Interview: Marti Hampton, Owner

( ) remained low in the first quarter of the year at 7.3% and 8.9%, respectively. Net absorption outpaced net deliveries but the figures show that inventory units have continued to increase in both markets. During 1Q21, about 53,000 units were on inventory in Durham and 107,000 in Raleigh. But units under construction in both markets fell, which is what is largely causing bottlenecks and significant price surges. As of the first quarter, Raleigh had just over 4,600 units under construction, compared with almost 6,000 in the first quarter of 2020. Likewise, Durham’s 1,712 units under construction mark an almost 40% year-over-year dip. There could be some respite ahead, however. New home construction permits in Raleigh have increased by 39% and mortgage originations are expected to grow by 16% in 2021.

Build-to-rent real estate developer Cortland has been one of the most active buyers in both Raleigh and Durham, having purchased almost $216 million in properties. Blackstone has purchased about $170 million in Raleigh alone, with one larger acquisition being the $110 million Park & Market apartments in North Hills. Magma Equities, a California based real estate developer notably purchased hundreds of Durham apartments for $80 million. The University Apartments complex near Duke University is just the latest in an acquisition spree by the firm and marks its 12th purchase in the Triangle since 2019. And another student housing complex, Stanhope Student Apartments, sold this month to developer Core Spaces for $131 million. Nine apartment deals exceeded $65 million during 2020.

Multifamily properties remain a top target for investors. In the fourth quarter of 2020, the average price per unit was $187,000, up over 14% on the year. Occupancy reached 95.1% during the quarter but rents per square foot remained flat, according to Avison Young.

But is all of this sustainable? Despite the rate for a 30-year mortgage reaching historic lows of below 3%, average monthly mortgage payments in the Triangle have ballooned to $1,714 in 2021, up from $1,535 in 2020 and $1,617 in 2019. The region is one of the metros facing the biggest housing shortage, according to data from DeedClaim – short around 1,335 units. And according to ATTOM, single-family homes and condos are less affordable than historical averages across the country. More data from ATTOM showed that, although foreclosure filings are down 61% on the year and 78% since 2019, there are about 1.7 million mortgage holders with delinquent loans 90 or more days past due. The expiration of the foreclosure moratorium this month is likely to exacerbate the situation.

With some buyers who purchased properties ( ) Marti Hampton

Owner & Broker Marti Hampton Real Estate

Do you think market prices and double-digit growth will stabilize or come down soon?

I don’t see any immediate stabilization for the market because this is all about supply and demand. During the last big uptake in 2006 and then following the Great Recession, there was a much different scenario than we have now. Back then, the requirements to get a home loan were low. We don’t have that same scenario now. What we have is high demand for homes and a rise in people relocating to decrease their cost of living. With the onset of COVID-19, remote jobs became the new normal and people took advantage of the ability to live where they wanted to, not out of necessity to be close to their offices. With low interest rates and job flexibility, people are making the move regardless of price.

How does technology continue to influence the homebuying or selling process?

Technology will continue to shift the real estate market. With low inventory and many buyers eager to secure a home, we’ve seen a shift of sight-unseen offers from around the United States. People are shopping online well before the home hits the market.

What is your competitive advantage versus some of your peers?

Our competitive advantage is our 30-plus years of experience, and I don’t think many people understand that. Experience is important when it comes to recommending a home seller a price or a buyer on their bids. The only way you can approach that is by researching to understand the neighborhood, helping clients look at the numbers to decide whether this is a sound investment or not. We have been the No. 1 seller of resale homes in this market for six years. We’ve seen and been through pretty much every possible scenario out there. In a fast-moving market, experience is what you want on your side to secure both a winning bid and top dollar for their home.