I've posted some market updates and analysis for Albuquerque/Rio Rancho and Austin. Now it's time to move east to Raleigh, NC.
For our clients, the Raleigh market is a cashflow AND appreciation play. Cash flow is positive approx $100+ per month and the market appreciated 14%+ last year. Probably won't hit that this year but we are very confident it will be in the 10% neighborhood. Check out our current inventory by clicking here NorthPoint's Raleigh area inventory . We have properties from $250K to $375K, some on golf courses. Many of our clients property's are rented by RTP company employees that are here on contract from outside the country. By contract they are not allowed to buy so they make great tenants, usually on mulitple year leases. If anyone is interested let me know and I will run a detailed, conservative cash flow analysis on any of the properties in our inventory.
The areas we currently have inventory is: Raleigh, Cary, Wake Forest, Apex and Garner. Now for the news my comments are bolded AND italicized:
This is link to a quick blurb about how Research Triangle Park has added 86,000 new jobs over the last three years with 100,000 new jobs in five years being the goal. Looks like they are going to exceed the goal.
http://www.nccommerce.com/intranet/e-clips/pdf/16895.pdf
Raleigh Accolades
#3 Best Jobs in the Hottest Cities
Business 2.0, May 2007
#7 Business Boomtown
Inc Magazine, May 2007
#4 Hottest Job Market for Young Adults
Bizjournals, April 2007
#1 Best Place for Business
Inc Magazine, April 2007
#1 Best Place for Business & Career
Forbes.com, April 2007
#1 Best City for Jobs
Forbes.com, February 2007
Top 50 Hottest Cities for Expanding &
Relocating Companies
Expansion Management, February 2007
Top 10 Place in the South for the Creative Class
Southpoint Business & Development, Winter 2007
#1 School District in the Nation for Certified Teachers National Board of Teachers, January 2007
Top 5 City for Young Singles
(Top 25 Cities for Every Stage of Your Life List)
Kiplingers Finance, May 2007
#3 Best Place for African Americans
Black Enterprise, May 2007
Top 10 - Best Place to Find A Mate
Men's Health, April 2007
Top 10 Tech Towns
Wired, January 2007
I had never heard of a "R&D Cluster" before, at first it sounded like an unpleasant medical condition.
Raleigh-Durham named 'R&D Cluster'
Triangle Business Journal - 11:08 AM EDT Monday, July 2, 2007
The latest in a long line of accolades for the Triangle came Monday when Fast Company magazine said it's named the area an "R&D Cluster" on its annual Fast Cities list.
The magazine says the Triangle - or, in its terms, Raleigh-Durham - has the highest percentage of college graduates ages 25 to 34 in the country. It specifically cited local companies Red Hat (NYSE: RHT) and SAS for contributing to the area's success.
The other two cities cited by Fast Company as R&D clusters were Fort Collins, Colo., and Seoul, South Korea.
Raleigh is the # 1 Top Home Sellers' Market according to Forbes.com with two other NorthPoint markets, Austin and Portland, in the top 10. Note the comments for Raleigh, which explains why it fits the NorthPoint model. A seller's market is an appreciating market. I bolded the comments about Raleigh & Austin.
Top Home Sellers' Markets
Matt Woolsey, 06.22.07, 12:01 AM ET
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If you've got property for sale, chances are you're in a bind: Nationwide, prices for existing homes keep on falling and new home constructions started a few years ago continue to roll off the conveyer belt, upping inventory.
On top of that, the fallout from subprime lending, the subsequent tightening of credit and lending standards, and the recent rise in long-term treasury yields has shrunk the pool of eligible buyers. Feel like you can't catch a break? You're not alone.
Not every market follows national trends and despite the industry's overall problems, there are still cities where sellers have the upper hand.
In Pictures: Top Home Sellers' Markets
The best way to judge a buyer's vs. a seller's market is a simple supply vs. demand analysis of housing stock: At the current rate of sales, how long would it take to sell off the inventory whether single family homes or condos? If that measure comes back high, houses sit on the market longer. If it is low, the market is tightening. This is good news for the seller.
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The Methodology
To measure inventory glut, we used Moody's Economy.com and National Association of Realtors data that tracked a market's current sales rate by projecting the amount of time it would take to sell off the excess housing stock at the current rate of sales.
We also looked at the change in sales rate over the last year to measure the relative tightening or loosening of the market. Finally, a measure of price stability was applied so as to prevent the list from being a rundown of upstart markets.
The measurements left out a few cities that lacked comprehensive data. Seattle, for example, has incredibly strong market fundamentals--the lowest vacancy rate of major metros at 0.9% and is a small geographic area not conducive to overproduction. It is a good seller's market, but for tracking what we were after, Seattle data was incomplete for our analysis.
Moody's Economy.com chief economist Mark Zandi points out that the best-performing markets are those that had barriers to over production during the housing boom.
The Top Tier
In the case of San Francisco, which ranked second on our list, it's an issue of geography: There is little space for growth or new development and the local government doesn't do much to incentivize new construction.
Strong in-migration stemming from local economic strength is another good way to keep up demand here. New houses being built isn't a problem if there are new people moving to town.
This scenario is also playing out in Raleigh, N.C., the No. 1 city on our list. Moderate growth and disciplined building over the last five years prevented the market from developing a significant glut. Additionally, a strong local economy has helped contribute to the city's healthy 1.6% vacancy rate.
What's more, the rate of home sales against home inventory was healthy in Raleigh; in this category, it ranked fifth best of big cities, according to Moody's metrics. Even though the market has low vacancy to begin with and displayed strong construction restraint during the housing boom, Raleigh still has the eighth best rate of tightening.Similarly, strong in-migration and local economic pop carried Austin as a seller's market. It finished fourth overall in sales rate to inventory size and has had the fifth-best home price appreciation figures of the large markets Moody's measured. Its mediocre 14th best market tightening ranking can be attributed, in large part, to its small inventory excess. A 1.5% vacancy rate, like Austin's, is where the national average stood during the most recent housing boom. In other words, that low a vacancy rate indicates a housing market at close to full capacity.
That's all for now. Next I'll be covering the Atlanta market from the NorthPoint perspective.
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