A new survey ranks Raleigh-Durham No. 1 and Charlotte No. 11 for expected growth in housing construction next year among the nation's 80 largest markets. Experts say it's being driven by continued migration to the state.
The findings come from the 2021 "Emerging Trends in Real Estate" report from the Uhttps://americas.uli.org/research/centers-initiatives/center-for-capital-markets/emerging-trends-in-real-estate/americas/rban Land Institute and consulting firm PWC. It's based on a survey of developers, investors and other real estate professionals and other data.
One map in the report shows migration patterns based on usage of U-Haul trailers by homebuyers. Charlotte and Raleigh are big destinations, whereas people are leaving bigger metro areas such as Philadelphia, New York, Boston and Chicago.
"You see some major population dynamics occurring, and shifts from, broadly, the Northeast and the West, into the Sunbelt," said Todd Mansfield, the former global chairman of Urban Land Institute and CEO of Charlotte-based Crescent Communities. "Historically, it's been driven by the cost of living."
Home prices, relatively speaking, are lower in North Carolina than in big Northern and Western cities. Mansfield said he thinks prices and telecommuting amid the coronavirus pandemic will spur continued migration.
"Remote working has probably given some new flexibility to people to say, 'You know what? I don't want to take the train into my office in New York City. I'll live somewhere else, and I can work remotely," Mansfield said.
But Mansfield acknowledges there's a downside to an influx of new residents: rising housing prices. He said he sees the market responding quickly to overall demand, but at the expense of lower-priced housing.
"Housing that is currently affordable ... gets redeveloped and upgraded either in new construction or dramatic upgrades that erode the affordability," he said.
Charlotte already faces a big shortage of low-income and workforce housing, and gentrification is shrinking the pool of houses available for people who make below-average wages.
Mansfield said the city's Housing Trust Fund bonds and an affordable housing fund raised by the private sector help, to a point.
"It's like a problem that's almost impossible to solve because the need is so great," he said.
Charlotte also is listed as one of a handful of new "boomtowns," attracting a larger share of educated young workers. In these cities, including Denver; Nashville, Tennessee; Dallas and Portland, Oregon, markets are recovering more quickly from massive job losses because of the pandemic.
Charlotte also has another honor: a photo of the city's skyline is the cover of this year's Urban Land Institute report.
Correction: This story has been updated to correct the first name of Todd Mansfield.
