New job announcements, limited inventory leading to increased home prices in Durham

Michael Perchick Image
Thursday, May 20, 2021
More jobs, limited inventory means increased home prices in Durham
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The year-over-year changes in Durham County are eye-opening.

Another day, another jobs announcement in the Triangle.

Thursday, Governor Roy Cooper announced that CARsgen Therapeutics Corporation would create approximately 200 jobs and invest $157 million in Durham, just the latest big investment in the area. Apple, Google, Fidelity Investments, and Tergus Pharma have all announced plans to add jobs in the area, with Tergus showing off their new facility last week.

"What I think has been the biggest difference here in the past few weeks with the recent announcements with Apple and Google and some of these other companies, is that it's given the market extra confidence that we're not on some type of bubble situation. It was starting to feel a bit unsustainable. And I think people see all these big corporations come in here. Oh this is just going to be the new normal," said Brooks Brittingham, a realtor and associate manager at Berkshire Hathaway's Durham office.

The year-over-year changes in Durham County are eye-opening.

According to Triangle MLS data, there 837 homes listed for sale in April 2020; in April 2021 there were just 283, a drop of nearly 2/3. It's why homes were on the market for an average of just 11 days last month, down from 21 in April 2020.

"We started getting calls at about 7 this morning," said Jenny Barber, an agent with Allen Tate Realtors, about a new listing on Somerknoll Drive in Durham. By early Thursday afternoon, she had nearly 50 showings already lined up, with plans for an open house Saturday and Sunday.

Barber, a Durham native, says she's never seen intense interest like this.

"The revitalization that started many years ago, and that's just continued to grow and become even more of a destination for a lot of people. The restaurant scene is amazing, you've got the art scene," Barber said of Durham.

The lack of inventory, coupled with low interest rates, are helping drive up prices. Triangle MLS data found the average sales price for a home in Durham County in 2020 was $304,294; in April 2021, it was $360,878.

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"We're seeing houses sell significantly above list - and so not only does a buyer need to bring a pre-approval letter, they may need to show proof of funds that they have the extra money what they're going over," Barber said.

"We've been seeing sight unseen offers, people making offers without ever stepping foot inside of the home with pretty intense and high non-refundable deposits. So we've seen an acceleration since the turn of the year reaching a new level that honestly we didn't even know was in there," said Brittingham.

Brittingham shared a report of 65 homes in the area that Berkshire Hathaway's Durham office worked on between mid-April and mid-May to highlight the intensity of the market. Of 12 homes sold in the $300,000 to $400,000 range, the average sales price over list was $20,250, with one home selling for $80,000 over ask. All four homes sold in the $450,000 to $500,000 range went above ask, with an average of $51,250 over the list price.

The addition of those high-paying jobs has helped brought increased interest in the area, which had already been experiencing population growth.

"This has become a very big in-migration state with all of the industry and companies that are moving here, and setting up maybe a second headquarters, or having a large presence here," Barber said.

With fewer homes on the market and the population growth showing no signs of slowing down, there is urgency to build more homes. To do that, Brittingham said builders are looking to surrounding areas.

"There's not as much land left in Durham County and Wake County for the builders to gobble up. So we're seeing them go out to some of these neighboring counties. Granville County, Alamance County. That's where there's some affordability to buy the land, to get through the development process, and create a more affordable product," said Brittingham.

Agents also note the increased presence of out-of-town buyers in driving up prices, some of whom now have more flexibility due to the ability to work remotely.