Another point that I keep forgetting to make: all of us tend to focus on the new buildings, because animal brains are wired to notice what’s new and different.
But new houses are only ~1% of all houses. (This is broadly true nationally, and even in Raleigh: 2022 ACS says there were 225,320 housing units in Raleigh, and Raleigh issued building permits for 1,756 new units in 2023, so in 2024 only 0.8% of housing units in Raleigh are <1 year old.) So really, when we talk about overall housing prices, we should broaden our focus from new construction.
And the good news there is that there’s a broad consensus among researchers that new housing construction lowers prices across the market.
“The ability of new supply to dampen rent growth… is rather a trend that we observe in many markets. Raleigh, NC [metro] had both the second highest rate of multifamily permits-per-capita issued in 2023 and currently has the second sharpest year-over-year rent decline as of our latest estimates.”
Note that Raleigh has since dropped from #2 to #10 in permits per capita from 2023 to 2024 (Jan-Apr). Austin has kept its #1 rank.
Former North Hills hotel converted to one-bedroom apartments i was in raleigh a few weeks ago and saw this. is this real…and doing well? the website claims " * Upgraded Induction Cook Tops with High-End Microwave/Oven Combo in Each Apartment" rents starting at 999usd.
While I’m surprised that didn’t reopen as a different hotel, gotta say that’s a good reuse of the building. The prices for that size are not what I’d consider affordable. (Maybe if they were downtown, but north of 440? Hmmm. At least there’s amenities.) But hey, I bet they’ll get leased sooner than later.
I don’t think you’re understanding my comment…. That was my exact point dude. $999/mo is not affordable for literally a hotel room with a fold-out stovetop (???) to cook with. The people that can afford $1000/mo on their own will pony up the extra couple hundred to live in an actual apartment.
I literally said this would be a lot cooler if they were $750/mo MAX. What are you misreading from my comment?
EDIT: also before you get on a high horse- I am not well off in the slightest. I am speaking from a pretty average-American perspective FYI.
My 25 year old nephew, grew up and lives in DC/MD, visited Raleigh over the fourth, loved it. Easy to get around (car, unfortunately), and cheap. LOTS of people his age. His yoga instructor relocated from MD, said the same thing - so much easier to live here than DC.
A slowdown in apartment building, because of oversupply and increased competition, will result in rents declining and amenities increasing . Demand is there, and eventual scarcity will drive rent back up, and dormant apartment projects will recommence.
During the interlude, hotels, and condos are needed - condos for boomers wanting a city vibe
after a recent trip thru Minneapolis, madison, Milwaukee, Detroit and several small north-midwestern towns…i agree. and I have read WI and Minneapolis get high ranks
It looks like the city of San Francisco may be looking to ban RealPage which basically is how some apartments set their rent. In general this has been mentioned as a cause that housing prices are high since multiple apartment complexes agree to set specific prices.
I’m interested to see when and how this plays out for San Francisco, but wonder what RealPage’s influence in Raleigh is.
I think that we can clearly start focusing on GenX too since many of them are empty nesters as well.
As someone who is a condo-dweller downtown myself, I agree that we need more ownership opportunities, but I also think that the city needs to recommit to the idea of the 18 hour city so that a city-vibe and walkable urban experience can be realized. As it stands, there’s still a dearth of daytime resources for that lifestyle. Smoky Hollow should have given us that opportunity, but it’s not playing out that way with most of the storefronts being filled with dining and nightlife businesses. The Creamery is our next opportunity, but I’m not holding my breath given the persistent direction of Glenwood South, despite it being Raleigh’s most residentially dense neighborhood.
Agreed on every point here. The city absolutely needs more ownership opportunities. I’m also disappointed that the increased office population from Smoky Hollow, Bloc 83 haven’t resulted in more daytime focused eateries and businesses (although, maybe everyone is eating Italian these days).
After learning how WFH-heavy our region is, I’m hopeful that all the new units coming online will help with this.
Anecdote time: my wife and I (we both work form home 100% of the time) went to work at the new Sir Walter Raleigh location with a friend (100% WFH) who lives in 511 Faye. As the day wore on we became a sort of informal impromptu coworking group as our friend invited various other people she’s made friends with who also live at 511 Faye who also WFH from between 1-5 days a week. And lots of other people I have met who live downtown seem to have a similar schedule (1-5 days WFH per week).
I still hopeful that more employers will move or stay downtown. But if Raleigh retains this many WFH jobs in the long term, it may not be strictly necessary for downtown’s daytime businesses to thrive. The new Sir Walter location seems pretty dang busy every time I have walked by, day or night.
I work two towers next door and my work schedule is minimum two days in the office a week (Tuesdays and Thursdays). This applies to everyone at the office.
A lot of the new apartments being built downtown are also starting to add co-working spaces as a resident amenity. I know Platform and 400H both advertise that as a benefit. I think having more options will just mean more people living downtown and the type of day traffic around town will just adjust.
According to Yardi Matrix monthly report October 2024 Raleigh apartment rents are dropping 2nd most of the largest metro areas. Year over year rent growth is - 3.5% only Austin had a bigger drop at -5.5%. Charlotte rent growth is -1.9% and Nashville’s is -1.5%.
However this is likely temporary has Raleigh has the highest year over year job growth of any of these 4 peer cities +2.4% which is one of the highest in the country! Job growth means new residents.
. Demand is there, and eventual scarcity will drive rent back up, and dormant apartment projects will recommence.
