RALEIGH – Nearly 34,500 homes in North Carolina are vacant, according to a new report from ATTOM Data Solutions that tracks foreclosures, pre-foreclosures, and vacancies nationwide.  And 80% of those, or four in every five properties, are owned by an investor, the report says.

Some 1.1% of the nearly 3,490,000 residential properties in the state are vacant.  That’s 34,999 homes.  And the data set indicates that 30,802 of those homes are investor-owned.  ATTOM tracks that in total, 1,166,216 of the state’s residential properties are owned by investors.  So, the vacancy rate for investor-owned homes is 2.64%, 2.4 times higher than the overall vacancy rate.

The report brings more attention to housing challenges in the state – lack of homes and rising prices.

An executive at the North Carolina Budget & Tax Center said earlier this year that the state is facing a shortage of 900,000 additional housing units by 2030.  And an economist and professor at the University of North Carolina at Charlotte said last month that anyone considering purchasing a home in North Carolina should do it soon, as costs will continue to increase.

“The median home value nationwide went up just 3 percent from the third quarter of last year to the first quarter of this year and home-seller profits have ticked down in 2022,” a statement from ATTOM Data Solutions reads.  “At the same time, investment returns for speculators who flip properties have hit their lowest point since 2008.”

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Triangle real estate still hot

But investors in the Triangle still want to buy your house to flip it, the process of buying a house, renovating it, and then reselling it to a new buyer, WRAL TechWire reported earlier this year.  These types of homes are vacant while owned by the home flipper.

Other vacant homes include those owned by instant buyers, or iBuyers, like Opendoor, Offerpad, or RedfinNow, and some homes now owned by some institutional investors who have not yet placed a renter in the home.

Other homes that are not owned by investors are vacant, including some in foreclosure proceedings or in pre-foreclosure, according to ATTOM.

However, Charlotte and Raleigh’s housing markets show low overall vacancy rates, particularly for homes not owned by investors, ATTOM adds.

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Raleigh, Wake County, have lowest vacancy rates

The region of the state with the lowest residential vacancy rate is the Raleigh metropolitan statistical area, where there is just a 0.44% vacancy rate, with 1,964 homes sitting vacant at the time the data was gathered of the 442,040 residential properties in the region.

Wake County’s vacancy rate is even smaller, at 0.41%, with 1,527 vacant homes of the 370,003 residential properties tracked in the data set.

Of those properties, 1,116 homes, or 73% of all vacancies, are designated as “vacant investment properties” in the ATTOM data set.  And among investor-owned properties, of which there are 67,288 in Wake County, the vacancy rate is 1.66%, or slightly more than four times the overall vacancy rate in the region.

While foreclosures are up 182% in Wake County, Raleigh homes have added an estimated $50 billion in value since the onset of the pandemic, and more than half of owners who have a mortgage on their property are now considered equity-rich.  That means for owners of properties that they’ve vacated, they may have a “relatively soft landing” if their home enters foreclosure, according to Rick Sharga, executive vice president of market intelligence at ATTOM.

Durham County has 91,507 residential properties, according to the ATTOM data set, and 20,927 are investor-owned.  While there are a total of 1,194 vacancies in the county, 878 of those are owned by investors.  The vacancy rate in investor-owned homes in Durham County is 4.2% compared to the overall vacancy rate of 1.3% of all properties.

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Charlotte has the most vacant residential properties

Nearly 7,100 of the state’s vacant properties are in Charlotte’s metropolitan statistical area, 5,276 of which are owned by an investor, according to the data set.

Despite that number, the vacancy rate for residential property in Charlotte is among the best in the state, at 0.84% and by one measure, is among the best in the country.  That’s a measure of the lowest rates of vacant properties in counties where there are at least 500 pre-foreclosure proceedings—in Mecklenburg County, that rate is 0.5%, fourth best in the country.

But when it comes to investor-owned properties, the vacancy rate is 2.5% in the region, nearly three times the overall vacancy rate, according to the data set.  That’s in the MSA.  In Mecklenburg County, there are 79,366 investor-owned properties of the 335,047 total residential properties in the county, and 1,461 investor-owned properties are vacant in the county, a vacancy rate of 1.84%.

Foreclosures are up 182% in Wake, but high equity and high demand mean most of those at risk will sell, not lose homes entirely