Raleigh MSA Rent Price Forecast through 2021: +4 per- cent to +6 percent
QUICK FACTS
POPULATION
RENTAL PRICE UPSIDE POTENTIAL:
The 2019 Census shows the Raleigh-Cary NC Metropolitan Statistical Area (Raleigh MSA) with 1.39 million residents. Last year, Uhaul named the city the Top Growth City in America based on migration data. Raleigh has been growing by an average of 30,000 residents per year, with a five-year population increase of over 12 percent.
SFR rental inventory is also at near lows from the eviction moratorium and increased lease renewal activity. High occupancy, low turnover providing limited choices for people to price-shop SFR options. Inward population migration from relocations, families are likely to rent an SFR before buying. Those exiting forbearance will need a place to rent, increasing demand.
JOB MARKET
The Raleigh MSA economy is the 44th largest in the U.S. by GDP, growing over six percent in the last five years. The metro has a large cohort of jobs in healthcare and scientific, professional, and technical services industries. Prior to COVID-19, the Raleigh job market has been booming, adding an average of 15,000 new jobs per year. As of December 2020, the Raleigh metro has recovered nearly 70 percent of the jobs lost compared to the lows in April. Compared to the pre-pandemic peak in February 2020, the job market is still down 30,000 jobs, primarily lagging in the Education & Healthcare and Leisure & Hospitality sectors. Meanwhile, some higher paying job sectors such as Professional and Business Services (+2.6 percent), Construction and Transport/Warehousing (+10.2 percent), and Financial Services (even) have recovered completely, or even increased.
RENTAL PRICE DOWNSIDE RISKS:
THE BOTTOMLINE By the numbers, real estate investors looking for excel - lent market fundamentals with lots of upside potential should seriously consider the Raleigh market. The eco - nomic and population growth momentum resembles an early-stage version of the Austin market, and local real estate market will benefit from these trends. Compared to other hot markets, the Raleigh metro is still relatively affordable for renters and buyers alike. These are good signals of a healthy market and the area provides many opportunities for successful long-term investments. • It is cheaper to buy than rent with 20 percent down (using median purchase and rent prices), and about the same monthly price with 15 percent down. The higher wage earners in the rental market are looking to purchase a home. Lower-wage industries (renter cohort) have much higher unemployment vs the headline number. This group will need more affordable options and may weigh down multifamily price appreciation Eviction moratorium is now set to end in June. When the eviction dam breaks, this may lead to high vacancy rates and reduce the “qualified” renter pool.
INCOME
The 2019 median household income of $80,100 is well above the national median income of $68,700, and 28th highest median income among all metro MSAs. One-year median household income is up 6.5 percent between 2018 and 2019, and up over 28.5 percent for the last five years. Information and statistics from the Bureau of Labor Statistics employment data, Department of Labor report, Census/ACS Tables and RentRange® data sources.
Fred Heigold III is the senior data analyst at Altisource® / RentRange®, an industry leader inmarket data and analytics for the single-family rental housing industr
76 | think realty magazine :: april 2021
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