Amid the thriving real estate scene in North Carolina’s Triangle area, a new trend has emerged.
At the beginning of 2021, many buyers came on the real estate scene in North Carolina knowing they might be entering the market at a tough time. Competition was fierce among buyers, and bidding wars often soared to offers far above listing prices.
Instead of battling it out for an existing home, many buyers opted for new construction. Less than a year later, some of them are already selling — and turning huge profits. Teresa Coker of Onwire Realty weighs in on the underlying causes and details of this new trend.
Quick Sales of New Construction
Real estate professionals in the Triangle area are beginning to see a trend of recent buyers of new construction homes selling them again after just a few months — and seeing substantial earnings.
Coker notes that profits around $100K are not uncommon. From her team alone, she’s seen a home purchased for $515K in April and sold in November for $625K; another built in early 2021 for $334K and recently listed for $435K; and a third newly built home bought for $463K, now listed for $570K. The locations of these homes range from Durham to Fuquay Varina as a growing portion of buyers head to fringe markets for more land and slightly lower price points per square foot.
Appreciation in the Triangle Area
Though in many parts of the U.S. the peak of the recent housing surge occurred in the first half of 2021, the real estate market in the Triangle area continues to see substantial growth and competition.
Due in part to continuously changing expectations for remote work for many employers, countless professionals are leaving expensive coastal cities in favor of more affordable locations. Those who aren’t making a transition to remote work can also find thriving job opportunities in the area, as tech giants like Apple establish headquarters near Raleigh.
Although homes continue to appreciate in the Triangle, average home prices still remain substantially lower than other tech hubs like San Francisco. Tech workers and young entrepreneurs are moving to the Triangle in droves, searching for new opportunities, high quality of life, and relatively low cost of living.
Low Housing Inventory
Low housing inventory drives up competition for existing homes, pushing hopeful buyers to write offers that forego inspections, or to only conduct inspections for informational purposes. While waiving inspection can be risky regardless of the home, newly built houses and resold homes less than a year old still offer a layer of protection for buyers in the form of the one-year builder warranty.
In addition, competing for newer homes feels safer for many buyers because a home’s major systems are more likely to be functioning properly when the home is fairly new. In a competitive market with very few homes to choose from in the first place, many buyers are willing to pay a premium for a newer home that they can more easily trust.
The Draw for New Construction
In addition to feeling like a safer option, buying newly built houses also offers updated features. Especially as tech professionals with larger budgets move from expensive coastal cities, it’s common to see premium offers for newer homes. In many cases, a slightly higher purchase price will pay buyers back over time as details like smart systems and efficient windows help them save on utilities for years to come.
Plus, because appreciation is expected to continue in areas like Raleigh and Durham, newer homes offer an excellent opportunity to build equity. From an investor standpoint, purchasing a new construction home in this market is appealing because with little to no work, there is still a high probability of an impressive profit within a year.
Are you looking to enter the new construction market in the Triangle? Join our upcoming webinar with Teresa Coker of OnWire Realty where we’ll discuss the ins and outs of New Construction plus this and other housing trends in the Raleigh market.