Note: Our market forecast includes Durham data and data from its surroundings, including Chapel Hill, North Carolina.
Why consider Durham for real estate investing?
Also known as "Bull City," Durham, North Carolina, is the fourth most populous city in the state and, when combined with neighboring Chapel Hill, forms a metropolitan area that is home to approximately 644,000 people, according to 2019 U.S. Census population estimates.
In addition to being fairly populated, Durham is one of the vertices of what's known as the Research Triangle. The University of North Carolina system, Duke University, and North Carolina Central university all have research facilities in the area, which makes Durham a hub for both education and employment.
The state of the market
All in all, the Durham housing market seems to be faring better than many areas of the country. Although there's no doubt that the pandemic has impacted the area, many of the indexes we measured have been showing signs of positive recovery. With that said, below are three major trends to keep in mind.
Rents are on the rise
Many major cities in the United States have been experiencing a steep decline in rents during the pandemic. Put simply, renters have been fleeing high-cost areas now that they have the ability to work remotely. However, fortunately, that is not the case with Durham. The median rent actually increased 2.2% on a year-over-year basis. While $1,454 is still below the national average for rent, this increase is a major boon for investors.
Inventory is tight, but housing permits are surpassing projections
With just 1.7 months of housing inventory, it's safe to say that the Durham area is also experiencing the inventory shortage that's gripping the rest of the country. In the short term, this shortage will likely have an effect on investors' bottom lines. Yet a silver lining can be found in the fact that the number of issued housing permits, for both single-family homes and multifamily units, is far outpacing projections, which could help ease the inventory crisis in the not-too-distant future.
Real estate financial health indicators are better than average
While mortgage delinquencies in Durham are up on a year-over-year basis, it's important to note that the area is still below the national average in terms of delinquencies. In addition, for their part, foreclosures are actually down 0.1% for the year.
Durham housing demand indicators
All data and charts supplied by Housing Tides by EnergyLogic.
Overall, despite enduring some lasting impacts from the pandemic, Durham’s housing demand indicators point to the fact that the area’s real estate market is operating with a strong foundation.
While unemployment is up in the Durham area on a year-over-year basis, it's important to look at these numbers in context. The 1.4% jump in unemployment is more than likely due to the coronavirus pandemic, which has been fueling unemployment rates across the country for the last year.
In the scheme of things, Durham has fared pretty well. Even when unemployment reached its peak of 10.6% in May 2020, the Bull City was still well below the national average of 13.3%. Since then, unemployment has made a steady recovery and now sits at just 5.2% as of February 2021, which is also below the current national average of 6.7%.