North Carolina's real estate market is still hot and attracting more investors

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BySamantha Kummerer WTVD logo
Thursday, November 11, 2021
Triangle's real estate market attracting more investors
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Opendoor has consistently ranked as the top buyer in Wake and Durham counties over the past few years.

The percent of buyers purchasing more than one home has increased dramatically throughout Wake County in the last three years.

The ABC11 I-Team uncovered so far this year around 14% of single-family homes sold were purchased by a buyer who bought more than one property. County tax records show in 2019, around 10% of homes were purchased by multi-property buyers.

Durham County is seeing a similar trend with 21% of homes sold this year were purchased by buyers who bought more than one property. This is up around 2% since 2019, according to an analysis of county tax records.

"We have seen investors moving into from other parts of the country, and globally," said Brett Bushnell.

Bushnell is a realtor in the Triangle and the president of Raleigh Regional Associations of REALTORS. He said he's noticed an uptick since Apple and Google made announcements regarding investment in the Triangle.

An ABC11 I-Team analysis of county tax records found Opendoor has consistently ranked as the top buyer in Wake and Durham County over the past few years.

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Since 2019, Opendoor has purchased more than 1,600 single-family homes in Wake County and more than 500 in Durham County.

"There's always been kind of that business model out there for investors. But they've basically been able to amplify it because of the size and scale of they're doing things. And, you know, it's worked out well, but it's also challenging to scale up to that kind of level," Bushnell explained.

The increase in ibuyers like Zillow and Opendoor along with other investors comes at a time when the market is already lacking supply, so these companies add pressure to the competitive market.

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"We still are very affordable for a lot of investors and a lot of first-time buyers and that's why you have the investors coming in and the first-time buyers and also people relocating for jobs. That's all extra demand. And we just don't have the supply." Bushnell.

Wake County's data shows the average single-family home sales price increased by 21% between 2019 and 2021.

Stakeholders said often investors are targeting price ranges slightly above first-time home buyers, but the impact of increased buyers can impact all levels of the market.

However, county records showed the average home purchased by Opendoor was around $100,000 below the average sales price in Wake County over the past three years. Similarly, in Durham County, data showed Opendoor's average home sale was 30% lower than overall home sales in 2019 and 2020.

"We do know the added competition clearly they do make housing relatively less affordable," said UNC professor Roberto Quercia.

Quercia is a distinguished professor at UNC Department of City and Regional Planning and has studied affordable housing for years.

"The people who have suffered the most in this market are the low-income families, our essential workers. Many of them are obviously people of color. The only option they have is to live farther and farther out," he said.

Quercia said investors can look more appealing to some sellers who want to sell their homes fast and for cash.

"Typically a family, especially somebody with low income, maybe not with pristine credit score, will have the disadvantage and the seller may be more likely to sell to somebody for cash rather than waiting on the buyer who may not be able to get the financing to buy the home," he said.

Yolanda Winstead is the president and CEO of DHIC, a Raleigh nonprofit organization that helps connect residents to affordable housing options. Winstead said some of the first-time homebuyers they help are facing multiple challenges. including a housing shortage, increase buyers, and cash investors.

"Obviously, the more cash you can bring to the table and your ability to put more down upfront to just take the house off the market gives you an advantage that obviously, low to moderate incomes, first-time homebuyers, who typically need some sort of down payment assistance to get into the home can't compete against," she explained.

These compounding challenges caused DHIC to advise some buyers to wait. Winstead explained local leaders and stakeholders need to be discussing ways to manage future growth with affordability.

"We want people to come here, but we also need to make sure that we're cognizant of the folks that were already here and creating opportunities for them to remain in the community where they contribute," said Winsted. "Where's the balance?"

In an effort to combat the market, Winstead's team is working to find places to build affordable houses but also to preserve affordable rental units as well.

"We can't build fast enough to address the need. So we do have to focus as a community of not only building more units but preserving existing affordable units that are so that subsidized," she said.

Bushnell agreed that the market isn't going to change overnight and is going to take lots of collaboration.

"This isn't a one-party or one size fits all. It's really going to be a multitude of different approaches that probably solve this," he said.