I’ve lived downtown for about 10 years now. 5 as a renter and 5 as a homeowner. During this time I’ve actively watched real estate trends and demographics shift near the city center.
Over the past 5-7 years there has been an influx of young professionals and young families buying up older/smaller Mordecai, Boylan Heights and Oakwood properties. That trend, over the past 3 years, has really shifted to East Raleigh. And in about 3 years (or less) East Raleigh’s market will likely be completely saturated.
I am trying to figure out what will happen to these types of dt Raleigh neighborhoods in the mid-term and also in the long term.
Will these families plant roots, add on to their homes and stay downtown? Or will these downtown neighborhoods become mostly high-end rentals? Also, at what price point does that shift to ‘mostly high-end rentals’ happen?
It’s hard to find cities to compare to because there are a lot of moving parts. The early 80’s millennials started a massive shift out of the 'burbs and into the cities and it’s only escalated with the next generation. So I guess you can look at Austin or Portland, but I wonder what this generation will end up doing long-term.
Well Mordecai has no historic protections and as a result people are tearing down the things that made it charming in the first place…the houses…and putting up “schlock”. Term from another board…
Roots or not, this is the trend that bothers me most. Luckily in east downtown a large number of houses are getting rehabbed instead of torn down, but that might a function of the land price differences between Mordecai and the east side…more or less twice as much for land in Mordecai.
I understand your point, and it’s been discussed a lot over the past few years, however that discussion is completely different then what I’m asking.
I"m asking what people believe will happen to these neighborhoods resident wise. Will it be young professionals and families that have bought in on the low end, add-on to their house and stay there long term?
Or will those young professionals and families decide to rent their house , make a profit, and move out to the 'burbs for more space?
I think the answer to that questions dictates what this city’s fringe districts feel like…and what the culture becomes.
I think making a quick assumption that once rents get extremely high in Mordecai/Oakwood/Boylan that these families will move out and rent would be disregarding the fact that the generation in question has CHOSEN to abandon the 'burbs and push for a more livable city.
At the same time, I’m asking if there is a price point that eventually makes it dumb not to just go ahead and rent. (DC would be a good example of this)
I don’t know about the dynamics of Oakwood and Mordecai but in Boylan Heights the trend has been moving in the opposite direction of the scenario you’ve laid out. Properties that were rentals (406 S Boylan/678 Dorthea Dr) or multi family (Dorthea Gardens) have been turned into single family homes. It seems that most of the turn over in available houses have been straight sales. People stand to make so much from the sales of homes in Boylan, especially people that have owned houses in the neighborhood since before the Great Recession, I would think folks would look to cash in rather than rent.
But it’s just a guess on my part.
I live in Thompson-Hunter, directly east of Moore Square and I think there is some of that where people are moving and either renting the house they bought here in the 2000s (even the 90s) or they are selling. The reasons, for a majority that I know, is that they are moving away from the triangle because of new jobs. In some cases, they are singles who have met a significant other and either they both move to east downtown or move out to the burbs.
That’s my perspective anyway and of course, I haven’t met everyone.
I also think the kid factor is important as I know plenty of young families in east downtown. They are NOT following the trend of saying, “Well, we had two kids, time to move to the suburbs” and instead favor this area a lot. At the same time, right now, a lot of them are infants and toddlers. Let’s see what happens when they have to enter the wake school system, which is a huge factor it seems in real estate.
I could go on but again, this is my slight perspective.
I don’t think such an outcome is a function of expensive downtown real estate vs cheaper stuff in the 'burbs, but more a function of job mobility. E.g. I own a house downtown. I have a chance to move elsewhere and do the same work. I’d keep the house and find a similar (urban/downtown) place to stay in a new city and hold the Raleigh house since it’s appreciating. Very few people would grin and move from a sought after downtown location and move to the 'burbs. Some situations (like Nickster) might require it, but even he laments it.
Decades ago the opposite of what you’re suggesting happened…people moved to the 'burbs because it was *more expensive…safer or more desirable or whatever…and a handful of those folks bought up and cheaply rented out downtown properties. Sort of setting the stage for the for the house flipping and gentrification of today.
I live in East Raleigh and see two things related to your core question.
If you bought anytime recently you probably have a mortgage payment that is higher than what actual rents around here are.
Everywhere else in Raleigh is either more expensive or feels like a downgrade.
Maybe I think differently about this, but our neighbours who walk their kids to the local schools seem to have great experiences. So what would we gain by going to the burbs? The thing Leo mentioned about moving out of the state and renting it out makes sense to me. I think an opportunity in Durham would make me think hard on this, but I would probably need to sell to get a good downpayment for over there.
Something I think is happening which is driving lots of this is the higher numbers of people who have lived in the downtown apartments. There are lots more of those apartments now, so you have lots of people who have never owned a house and are getting started living in them. They love being downtown near work and everything, then they get to the point of wanting to buy a house and don’t want to lose that. These neighbourhoods you mentioned are where they can do that. This story matches what I did. I lived in the Devon on Gleenwood South. Neighborhoods around there are ridiculously expensive, so I looked at 5points, the same story, then Mordecai, same story smaller houses, and ended up in East Raleigh.
Yeah, I mean we bought a hosue downtown about 5 years ago and everyone kept saying that we’ll love it until we have a kid and then we’ll move to the 'burbs. I think that is just conditioned thinking.
We had our first child and are loving living downtown. In fact, 8 other families in our direct vicinity had their first kid within a few months of us. Everyone seems to be content with their downtown family life. I wonder if that changes if/when people have their 2nd child.
Anyways, I think there is a price point that would make people consider moving out of the city and renting their place. My guess is that price point is somewhere between Austin rents and DC rents. For example, a 3-bedroom 2-bath house renting for $4k or $5k. We are still a ways off of that. Raleigh is seeing $2k to $2.5k for houses in these neighborhoods.
Part of the reason rents are where they are is because there is still a lot of inventory in East Raleigh that is walkable to downtown. So for those rent prices, why not just buy and fix up something close.
But with Apple and/or Amazon, downtown housing will reach saturation REAL fast and these established neighborhoods with yards will likely become the hottest properties in town.
That is just my take. I was curious to hear how others saw it playing out.
*Also of note: Those who are buying downtown are mostly the older of the millennials. It’s extremely likely none of them have pensions (like our parents did). So a high-end, in-demand rental property downtown would be a nice little income source for those latter years.
I bought a 3 br house in east downtown 2.5 years ago. I am confident I can rent it for 50% more than my mortgage payment (but I found something of a deal ADUsSomeday), and have never felt one tiny inkling about moving farther out to some soulless, ‘Lonesome Pines’ $150 in dues HOA, subdivision. I am a stroller push from 2 or 3 parks and would be able to eat up my yard with some expansion to my house if it came to it, before moving farther out. I grew up in the 'burbs and hated it (not just because I was an angry teenager…it was the 'burbs themselves) and when I finally had to come to downtown Raleigh for Prom, I was like…wait…you people have been hiding this from me all these years?!? I then swore I’d hitchhike to Portland or Seattle and live in a tent before I’d ever live in a place I’ve previously described. So while my rants might not be within one standard deviation of folks opinions on this matter, I am a data point nonetheless.
I really think a lot of this comes down to what your priorities are for space.
If you want to raise multiple kids in a 3,000 sq. ft house that includes a bonus room, a den, a “man cave” and some other specialty room, by all means, go for it. When you expect those amenities in a downtown area, then expect to pay for it.
The downtown area allocates space differently. Instead of a “man cave” in your basement, you go to a local bar. Instead of an outdoor “oasis” patio with grill, you go to a rooftop restaurant.
All of this comes down to lifestyle building, in my opinion, and if you want a more private lifestyle with space, burbs are your best bet. If you want a more social lifestyle across shared spaces, that’s what downtowns offer you.
There are tradeoffs to each. Burb living is dependent on a lot of systems, car driving and low transit service being a big one. Urban living may be privacy or space. Depends on how you view things.
Will someone trade one lifestyle for another? Generally, I don’t think so as long as downtown is still offering great experiences.
I think it’s definitely conditioned thinking! Also - 2 kids in I can say our decision to live downtown is just reinforced. We love living in a bikable / walkable location and can’t imagine a life where we had to drive our kids off to school, etc. Urban living IMO is much less stressful than a suburban model where you spend half your life in your car driving kids around, etc. Not for me!
I’ve owned / lived downtown since 1996, starting with the Cotton Mill. When I bought there, many told me that I was crazy due to the “bad” things on all sides. One by one, all of those “problems” have fallen to the wayside. With the new Capital/Peace improvements and the future Devereux Meadows park that will replace the city services yard, & Smokey Hollow the full potential of that location is coming to pass.
I tell this story because I think it’s a story that will repeat in every corner and adjacent neighborhood in downtown over time.
I liked the idea of living downtown when I moved here and it was one of the draws. The recession and all the cancelled projects kind of changed that for me. Now I live in the suburbs but close to downtown. If anything I think id move to one of those hardly Raleigh neighborhoods where I could get a bigger house and more space. I don’t have any kids and we are not hurting for money, but we aren’t legit rich or anything so we are limited by price. I just couldn’t fathom living anywhere downtown because the price point limits so many things I’d want. If it was DC or Boston I could justify the convenience factor. But it’s so easy to get in a car and drive for 10 minutes here. I do wish I had more money in my 20s because I would’ve definitely bought some rental properties on the outskirts of downtown and made bank now.
Plans were submitted to the city for 821 Wake Forest Rd. to restore and redevolep one of the larger homes in that area into office space. Much better option that tearing it down and building something completely out of character for the area. SR-64-18
Excellent. Better than the tearing down for sure, like just happenedto this beautiful (and large) house. 2,234 sqft and they paid $350,000 for it!! You’re getting into obscene situations that make me angry at the sway money has over things.
Not sure how I missed this thread in the past, but as a 7-year resident of one of these neighborhoods seeing some turnover, here’s a micro analysis of what’s happened so far.
My neighborhood (east edge of Boylan Heights) is a small collection of 22 small houses, most under 1900 sq ft and the only way to expand for most is to go up. Almost all of the houses were either completely rehabbed or built new starting in 2008, with the last current generation “original owners” moving in around summer 2014. The neighborhood saw a baby boom between 2013-2018, with about 10 families adding 1-2 children to their households. As of last week, here are some stats:
One of the smallest houses has sold twice (once for more space to east of Oakwood Dog Park area; once due to something else).
One house has been a rental for seven years. Original owner moved to Atlanta and an international investor purchased as a rental property. Current tenant is trying to purchase.
One house has been a rental for three years because the new spouse didn’t think downtown was safe for the kids. Original owner lives in a big house north of 540 but wants to come back when kids are grown.
Three houses became rentals. One was an interstate move, two other families moved for “more space” to off Tryon Rd (2500 sq ft) and Lake Wheeler area respectively (3100 sq ft). All subsequently sold after about a year or two of being rentals and are currently owner occupied.
Five were sold to move to bigger houses (three of these homes were 1600+ sq ft—the largest houses in the neighborhood). Families now live in Cary (2200 sq ft), North Hills (teardown/rebuild - 6800 sq ft ), North Raleigh (new lux subdivision - 3700 sq ft), University Park (2527 sq ft), and Sunset Hills (2975 sq ft).
Survey says that people apparently need >2000 sq ft for a family of four these days. Also, I think the current selling prices are too tempting for someone to hang onto as a rental, especially if they’re looking for more space. They need their equity for a down payment on that $600k house they’re moving to.
There is one family currently trying to decide between adding on (building up) or moving. They love the neighborhood but need more elbow room in their 1200 sq ft house.
My house is just shy of 1300 sq ft, and we’ve thought about building up. No kids at the moment, but it would be nice to have a tad more room. At current RE prices, we’d still have plenty of equity even after spending a small fortune to add on, but we’re not sure if we can survive living in a construction zone. On the other hand, if we sold, where would we go? Our current location is completely unique and current RE prices for equivalent location are a no-go. We’ve lived downtown for 12 years and in a walkable area of Miami before that, so no burbs for us.
), North Raleigh (new lux subdivision - 3700 sq ft), University Park (2527 sq ft), and Sunset Hills (2975 sq ft).