Appreciation Rates in Raleigh Real Estate Market
An excerpt from an email to one of my real estate investor clients:
What a great question, and one to which I am always happy to respond, because the answer is so amazing – especially in light of the current National trend in the housing market. As you are certainly aware, one of the best indicators of the health of any economy is to look at job growth. In Raleigh, our highly-educated job pool attracts more and more high tech companies looking to rub elbows and capture the opportunities provided when there is a concentration of like companies. And, although these incoming companies are important to our job growth, our current employers are another important resource, as they continue their expansion mode. A recent internet article projects future job growth in Wake County over the next ten years to be 25.57% (Source: bestplaces.net).
The employment cornerstones of Raleigh-Cary and Wake County are (1) Medical Research (2) Technology (3) Government and (4) Education. Because we are not dependent upon any one industry for our economic health, we are able to provide a balanced economic climate for both incoming companies and real estate investors. For instance, in 2000 - 2002 we experienced a significant lay off within our telecommunications industry. Most would have predicted a downturn, however, it did little to the state of our economy and we were able to quickly recover and absorb the added housing inventory without a too much difficulty. And because there were new jobs coming in behind the ones that were lost, we hardly missed a step.
Although the Raleigh market is beginning to feel some of the influence of what is happening Nationally, because the Raleigh real estate market traditionally appreciates at a “slow and steady” pace, any decline that comes our way tends to be correspondingly modest. Over the last 10 years we have experienced appreciation rates of 3% each year from 1998 to 2001; 4% in 2002; 5% in 2003 and 2004; 6% in 2005 and 2006 (Source: TARR Report - Triangle Area Regional Real Estate Report)**. Early predictions during 2007 indicate a 7% appreciation rate in 2007. Although we do not know what the future holds, historically the Raleigh-Cary and Wake County real estate market has always been able to hold its own and should continue to be a viable market for long-term buy and hold real estate investors. I call our area a “Blue Chip” market, and based on past history, a ”Safe Haven.” Fortunately for those of us who work with real estate investors, we are secure when presenting our area for consideration, since we are confident about the strength of our market, our future and the likelihood of continued growth. The Raleigh-Cary and Wake County area provides a strong and stable market for real estate investors.
Please let me know if you have additional questions, as I am always happy to have an opportunity to talk about the Raleigh and Wake County real estate market!
** I use several sources to gather statistical data (News & Observer; Triangle Area Regional Real Estate Report; Multiple Listing Service and several Federal websites. Although the statistics vary from site to site depending on the criterial used, trends from source to source tend to show a similar pattern.)
