SFR PRICEUPSIDE FACTORS: 1 Low mortgage interest rates will continue to drive high demand for homeownership and investing. 2 New listing inventory is at all-time lows, and total active inventory has dropped by nearly 45 per - cent vs. January 2020. Raleigh averages about 3.6 months-of-inventory over the past 10 years. In December, MOI was down to its lowest level in his - tory with only a 1.2 months’ supply given the current sales velocity. 3 Builders in the Raleigh market are struggling to keep up with demand, yet ranking 12th in the country for total SFR permits and 17th in total building permits in the last 12 months.
4 Continued influx of new residents from business relo - cations and job availability 5 Foreclosures are down 80 percent vs early 2020 thanks to moratoriums & forbearance extensions, which have put the distressed property market on pause. 6 “Distressed” sellers exiting forbearance programs have many foreclosure avoidance options. They may be able to sell at market-rate prices, instead of the negative appreciation spiral due to foreclosures seen back in 2008. 7 President Biden has proposed a $15,000 first-time homebuyer tax credit for down payment assis - tance. Should this measure pass, this could introduce a new wave of demand pressure and drive prices higher.
Current Rent Price
Rent vs Income
Gross Yield
Current Home Price
© 2021 Mapbox © OpenStreetMap
© 2021 Mapbox © OpenStreetMap
© Mapbox © OSM
© Mapbox © OSM
3Bd SFR Rental Price
Rent vs Income
Avg Yield
SFR Home Price
$1,200
$1,750
20.0%
35.0%
7.0%
12.0%
$150,000
$400,000
RENTAL RATES As of January 2021, the median three-bedroom, SFR home in the Raleigh MSA is $1,585 a month, an increase of seven percent from last year. Real estate investors in the Raleigh market have had moderate SFR rent price appreciation over the last five years, with an average increase of 4.2 percent per year and 22 percent gain overall. In the last 5 years, rent appre - ciation has been in lockstep with in median household income appreciation, indicating the market is not over - heating and has room to run. Affordability for tenants remains quite healthy com - pared to other metros. Given the high relative incomes,
market-level rent-to-income ratio for 3bd SFR homes is only 23.7 percent, which is significantly below the national average of 31.2 percent for metro MSAs. Gross rental yields for single-family properties are a moderate 7.9 percent for the metro, as home prices have been accelerating faster than rents. The northwest side of Raleigh, Cary, and Holly Springs are nearest to the Research Triangle, and these areas have the highest household incomes, home val - ues, and rent prices. To the Southeast, investors can find higher yields, lower priced properties and moder - ate rent prices.
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