture.

Long-Term Forecast: Sustainable Growth

Looking further out, say 5-10 years, we're expecting things to settle into a more sustainable pattern. We're talking about growth rates of 3-5% annually across the Triangle.

Now, I know what you're thinking – that doesn't sound as exciting as the double-digit growth we've been seeing. But let me tell you, steady, sustainable growth is what we want to see in the long run. It's like the difference between a sprinter and a marathon runner – we're in this for the long haul.

An Opportunity for Property Investment

The ROI for the area is impressive. The average rent for North Carolina residents is about $1300 a month. That rate includes small starter homes and mid-sized apartments.

You could get far more than that for a rented four-bedroom single-family home.

You could comfortably charge 1% rent on a single-family home and capitalize on the appreciation if you ever decide to sell.

The Tim Clarke Take: Navigating the Market

Now, let me put on my real estate agent hat and give you my two cents on how to navigate this market, whether you're buying or selling.

For Buyers: Think Long-Term

If you're looking to buy in the Triangle, my advice is to focus on long-term value rather than trying to make a quick buck. Look for areas with strong fundamentals: good schools, improving infrastructure, and diverse employment opportunities.

Don't be afraid to consider up-and-coming neighborhoods. These areas often have more room for appreciation, and you might just find yourself in the next hot spot before everyone else catches on.

For Sellers: Price It Right

If you're on the selling end, it's important to be realistic about pricing. Yes, values have increased significantly, but overpricing can be a real pitfall. It can lead to your property sitting on the market for too long, which often results in a lower final sale price.

Work with a knowledgeable agent (ahem, like yours truly) who can provide a comprehensive market analysis. This will ensure your property is priced competitively and attracts serious buyers.

For Everyone: Stay Informed

Whether you're buying or selling, staying informed about local zoning changes and development plans is crucial. These factors can have a massive impact on land values and should be a key consideration in any real estate decision in the Triangle.

The Bottom Line

So, to answer the burning question: Yes, land values are indeed increasing in the Triangle. But it's not just a simple upward trend – it's a complex landscape shaped by a variety of factors, from tech industry growth to zoning changes.

As a real estate professional who's been in the game for 17 years, I can tell you that the Triangle market is one of the most dynamic and exciting in the country. We're seeing growth that outpaces many larger metros, but with a quality of life that's hard to beat.

But remember, real estate is inherently local. While overall trends are positive, each neighborhood and property type can have its own micro-market dynamics. That's why it's crucial to work with experienced professionals who know the ins and outs of the local market.

Talk to someone with the Tim M. Clarke Team now, and you won't regret it later.

Your Next Move

If you're thinking about buying or selling in the Triangle, now's the time to start planning your move. Whether you're looking for a custom-built dream home, an investment property, or just want to chat about the market, the Tim M. Clarke Team is here to help.

We've got the experience, the local knowledge, and the passion to help you navigate this exciting market. So why wait? Give us a call, shoot us an email, or swing by our office. Let's grab a coffee and talk about how we can turn your real estate dreams into reality in the booming Triangle market.

Remember, in a market this hot, timing is everything. Don't let this opportunity pass you by. Reach out today, and let's make your real estate goals a reality in the thriving Triangle market. Your future in one of North Carolina's most dynamic regions is waiting – let's seize it together!

—Tim M. Clarke, Triangle Area Real Estate Specialist

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