As we reach the final quarter of 2019, it’s time to start taking advantage of some of the top-performing housing markets in the US to ensure you’re making money in 2020. Today, we’ll be looking at the Raleigh real estate market, which was ranked as number 3 in the PwC’s report on the top 2019 markets to watch for overall real estate prospects. How is the Raleigh housing market performing in 2019? Why should you consider becoming a Raleigh real estate investor and buying a property in the city? What are the best neighborhoods to invest in Raleigh real estate? Keep reading to get the answers!
Raleigh Real Estate Market: City-Level Data
Mashvisor’s data confirms that the Raleigh real estate market is one of the top markets in 2019. Here is what you can expect if you purchase an investment property in the Raleigh rental market right now:
- Median Property Price: $410,970
- Price per Square Foot: $368
- Price-to-Rent Ratio: 23
- Rental Income: $1,500
- Cap Rate / Cash on Cash Return: 1.3%
The 4 Reasons to Invest in Raleigh Real Estate
There is much to be said about the average Raleigh investment property, based on Mashvisor’s data. Overall, there are four reasons to invest in Raleigh real estate: profitability, relative affordability, Raleigh’s strong economy, and the high demand for Raleigh real estate investments.
The main reason to invest in the Raleigh real estate market, or any real estate market for that matter, is its profitability. With an average rental income of $1,500, traditional Raleigh investment properties have a high potential of making money. Return on investment in the city is admirable as well. Keep in mind that both the rental income and ROI figures mentioned above are city averages. A real estate investor has a good chance of finding Raleigh houses for sale that will generate higher income and returns.
Property appreciation is another form of profitability Raleigh real estate investors benefit from. According to NeighborhoodScout, Raleigh ranks in the top 30 percent for national appreciation. During the last 12 months, Raleigh’s real estate appreciation rate was 6.07 percent, which was above the national average. The expected rate for 2019 is 3.10 percent, which, like the previous rate, is above the expected national average.
Among the most notable Raleigh real estate market trends is its relative affordability. As seen from Mashvisor’s data, the median price for a Raleigh investment property is $410,970. This is above the national median, which was most recently at $310,400. It’s even above the state median which is $328,916, according to Mashvisor. Despite the Raleigh house price trends, the majority of top-performing neighborhoods in the Raleigh real estate market 2019 are below the city’s median. Of the five best neighborhoods in Raleigh, for instance, three of them are below the city median and are around or below $300,000. Raleigh real estate investments in these areas are relatively more affordable than many investments around the country.
A city’s economy can do wonders for its real estate market. Raleigh fits this mold perfectly, as its traditional long-term properties have benefited from its strong economy. Raleigh’s unemployment rate, for example, is 3.5 percent. This is well below the North Carolina average of 4.1 percent and the US average of 3.9 percent. Job growth is another key feature of the Raleigh real estate market. Over the last year, the city’s job market has increased by 3 percent, which trumps the US average increase of 1.6 percent. Future job growth is positive as well. Over the next ten years, the expected job growth of Raleigh is 44.2 percent, which is higher than the US average of 33.5 percent.
Lastly, the demand for Raleigh real estate investments makes investing in the rental market a lucrative decision. About 48 percent of the city’s residents reside in rental properties. Raleigh has also been ranked as the 11th best city to buy a house, the 13th best city to live in, and the 13th best city to raise a family. This can be great for those investing in single family homes, whether you plan to rent out the investment property or even sell it.
Typically, high demand for properties comes with a hot seller’s market, which is the case with the Raleigh real estate market. Although Raleigh is not a buyer’s market, buying a rental property is more than feasible.
Start looking for a Raleigh investment property right now.
The 5 Best Neighborhoods in Raleigh
So, where should you invest in the Raleigh real estate market? According to Mashvisor, the best neighborhoods in Raleigh are North Central, Northeast Raleigh, East Raleigh, South Central, and Southwest Raleigh.
- Median Property Price: $425,976
- Price per Square Foot: $276
- Price-to-Rent Ratio: 17
- Rental Income: $2,089
- Cap Rate / Cash on Cash Return: 2.2%
- Median Property Price: $257,278
- Price per Square Foot: $128
- Price-to-Rent Ratio: 16
- Rental Income: $1,343
- Cap Rate / Cash on Cash Return: 1.9%
- Median Property Price: $268,418
- Price per Square Foot: $170
- Price-to-Rent Ratio: 18
- Rental Income: $1,252
- Cap Rate / Cash on Cash Return: 1.6%
- Median Property Price: $302,553
- Price per Square Foot: $205
- Price-to-Rent Ratio: 21
- Rental Income: $1,211
- Cap Rate / Cash on Cash Return: 1.4%
- Median Property Price: $421,405
- Price-to-Rent Ratio: 25
- Rental Income: $1,374
- Cap Rate / Cash on Cash Return: 1.2%
What About Airbnb Raleigh?
We’ve talked about traditional investing in this blog, but what about Airbnb Raleigh? Is Airbnb legal in Raleigh? Unfortunately, a recent ordinance was passed, banning the renting of entire properties on Airbnb. Renting out part of a property, however, is legal. For more on the Airbnb regulations in Raleigh for renting units, read this.
All in all, the Raleigh real estate market is one of the top markets in NC and the entire US. To start looking for and analyzing the best Raleigh investment properties in the neighborhood of your choice, click here.