Editor’s Note: Each Friday, WRAL TechWire takes a deep dive into the Triangle’s real estate markets, including new home sales, why a drop in sales doesn’t always mean a drop in prices, and why Triangle rent prices keep rising, the topics of this week’s reports. WRAL TechWire reporter Jason Parker, the author of the report and a licensed real estate agent in North Carolina, works with journalists from WRAL.com to track and present market data and report on how people are experiencing the region’s changing real estate markets. These special reports will use the category tag “Triangle Real Estate” or “Triangle Real Estate Market.”
RALEIGH – Renting a one-bedroom apartment in either Raleigh or Durham became more expensive, yet again, this month for anyone searching in the Triangle.
That’s according to the latest data from Zumper, which was shared exclusively with WRAL TechWire.
In Durham, the price of a typical one-bedroom apartment rose to $1,350 in the latest month of data.
In Raleigh, a typical one-bedroom apartment is now $1,230.
That’s an increase of 6.3% in Durham and 6% in Raleigh from the prior month.
And there’s no relief in sight.
Rents are stabilizing in many parts of the country, but not the Triangle, said Stephen Butler, the CEO of GoDocs, which provides a platform for commercial loans, in an interview with WRAL TechWire.
“The Triangle is still white hot,” said Butler. “It’s one of the places where rents could increase, rising by as much as 7 to 9%.”
The region is still attracting new residents who are choosing to migrate to the region, he added. And that’s significant for the housing markets as well as rentals since not everyone who is relocating will look to buy a property.
Better paying jobs are adding to the price demand matrix, led by high-tech industries and new high-tech, high-wage jobs, Butler added.
For those making minimum wage, renting a one-bedroom apartment in Raleigh would require working 90 hours per week, a report released earlier this summer found.
More expensive prices weren’t limited to the Triangle, either. All North Carolina cities tracked by Zumper showed an increase in the year-over-year growth rates, including many above the national median rate, which signals continued demand for housing, the spokesperson noted.
“Under supply and strong demand continues to be the main drivers of significantly unaffordable rents in the area,” said Ken Johnson, a real estate economist, in an interview with WRAL TechWire.
Some relief for Triangle rent prices
But there is some slight relief for renters in the area: the typical rental price for a two-bedroom apartment in Raleigh decreased month-over-month, a drop of 1.2%, with the typical price now at $1,600.
Still, that’s an increase of 18.5% year-over-year for the rental price of a two-bedroom apartment in Raleigh. A data set from Zumper shows that the typical monthly rental rate for a two-bedroom apartment in Raleigh during August 2021 was $1,350.
That’s an increase of $250 per month, or $3,000 per year, for the same apartment.
In Durham, the rates of renting increased by 15.6% year-over-year, according to Zumper, with a price change of $220 per month or $2,640 per year. That’s a change of a typical price of $1,410 in August 2021 to $1,630 in August 2022, according to Zumper’s data.
Nationally, rents increased by 9.7%, a spokesperson for Zumper told WRAL TechWire.
What’s driving prices?
Home sale prices remain high, too, although there are some signs that home sales have returned to seasonal, historical, norms.
Housing in the Triangle is in demand, and there’s a shortage of available rental or for-sale residences, said Dr. Gerald Cohen, the chief economist at the Kenan Institute, in an interview with WRAL TechWire this week.
Rising prices are an an indication of an undersupply in housing, Cohen noted, adding that this “suggests that the risks of a significant drop in housing is quite low.”
“Rents in the Triangle look like they are continuing to rise at a double digit rate, though there is some slowing from the blistering pace of late last year and early this year,” Cohen noted.