RALEIGH – Raleigh remains poised for growth and economic development, according to a new publication from the Raleigh Chamber of Commerce, which today hosts the organization’s Launch 2022 event, which is still in progress. (A live stream appears below.)
The report, Economy & Business 2022, highlights notable accomplishments during the organization’s prior fiscal year, including what the report calls the “largest economic development increase in Wake County’s history, totaling 5,815 new jobs and $3.7 billion in investment.
“For many reasons, it has been a historic year for the region,” Adrienne Cole, president and CEO of the Raleigh Chamber writes in the report. “We have a lot to accomplish in 2022 and with the caliber of leadership in this market, we are on our way to creating a more prosperous future for our members and community.”
Specifically, the report highlights the investments that will be made in the region by FUJIFILM Diosynth Biotechnologies, Apple, Invitae, Ineos, and Amgen, and states that there is an average of 40 additional projects under consideration at any given time.
The Raleigh Chamber’s work expands beyond economic development, writes Kevin Howell, Vice Chancellor of External Affairs, Partnerships, and Economic Development at North Carolina State University, who is also the board chair for the Raleigh Chamber.
“Over the next year, the Chamber’s focus will remain on furthering its core priorities: driving sustainable economic growth, enhancing the community’s quality of life and strengthening member businesses,” Howell writes in a letter that appears in the report. “Together, we will work to address the challenges that come along with prosperity by advancing initiatives across transportation, equity, support of small businesses, entrepreneurship, economic development, talent recruitment and retention, education and public policy.”
As population and labor force grows, watch the region’s real estate markets
According to the report, total employment in Wake County is 622,812. In the combined Raleigh-Cary and Durham-Chapel Hill metropolitan statistical area (MSA), the labor force grew from 685,220 in 2020 to 1,059,878 in 2021, and the population growth grew from an estimated 1.2 million people in 2020 to an estimated 2.1 million people in 2021.
And the Raleigh MSA ranked third in the nation for growth between 2019 and 2020, according to U.S. Census data referenced in the report.
“The labor market will still be a challenge for some economic sectors in the region in 2022 and beyond,” writes Dr. Michael Walden, a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University, who is a contributor to WRAL TechWire as well. “Fortunately, as out-of-state workers continue to move to the Raleigh area, the aggregate labor supply will grow.”
But as more people relocate to the Triangle, either for new job opportunities, to take advantage of newfound remote work environments, or for retirement following a job resignation, the region’s real estate markets may continue to see demand outpace supply.
That means that prices may continue to increase, as well, in the for sale market as well as the rental market.
Two trends in residential real estate that are expected to continue are the building of new construction townhomes, including luxury townhomes, said Brian Leary, COO of commercial real estate firm Highwoods Properties, at the Launch 2022 event, and the development of new construction homes that will immediately become rental homes.
That business model, known as “Build-for-Rent” is a “huge new asset class,” said Leary.
Another trend is the ongoing development of commercial multifamily properties, including luxury apartment buildings, as well as the acquisition of existing apartment communities, including a record number and total sales volume of properties sold in Wake County in July 2021.
“2021 showcased the residential real estate industry’s agility and creativity in finding homes for individuals and families,” said Susan Sanford, the relocation director for Berkshire Hathaway HomeServices, York Simpson Underwood Realty. “A moderate increase in interest rates in 2022 may dampen demand, however, we anticipate home sale prices to continue to increase, driven by the low cost and high quality of living in Wake County.”
According to the report, resale inventory was down 32.6% in 2021 and new construction inventory is down 53.4%.
Buyer demand continues to outpace supply, said Simpson, and the result was that median sales price increased by nearly 17% to a median sale price of $395,000 in Wake County.
“Our 2022 real estate outlook suggests that the record trends of 2020 and 2021 may begin to moderate,” writes Simpson in the report. “With just 0.6 months of supply of housing inventory, we expect home values to continue to appreciate in 2022.”
A recent forecast from Zillow expected to see an appreciation of home values of nearly 24% through November 2022, compared to November 2021.
“Limited inventory, increased values, and rising interest rates will likely steady the number of home sales and could bode well for a soft landing as the market reaches levels that will become the new normal,” writes Simpson in the report.
Migration into the market is at “an all-time high,” writes John Kane, the CEO of Kane Realty Corporation in the report. “Residential for sale and rental is in high demand,” writes Kane. “Industrial is outstanding, office demand is increasing and retail is recovering.” Kane Realty Corporation is among the developers of the Downtown South project.
According to the PwC and Urban Land Institute’s 2022 Emerging Trends in Real Estate report, the main drivers of commercial real estate in the next decade will be flexibility, convenience, and resilience. That’s because the economy and local markets will react, respond, and recover from the global SARS-CoV-2 pandemic, the PnC report states.
Raleigh, and the wider Triangle region, are primed to be resilient, however, writes Kane, as the PnC report lists Raleigh as the number two market to watch, across all real estate product types.