RESEARCH TRIANGLE PARK – If Amazon picks the Triangle for HQ2, the influx of workers would drive up housing and rental prices due to the fact there already are very low vacancy rates, says a top executive with real estate analysis firm ATTOM Data Solutions.
Add in a possible Apple campus – which is expected to be announced at any time – and housing will get even more pricey, adds ATTOM Senior Vice President Daren Blomquist.
“Given the low vacant property rate, an influx of thousands of new workers would put upward pressure on both rents and home prices in the market,” Blomquist tells WRAL TechWire.
The Triangle housing market already is hot with the average selling price of a home surging more than 5 percent year-over-year to $302,566 across the 16 counties included in the Triangle Multiple Listing Service.
Meanwhile, the inventory of listed home for sale fell more than 12 percent year-over-year to 7,609.
And home sellers were getting their original listing price in 98.8 percent of deals.
Rental prices are already climbing in Raleigh, too.
According to ATTOM, the average price of a three-bedroom property rose to $1.416 in April of this year. That’s up 3 percent from 2017.
The ATTOM analysis follows two other reports that came to differing conclusions about HQ2 impact.
Residential rents would increase by hundreds of dollars a year, according to a study by real estate research firm Zillow.
But Fitch Ratings forecast that Raleigh would see little impact on housing and rental prices or salaries if Amazon picked North Carolina’s capital.
‘A healthy housing market’
ATTOM reported last week that Raleigh ranked No. 1 for housing and quality of life in a study analyzing the metropolitan areas that have been declared by Amazon as finalists for the $5 billion project and a promised 50,000 jobs.
Raleigh scored well across a wide number of categories that ATTOM analyzed, which Blomquists indicates how strong the housing market is.
“While Raleigh doesn’t rank No. 1 or even No. 2 for any of the seven factors we looked at, it performs well across all seven factors, an indication that is a healthy housing market that has a lot of strengths and really no weaknesses,” he says.
“It comes with the relatively low home prices but without the lower school scores and higher crime rates in markets such as Indianapolis, Columbus, and Philadelphia,” he adds.
And growth has not been out of control, the exec pointing out:”Home prices have been rising steadily there over the past five years but not so quickly that affordability has become a problem in fast-appreciating markets such as Dallas, Austin, Los Angeles and Denver.”
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In a followup to the report, Blomquist points out the survey didn’t account for vacancies. And Raleigh as well as the Triangle doesn’t have a glut by any measure.
“One data point not in the rankings was overall vacant home rate in the market, which provides some indication of how much ‘slack’ there is in the market available for folks coming in,” Blomquist notes.
“We show there are just 2,329 vacant residential properties in the Raleigh metro area, 0.61 percent of the total residential housing stock, and just 2,026 vacant residential properties in the Durham-Chapel Hill metro area, 1.41 percent of the total residential housing stock.
“Both are below the national vacant home rate of 1.58 percent, and this indicates the need for more housing if the region was to see an influx of several thousand jobs.”
“The vacant property rate of 0.61 percent in the Raleigh metro area is sixth lowest among the 19 cities on the list,” he points out “with Denver (0.58 percent), Boston,(0.54 percent), Montgomery County, Maryland (0.48 percent), Austin (0.42 percent), Northern Virginia (0.19 percent) having lower vacant property rates.”
“A good problem to have”
When he is told that Apple also is considering the Triangle for a project that would include several thousand workers, Blomquist says he sees challenges – and opportunities.
“Certainly if both [Amazon and Apple] came to the market it could be a problem in terms of available housing,” he says, “but it would be a good problem to have.”
Blomquist points out that other Amazon finalists with more housing also have other problems that Raleigh doesn’t.
“The tension that companies like Amazon and Apple face is that housing markets with high vacant property rates — and therefore more availability of housing stock — such as Indianapolis, Pittsburgh, Chicago, Pittsburgh, and even Miami tend to have other factors that might be considered a negative for incoming workers,” he explains.
“Factors such as lower school scores and higher crime rates, particularly in the areas with many vacant properties.”
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