In this article, we will delve into some crucial North Carolina housing market predictions for 2023 and 2024, touching on some of these trends:
- A deceleration in home sales due to rising mortgage rates, leading to sellers being more receptive to concessions
- Persistently low inventory levels and soaring demand, ensuring North Carolina remains one of the hottest real estate markets in the country despite declining prices
- Moderate price appreciation in prominent areas such as Raleigh and Charlotte
This article is for homeowners considering selling, potential buyers contemplating the right moment to enter the market, real estate investors exploring profitable opportunities, and real estate professionals who want to stay updated on market trends. We’ll provide insights into the future landscape of the North Carolina real estate market for 2023 and 2024. We’ll also highlight some of the best places to invest in North Carolina right now. Let’s get started!
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North Carolina Housing Market Predictions, Trends & Factors Influencing Growth
Population growth and migration patterns
North Carolina has witnessed significant population growth and migration patterns in recent years. This has contributed to the state’s current population of over 10.6 million, making it the ninth most populous state in the United States.
Between July 1, 2021, and July 1, 2022, the population grew by 133,000 people (a percentage gain of 1.3%), outpacing the estimated average annual change of 102,000 (1.0%) between 2010 and 2020. In the last year, North Carolina added more people than all other states except Texas and Florida.
Image Source: NC OSBM
This population growth can be attributed to a combination of natural increase (births minus deaths) and net migration (people moving in minus people moving out). North Carolina has attracted both domestic and international migrants, with people relocating to the state for job opportunities, affordable housing, and a high quality of life.
From 2010 to 2020, North Carolina gained approximately 904,000 residents due to domestic migration, with the majority coming from nearby states such as Virginia, South Carolina, and Georgia, as well as more distant states like New York and Florida.
The influx of new residents has had a significant impact on the housing market. It has led to increased demand for housing and driven up home prices and rents. Over the past 5 years, North Carolina housing prices have surged by over 70%, according to Zillow. Rents have also experienced substantial growth.
Employment and economic indicators
North Carolina has experienced robust job growth and positive economic indicators in recent years, contributing to the state’s thriving housing market. In 2022, a total of 28,690 new jobs were added, surpassing the previous year’s record by more than 4,000. This workforce expansion generated a staggering $19.3 billion of capital investment, breaking 2021’s record of $10 billion, according to the NC Department of Commerce.
In March 2023, the state had 372,000 job openings, an increase from 366,000 openings in February, as reported by the U.S. Bureau of Labor Statistics. Furthermore, North Carolina’s seasonally adjusted unemployment rate in April 2023 was 3.4 percent, a decrease of 0.1 percentage point from the revised rate in March. From April 2022 to April 2023, total nonfarm jobs increased by 117,100, with private sector jobs growing by 110,600 and government jobs increasing by 6,500. The top industries experiencing growth were Leisure & Hospitality Services and Education & Health Services.
The North Carolina Department of Commerce also projects that the state will add 445,000 new jobs between 2021 and 2030. Health Care & Social Assistance is expected to add the most jobs (76,000) and have the fifth-highest percentage growth (12.7%).
These positive employment and economic trends have had a significant impact on the housing market in North Carolina. The influx of new jobs and a growing economy have attracted more people to the state, increasing the demand for housing and driving up home prices and rents. As more individuals and families relocate to North Carolina for job opportunities and a high quality of life, the housing market is expected to continue thriving.
Real estate development and construction trends
In North Carolina, the real estate development and construction landscape has been marked by a combination of challenges and opportunities in recent times. Residential homebuilding declined in 2022, as the average interest rate on 30-year mortgages more than doubled. Despite this setback, the demand for construction workers remained high during this period, reflecting the ongoing growth potential in the industry.
To navigate the rising interest rates that may deter potential buyers, builders are adopting creative strategies to move inventory, such as offering attractive deals and incentives.
Even in the face of these headwinds, North Carolina’s real estate market has shown resilience and strength. In April 2023, the median sale price rose by 2.5% year-on-year, while the number of homes sold decreased by 23.2%. With mortgage rates stabilizing, new buyers are gradually entering the market, and there could be more competition for the limited number of available homes.
Government policies and regulations affecting real estate
Housing affordability remains a top priority for state officials. Several measures are being considered to tackle the restrictive zoning practices that have contributed to stagnant or below-potential residential home growth in many areas.
A study by the Cato Institute in December 2022 highlighted the disparity between North Carolina’s population growth and the rate of new housing construction. The study emphasized the need to address restrictive local zoning, particularly in Greensboro and the surrounding Triad region, which has been impeding housing supply growth.
To counteract these challenges, new bills have been proposed in the state General Assembly. One such example is legislation aimed at “deannexing” some properties in Summerfield, a town located just outside Greensboro. This move would remove a property from local zoning jurisdiction, as local officials have repeatedly rejected proposed development in the area.
State legislators view this issue as a matter of statewide interest, as Summerfield is situated in a region where the housing supply urgently needs to be increased to accommodate the influx of newcomers brought by multiple massive economic development projects.
These new government policies and regulations are expected to have a significant impact on the North Carolina housing market. By addressing restrictive zoning practices and promoting housing supply growth, the state aims to improve housing affordability and cater to the increasing demand for affordable housing units.
Charlotte, North Carolina Housing Market Predictions
The Charlotte real estate market is one of the hottest right now. In April 2023, Charlotte home prices were up 0.8% compared to last year, selling for a median price of $399K with a Redfin Compete score of 62.
In January, Zillow published an analysis that predicted that Charlotte would have the “hottest housing market in 2023” due to strong projected home value growth and demographic trends. Below we explore a few Charlotte housing market predictions and the overall forecast of the metro area. Let’s see what the future holds for the Charlotte housing market.
Overview of the Charlotte metro area
The Charlotte metropolitan area, often called Metrolina, spans across the U.S. states of North and South Carolina and centers around the city of Charlotte. This dynamic region encompasses cities such as Gastonia, Concord, Huntersville, and Rock Hill, as well as a vast suburban expanse across the counties surrounding Mecklenburg County, which lies at the heart of the metro area.
In 2021, the population of the Charlotte-Concord-Gastonia metropolitan area reached approximately 2.7 million people, reflecting a modest increase from the previous year when the population stood at around 2.67 million people.
The Charlotte metro area serves as a crucial financial center, transportation nexus, and entertainment hotspot. As the second-largest financial hub in the United States, behind only New York City, Charlotte hosts the headquarters of Bank of America and Truist Financial. It also hosts the East Coast headquarters and most extensive employment center of Wells Fargo. Additionally, the metro area is home to several other Fortune 500 companies, such as Brighthouse Financial, Duke Energy, Honeywell, Lowe’s, and Nucor.
Over the past decade, Charlotte’s population has grown by 19.6%, with a 0.6% increase year-over-year, as reported by the U.S. Census Bureau. Despite a nationwide cooling trend in residential real estate, Charlotte remains one of the nation’s most vibrant housing markets.
In Bankrate’s 2023 Housing Heat Index, Charlotte secured the number five spot based on criteria such as one-year price appreciation, one-year job growth, population growth, active residential listings per 1,000 people, listings’ median days on the market, and the unemployment rate. This ranking underscores the city’s enduring appeal and the continued expansion of its housing market in recent years.
Charlotte, North Carolina housing market predictions for 2023, 2024 & beyond
Below are several North Carolina housing market predictions for the largest metro area in the state, Charlotte.
Property price housing market predictions
Median home prices will remain strong as single and multifamily construction declines
Currently, the Charlotte housing market is experiencing a slowdown in both single-family and multifamily home construction. In February 2023, single-family detached home permits dropped by approximately 28% year over year, with 1,421 permits issued compared to 1,968 in February 2022, according to the U.S. Census Bureau. Similarly, multifamily building permits decreased 18.5%, with 772 permits issued in February 2023 compared to 949 in February 2022.
This decline in home construction can be attributed to factors such as rising suburban land prices in Charlotte and regional banking turmoil resulting from the interest rate hikes that began in 2022. However, despite the slowdown in construction, housing supply increased to 2.6 months’ worth of inventory in February 2023. This is up from a little over a month’s supply the previous year.
As a result, the Charlotte metro area has continued to see growth in home prices, with a year-over-year increase of 4.6% in March 2023, according to the S&P CoreLogic Case-Shiller Home Price Index.
Ongoing population growth, coupled with a limited supply of new housing, will likely continue to drive up home prices in the coming years.
Demand for homes in Charlotte will remain high despite the hike in interest rates
The Charlotte housing market has experienced strong demand despite the Federal Reserve’s interest rate hikes throughout 2022. These rate increases, implemented to curb inflation, have discouraged potential homebuyers in Charlotte and other regions from applying for mortgage loans. Nevertheless, the city’s real estate market continues to thrive, driven by factors such as population growth, job creation, and a high quality of life.
As Matt Stone, a real estate agent in Charlotte, mentioned in a recent US News article, “multiple offers are still being made on homes in the $300,000 to $600,000 price range”. However, he also noted a slowdown in the $1 million+ homes segment. This suggests that while the higher-end market may be cooling, demand remains strong at more affordable price points.
According to a January 2023 analysis by Zillow, Charlotte is predicted to be the hottest housing market in 2023, rising from the fifth position in 2022. The Queen City ranks second among large markets in projections for both home value growth and growth in owner-occupied households. Additionally, rents are expected to increase as more people relocate to the Charlotte area.
Image Source: Zillow
The Charlotte housing market could become balanced in 2024 when inventory improves
Charlotte, NC is currently a seller’s market, as reported by Realtor.com. This means that there are more people looking to buy than there are homes available. The housing supply in the area has increased to 2.6 months’ worth of inventory in February 2023, up from a little over a month’s supply a year prior. On average, homes in Charlotte, NC sell after 28 days on the market, with the median days on market increasing slightly compared to last year.
In April 2023, home sales declined 25.6% year-over-year (YOY), according to Redfin. However, it is expected that more homes will come onto the market in 2024, giving buyers more options.
As more homes become available and buyers have more choices, market dynamics may shift towards a more even distribution of power between buyers and sellers.
Rental rate housing market predictions
Median rent will continue to increase year over year
Currently, the average rent for a 1-bedroom apartment in Charlotte, NC stands at $1,568, representing a 6% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Charlotte has risen by 3% to $1,599, while the average rent for a 1-bedroom apartment decreased by 1% to $1,568. The average rent for a 2-bedroom apartment remained stable.
Rent.com highlights that 29 metro cities, including Charlotte, have experienced yearly rent increases above the national median. Notably, four of these metropolitan areas have seen rent hikes greater than 10 percent. Charlotte was one of them.
Taking these current North Carolina housing market predictions and trends into consideration, it can be predicted that as Charlotte’s population continues to grow and home prices remain high, rents in the city will likely follow an upward trajectory.
High rental demand will keep rental vacancies low
In December 2022, the rental vacancy rate in Charlotte, as reported by the Census Bureau was 3.4%. This represents a significant decrease of 5.2% year over year. In contrast, the national rental vacancy rate for the same month was 5.8%, a slight increase of 0.1% from the previous year.
One of the key factors driving Charlotte’s real estate growth is the city’s robust job market, which is supported by a diversifying and expanding local economy. The city attracts a large number of young professionals and startups. Thus, rental demand in Charlotte is expected to remain high, keeping rental vacancies low for the foreseeable future.
Charlotte neighborhoods to consider investing in
1 – Gastonia
Gastonia, a thriving suburb located just west of Charlotte, NC, offers a unique blend of small-town charm and big-city amenities. Known for its affordable housing, diverse neighborhoods, and strong sense of community, Gastonia has become an attractive option for investors and homebuyers alike in 2023.
The city boasts a rich history, with numerous historic sites and landmarks, as well as a vibrant downtown area filled with local shops, restaurants, and entertainment venues. Additionally, Gastonia’s location provides easy access to Charlotte’s bustling city center. This makes it an ideal choice for professionals and families seeking a more relaxed lifestyle without sacrificing the conveniences of urban living.
With its growing population, strong local economy, and ongoing development projects, Gastonia presents a promising investment opportunity in the Charlotte, NC area.
2 – Concord
Known for its diverse neighborhoods, excellent schools, and thriving economy, Concord offers a high quality of life for residents and investors alike.
The city is home to the renowned Concord Mills shopping center, the Charlotte Motor Speedway, and numerous recreational facilities, making it a popular destination for both locals and tourists. Concord’s strong economic base is driven by a mix of industries, including retail, healthcare, manufacturing, and motorsports, providing ample employment opportunities for residents.
With its convenient location along the I-85 corridor, Concord offers easy access to Charlotte’s city center and other surrounding areas, making it an attractive choice for professionals and families seeking a balance between urban amenities and suburban living.
Concord’s population growth and economic development make it a prime location for Charlotte residential property investment in 2023 and 2024.
3 – Kannapolis
Kannapolis has experienced significant growth and development in recent years, with projects such as the $500 million investment by Insite Properties and Partners, situated around the North Carolina Research Campus. The city is attracting private developers, boosting the local economy and creating new opportunities for residents.
With its mix of residential, commercial, and research spaces, Kannapolis offers a diverse range of investment options. Kannapolis’ revitalization and growth make it an attractive investment destination in the Charlotte, NC area.
4 - RealWealth Neighborhoods
In the neighborhoods where RealWealth members invest, single family home prices start at approximately $300,000. To learn more about these areas, sign up for your free membership. You’ll be able to view available and sample investment properties. You can also watch a replay of our recent Charlotte webinar to hear a conversation with the Charlotte property team and see their featured new construction properties with buyer incentives that translate into monthly cash flow.
Conclusion
This article has provided you with some insights on pertinent North Carolina housing market predictions and trends for 2023 and 2024. We’ve discussed the slowing pace of construction in Charlotte, which could lead to increased home prices and limited housing options in the short term. We also highlighted promising investment locations, such as Gastonia, Concord, Kannapolis, as well as alluding to the promising neighborhoods where RealWealth members are investing today. Many of the cities in the Charlotte metro area are experiencing growth and development, making them attractive options for investors considering the North Carolina real estate market.
As you continue to explore the housing market and investment opportunities, it’s essential to stay informed about regional trends and consider external factors that could impact the market’s trajectory. To further enhance your understanding of the housing market and make well-informed decisions, we recommend reading our five year forecast of the US housing market.