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Is North Carolina Good for Real Estate Investing?

North Carolina is located in the southeastern region of the United States, occupying a strategic spot along the Eastern Seaboard. Flanked by South Carolina and Georgia to the south and Virginia to the north, North Carolina’s diverse geography pulls in property investors from all over the world looking for a piece of this popular housing market.

However, before taking the plunge, it’s important to understand whether North Carolina (NC) is a good option for you – and we can help you answer that question. In our blog post, we’ll explore the latest stats and trends of the NC real estate market, along with some of the best cities to consider for rental property investing – helping you determine if this state is right for your financial goals.

What To Know Before Investing in North Carolina Real Estate

North Carolina’s population growth has been a key factor in the current strength of its real estate market. In the past decade, NC’s population has grown by nearly 10%, making it one of the fastest-growing states in the US and a prime candidate for paying attention to its real estate prospects. This growth is indicative of the state’s economic strength, with businesses relocating to take advantage of its good tax incentives, low cost of living, and quality infrastructure.

This means that foreign investors looking to benefit from North Carolina’s real estate market should provide them with plenty of potential opportunities for both capital appreciation and rental yields. Thanks to its population growth and job creation initiatives, NC might be one of the best places to invest.

Source: https://worldpopulationreview.com/states/north-carolina-population

 

Population Growth

  • The population of North Carolina is over 10.4 million, according to the S. Census Bureau, and it is the 9th most populous state in the US.
  • North Carolina’s population has grown by 9.5% over the past ten years (April 2010 vs. April 2020), and the state is one of the fastest growing in the country.
  • Renter-occupied households account for 33% of the total housing units in NC, based on data from Census Reporter.
  • The median age in North Carolina is 39.4, with 61% of the population between 18 and 64.
  • Nearly 35% of the residents hold a bachelor’s degree or higher, about the same rate as in the US.
  • Data USA reports that per capita income is $56,642, increasing by over 3.7% in the last year alone.
Source: https://fred.stlouisfed.org/series/NCNGSP

 

Job Market

  • North Carolina’s GDP is over $662 billion and has grown by about 53% over the past ten years, according to the Louis Fed.
  • Key industries in North Carolina include aerospace & defense, automotive and heavy machinery, biotechnology and pharmaceuticals, information technology, textiles, and tourism.
  • NC is also known as the “Furniture Capital of the World” and home to the world’s largest furniture store, furniture manufacturer, and furnishings industry trade show.
  • The employed population of North Carolina is 4,680,000 and has grown by 1.36% over the past year, according to Data USA.
  • Unemployment in the state is down to 3.9%, according to the S. Bureau of Labor Statistics (November 2022), the lowest annual rate since November 2012.
  • North Carolina is home to over 100 colleges and universities, including North Carolina State University in Raleigh, the University of North Carolina at Chapel Hill, Duke University in Durham, and Wake Forest University in Winston-Salem.

 

North Carolina Real Estate Market Stats & Trends

Source: https://www.zillow.com/home-values/36/nc/

Although home values in North Carolina increased by nearly 18% over the past year, prices in the state are still relatively affordable compared to other areas of the US. Low home prices appear to be attracting the attention of home buyers and investors alike, with properties going under contract just two weeks after being listed for sale.

  • The typical home value is $330,000.
  • Increase of 17.9% year over year.
  • North Carolina home values have more than doubled since August 2014.
  • The median sale-to-list price ratio is 0.998, meaning homes sell for about the list price.
  • Homes in NC are going from listing to pending in just 14 days (median) as of November 2022.

 

Where To Look for Investment Properties in North Carolina

The above stats and trends help to explain why buyers are attracted to the housing market in North Carolina. However, there are certain factors to consider before investing in the state – particularly when deciding the best location and type of property to invest in.

For starters, it’s important to understand the local culture and demographics. The housing market can vary dramatically based on region, so researching different neighborhoods will be beneficial when selecting a potential property. Different regions may have diverse rental incomes and occupancy rates, so this should also be considered when making your decision.

Here are 5 cities in North Carolina for real estate investors to consider, ranked from the most populated to the least. Population data for each metropolitan area is from Data USA, home value trends are from Zillow (November 2022), and median rents for 3-bedroom homes are from Zumper (January 2023).

Charlotte

Charlotte is the largest city in North Carolina and one of the most populated cities in the United States. It is known for its diverse population, vibrant culture, and booming creative industries. Located in the south-central part of the state, the city boasts a strong economy driven by banking, automotive engineering, and energy production.

  • Population: 2,600,000
  • Change in the population (since 2020): 1.9%
  • Home value: $398,423
  • Change in home values (5-year): 80.1%
  • Median rent: $1,930
  • Rent change (year over year): 9%

 

Raleigh

Raleigh is the capital city of North Carolina, located in the central part of the state. Home to numerous universities, Raleigh is part of the Research Triangle, a hub for education and research. Known as the “City of Oaks” due to its many oak trees that line the streets and parks, Raleigh is also an appealing city for those looking for an outdoor lifestyle with plenty of green space and recreational activities.

  • Population: 1,360,000
  • Change in the population (since 2020): 2.3%
  • Home value: $441,618
  • Change in home values (5-year): 71.0%
  • Median rent: $1,895
  • Rent change (year over year): 8%

 

Greensboro

Greensboro is located in the north-central part of the state, about midway between Charlotte and Raleigh. The city is known for its multiple universities, art and cultural institutions and is a major manufacturing center. Greensboro’s thriving downtown offers a variety of attractions, including museums, parks, restaurants, galleries, and live music venues.

  • Population: 767,500
  • Change in the population (since 2020): 0.7%
  • Home value: $248,598
  • Change in home values (5-year): 73.8%
  • Median rent: $1,620
  • Rent change (year over year): 7%

 

Winston-Salem

Winston-Salem is located in the northwestern part of North Carolina and is home to numerous universities and museums. Known as the “Twin City” for its close connection with nearby Salem, Winston-Salem has a unique blend of history and culture, offering an array of attractions from historic sites to local breweries.

  • Population: 671,150
  • Change in the population (since 2020): 0.7%
  • Home value: $243,153
  • Change in home values (5-year): 83.7%
  • Median rent: $1,600
  • Rent change (year over year): 7%

 

Durham

Durham is located in central NC, just east of Raleigh. With its vibrant downtown and notable universities, Durham offers an array of attractions and things to do. Durham boasts a rich cultural history with art galleries, live music venues, and renowned restaurants, making it one of the most exciting cities in the state.

  • Population: 636,250
  • Change in the population (since 2020): 1.5%
  • Home value: $409,540
  • Change in home values (5-year): 87.7%
  • Median rent: $1,927
  • Rent change (year over year): 10%

 

Other real estate markets in North Carolina

Here are ten other places in North Carolina to consider investing in real estate, ranked by population:

  • Fayetteville
  • Cary
  • Wilmington
  • High Point
  • Concord
  • Asheville
  • Greenville
  • Gastonia
  • Jacksonville
  • Huntersville

 

Investing in North Carolina Real Estate

Investing in North Carolina real estate can offer potential cash flow and income opportunities. When leveraged correctly, long-term and short-term rentals may be a viable way to capitalize on the local rental market. Property investors should consider researching the local market and assessing areas of opportunity to make informed decisions when investing in real estate in North Carolina, keeping in mind that all investments come with an element of risk.