Interview: Jim Wiley, President Beacon Street Development

in Raleigh make up 43% of the total occupied housing units in the metropolitan area.

Apartment vacancy declined by 50 basis points year over year in the first quarter of the year to 8.5% and is expected to tighten further through 2021. Combined, class-B and C units recorded even lower vacancy rates of 6.6% but class-A units underperformed in response to the new inventory coming onto the market. Rents in class-A properties reached $1.52 per square foot per month,and real estate financing firm Northmarq estimates rates will reach $1,300 per month by the end of 2021. Northmarq also expects a 7.6% overall vacancy rate at the end of 2021, a 140-basis point tightening compared to the end of 2020.

But despite the rise in prices, studies have shown that apartments across the country are getting larger. According to business intelligence firm Yardi, millennials are getting older and are interested in adding characteristics of a single-family home to their apartments in the run-up to starting families. In fact, single-family rental units grew by 11.1% year over year Jim Wiley

President Beacon Street Development

Is today’s low-interest environment helping your business or creating challenges?

It’s obviously helping people afford more and to lock in for those who want to be in a place for a long time. Generally speaking though, we’re working with empty nesters, with people for whom these are not starter homes. I would say that the impact on our business of low rates is helpful but it’s not been a driver. Most of the people who are moving into our communities are people who have been in their homes for a long time, perhaps living out a bit further, but who now want to live in a walkable area. What you’re seeing with these types is a transfer of their value. The market has made it so that their existing properties are valuable and it’s an ideal time for them to make that transition.

What design trends have you seen emerge over the last year?

Right before the pandemic, we did a partnership with For us it all starts with the right location. We’re trying to go into the absolute best neighborhoods where you already want to live. People still love well-designed traditional homes and so do we. What we have seen change is the flexibility of working from anywhere has allowed people to live where they truly want to live. With all the changes and remote working, the design within the home is shifting, with the need for more nooks and in-between spaces in which to get work done. There’s also much more attention on the neighborhood and outdoor living spaces and that’s a trend with real staying power.

What is your near-term outlook?

I feel very optimistic. Obviously, there is the question of when we’re going to slow down or pull back, but we’re long-form developers. We believe in the area and these are the right neighborhoods and the right type of projects to introduce to the market. We set ourselves up to be patient. If something was to slow us down, we’ll take it at the pace that the market gives us. We’re lucky, though, in that we work with a wonderful buyer profile and well beloved neighborhoods.

in June 2021, the largest increase of all segments. The COVID-19 pandemic has also made people reconsider space requirements, with many now often forgoing large storage space for some kind of office space. Lifestyle apartments and upscale renter communities are also recording a significant demand surge, up by 7.2% year over year.

Construction performance On the construction side of the residential market, activity remains strong in the Raleigh-Durham area, with significant growth over 2020 and 2021. Total construction market volume in 2020 reached $10.8 billion in Raleigh-Durham, with residential accounting for just over half of that activity. In 2021, the total construction market volume in Raleigh-Durham is set to rise to about $11.3 billion, with residential outpacing other sectors with a growth rate of 11.6%.

The main challenges reported by the sector in 2020 and spanning into 2021 were shortages. These shortages extended from labor to raw materials as supply chain complications caused by the pandemic and other issues saw prices shoot up and contractors unable to complete jobs on budget. The situation became so unpredictable that many contractors were forced to shelve projects because giving an accurate advance estimate for material prices was all but impossible, they reported.

Since at least 2011, employment in RaleighDurham’s construction sector has not faltered. In fact, it has continued to climb, reaching over 51,000 workers in 2020, a 1.4% year-over-year increase even as the unemployment rate surged to 6.4% from 3.4%. Employment in the sector continued to grow by 2.1% in 2021, reaching 52,094 jobs. Still, construction firms

In the Raleigh metropolitan area, 43% of occupied homes are rented.