Affordability and Housing Growth in the Triangle Real Estate NewsBy: Erica Jevons Sizemore, writer for New Homes & IdeasPhoto courtesy of The Village at Washington Terrace, RaleighThis is the second of a four part series: What is making the Triangle so desirable in 2020? Look for additional insights in the issues to follow.Since the first issue in our series exploring the Triangle area – weaving together what makes us a booming and vibrant community – we find yet another reputable source of ranking, not just across the country but across the world. In early February, Numbero.com, the world’s largest database of user-contributed city and country-specific data, ranked Raleigh, NC, second in quality of life worldwide, eclipsing earlier fanfare to date of limited criteria-specific lists. Charlotte also made the list at #9. The 227 cities cited in the Numbero.com study were ranked on attributes including safety, healthcare, traffic, pollution, climate, cost of living and purchasing power. As we revel in the Triangle’s tremendous quality of life, we reflect on the foundational resources and economic environment, keeping keenly aware of the area’s outlook for wages and housing.Growth brings with it a semblance of what was decades past (…ask a native about all the changes that they’ve seen in their lifetime) united with an explosion of new. We see buildings and businesses popping up daily and a staggering number of new faces to meet. It’s estimated that over 200 people move here each and every day, and it comes as no surprise with the Research Triangle Park and a strong job market regionally.Raleigh ranked #7 for jobs across U.S. metros with over 1+ million people by The Business Journals. Using Moody’s Analytics classic methodology, they’ve tracked wage growth, the unemployment rate and even bachelorette party frequency in making their assessments. These rankings and strong employment numbers bring to the area talented professionals and a new younger workforce who relocate looking for opportunity.Stable employment and strong wages in the Triangle have been an excellent backdrop to catapult the area and its growing concentration of first-time home buyers. Millennials make up the largest group of home buyers nationally at 37%, according to 2018 research by the National Association of Realtors. These buyers tend to be doing so for the first time at age 33, not surprisingly, after they’ve traveled the well-trodden path to homeownership – we rent, we date, we mate, we marry, many have children and then we buy a home. Even for those who’ve carved a different path, it seems that homeownership is on the shortlist of goals for many by their early 30s. That said, more than a decade following the market decline of 2008/09, a long expansion cycle, and yet presently, a possible correction, we could be on the cusp of a housing crisis untethered to either outlook.While the prime age factor and stable wage growth has helped many, including first-time buyer market millennials, and soon Generation Z, affordability has become a principal concern and one that local area officials and special interest groups are diligently addressing – spanning the socio-economic and demographic spectrum. “We have seen wage growth among high wage earners,” according to Gregg Warren, President, DHIC, Inc., “but those in occupations that support growth have not experienced the same. There is a challenging undercurrent among workers in lower income jobs who are helping us sustain the region’s prosperity. Their wages are not increasing in pace with housing costs and incomes are constrained in general.”Photo courtesy of Greenfield Commons, Chapel HillWith housing prices not quite as high in areas of the South and Midwest, as they are in many areas across the country, the effects of the affordability issue are subtler. DHIC, Inc. has been evaluating area needs and helping connect people to safe, affordable and desirable housing across the Triangle region since 1974. One area of importance has been supporting a growing aging in place population. In the 34 years Warren has been serving our community, he has also seen a tremendous demand for age-restricted housing for the ‘silver tsunami’ aging boomers, who are relocating to our region to be with their children, escape areas of higher tax, and seek out the aforementioned quality of life. According to Warren, “Age-restricted housing and family apartments are a couple areas of focus in our building efforts.” DHIC currently owns 2,700 apartments in the region. Capital Towers, a 296 unit renovation project off Six Forks Road in Raleigh, is a recent investment whereby DHIC, Inc. has brought together $25 million investments through a combination of tax credits, equity investments, bank funding, and low cost financing to offer independent living with wellness amenities, support services and coordination.Bringing together what is present today with what is needed in the future is crucial. “When you talk about ‘affordable housing’, neighbors’ ears perk up,” Warren notes. “We have been intentional over the years about quality, design, construction management and neighborhood fit, hiring the best architects and contractors. Our goal is to make beautiful housing available that will harmonize with the community.”On the whole, area real estate has been relatively affordable, comparatively, but costs are rapidly increasing. Across the U.S., 71% of people cannot afford to purchase a home, according to real estate research firm, Attom Data Solutions, when referencing a national median home price of $257,000. With prices across the Triangle steadily increasing year-over-year, today the median home is sold just over $287,000 – meaning many average wage earners cannot afford to locate and purchase a property that can fit within their budget and aspirations to be homeowners. That said, if we reflect back on the quality of life report by Numbero.com mentioned earlier, we find that our purchasing power, cost of living index and property price-to-income ratios are still strong for the Raleigh-Durham area.Requests for housing permits have reached a 12-year high; however, growth has not been evenly dispersed throughout the country. The majority of new construction is in cities across the South, like the Triangle, where 50% of all new residential development has been focused over the last 12 months. Unfortunately, area home buyers are still experiencing market inefficiencies, challenged by a shortage of properties which has pushed up purchase prices and resulted in diminished returns for affordability efforts. A contributor to the tightening housing market is ‘underbuilding’ and the increased costs of land and labor, according to the National Association of Home Builders. Time and regulation contribute to this inefficiency, and legislative initiatives are needed to expedite the review and permitting process for builders which may help curtail the supply and demand imbalance.Photo courtesy of Village Towns at Washington Terrace, RaleighEfforts to sustain our growth and offer a range of housing options to Triangle residents are top of mind with organizations like DHIC, Inc., area legislators and advocacy groups. Newly-elected Raleigh Mayor, Mary Ann Baldwin, is excited by the prospect of a city council working together to “make Raleigh an inclusive, welcoming city for all its residents… and leader in innovative housing solutions.” Her proposed 10-point plan for housing affordability is meant to tackle what’s ahead for Raleigh and beyond. Of the strategies and ideas she hopes will prepare the Triangle area and those in her constituency for continued prosperity, she plans to encourage construction of ‘missing middle’ housing (townhomes, duplexes, triplexes, etc.) across all zoning districts, permit accessory dwelling units also known as granny flats for aging parents, revise zoning rules and regulations, remove impediments to building cottage courts like those popular on the West Coast with amenities and shared spaces, and work to identify underutilized Wake County property that can be developed for affordable housing. Durham County has also recently passed legislation with similar impact. “Zoning along transit corridors and bus rapid transit is also especially critical, especially from Garner to Durham, or we will be in serious trouble for future economic development,” Baldwin asserts, “when companies look to relocate, they are evaluating the makeup of the Triangle and transit solutions for their future employees.”Having moved to Raleigh 30 years ago herself, Baldwin recounts the drivers for her relocating from New York were much the same then as they are for those hundreds of us finding a home here each and every day… “good education, job opportunities, affordable living and the weather”. She was also likely motivated by a focus on her growing career, the prospect of buying her first home and looking to what was possible within the Triangle community to which she moved. As stage and age change and evolve, we gain insight to what’s next. And while not always met with complete approval, developmental policies and efforts are being invested to support the supply of housing and provide opportunity to all area residents native and new to put down deeper roots in the Triangle. With well-crafted policies, dedication and a little patience, we will continue to get recognized for things like quality of life and surely keep it just the way we found it, or better! Erica Jevons Sizemore is a Broker, Realtor, and Certified Luxury Home Marketing Specialist (CLHMS) with Coldwell Banker HPW & Halffull Properties LLC. Erica’s background in finance and marketing is matched with a personal passion for an unparalleled experience, love of home design and inability to sit still – always brainstorming how to better position her gregarious clients to support their lifestyle and financial ambitions in their real estate endeavors. Erica joined Coldwell Banker Howard, Perry & Walston after 12 years in finance with Morgan Stanley and having worked as the marketing director for Berkshire Hathaway HomeServices York Simpson Underwood Realty in the Triangle. With a love of North Carolina and all things Raleigh, she has been an active volunteer and committee chairperson at many of our local community standouts, among them the North Carolina Symphony, Carolina Ballet, and Raleigh Chamber, and currently serves on the board of directors for the House of Hope NC.