When planning out your personal real estate investments, the best way to strategize is to follow the industry’s eyes—what region are real estate’s major-player investors looking at for their next opportunity?
Today, the answer is increasingly: North Carolina. With a growing economic landscape, diverse job market, rising home prices and a higher demand for rentals, the Tar Heel State is booming beyond belief, and many young professionals and new families are planning their move into the area.
Let’s explore what this means for real estate investment—particularly for limited partners looking to maximize returns with minimal effort.
2024 real estate: Why North Carolina?
The rent scene in North Carolina is changing rapidly, especially for booming metropolises like Raleigh, Greensboro, and Charlotte. From the state’s optimal climate and stunning scenery to its booming economy and growing availability of jobs in tech and STEM, there are plenty of reasons young professionals are beginning to flock to the Tar Heel State.
Raleigh
The state capital was ranked as the #2 U.S. market to watch when it comes to overall real estate prospects, and is also listed as one of the top-growing metros in the country. This isn’t too surprising, especially when you consider Raleigh’s above-average levels of economic diversity and white collar employment.
As one-third of the “Research Triangle”—a.k.a., the pocket of the country where three world-renowned research universities live—Raleigh is incredibly attractive to scholars, researchers, and professors, which informs the city’s #1 rank in STEM-related U.S. job growth. It’s also known for its easy-going lifestyle and bustling nightlife; couple that with academic opportunity and tons of job openings in STEM and tech, and it’s easy to imagine why more young professionals are moving to Raleigh to start families and/or launch their careers. The city is already home to the likes of major international businesses like Cox Enterprises, CarGurus, and MetLife, and Apple is planning to set up shop at the start of 2026.
Charlotte
Investors have also been flocking to Charlotte, which the real estate industry is starting to consider the next Nashville or Austin in terms of growth and opportunity. Like Raleigh and Greensboro, Charlotte also enjoys a dynamic business landscape and thriving job market—particularly for tech professionals making $100,000 or more. Charlotte’s multifamily market also set record rent growth in 2022, and while the city has expanded exponentially throughout the past few years, there’s still plenty of room for further development.
Greensboro
Another expanding metro in North Carolina is Greensboro: a mecca for national history and modern scientific advancements. The city’s population is growing at an average annual rate of 1.07%, with rental prices climbing by around 2.23% each year. The Greensboro multifamily market has seen $162 million in sales volume throughout the past year, and many of those exceeded the average price of $120,000.
These numbers alone are not as impressive as Raleigh’s or Charlotte’s; however, Greensboro is poised to be the next real estate expansion. Not only is it close in proximity to Raleigh and Charlotte, but the region also has several large companies establishing themselves and growing in the area, like VinFast, Macy’s, and Kroger. Also, while Raleigh and Charlotte both have large populations of high-income earners, Greensboro’s job market tends to feature more blue-collar roles with low-to-middle incomes, which means rental markets are stronger in the region.
Growing economy, diverse jobs, and more people
Beyond Raleigh, Greensboro, and Charlotte, the rest of North Carolina has enjoyed similar economic growth and expansion. The state’s strong economy is bolstered by the fact that it’s home to a number of large corporations, like Bank of America, Duke Energy, and Lowe’s. It’s also the ninth-most populous state in the country. That means tons of job opportunities are consistently on the table, which is highly attractive to renters and buyers alike.
Not only have jobs been readily available in North Carolina for years—these openings are also actively increasing. As of March 2023, the state had 372,000 job openings, a significant jump from the 366,000 the U.S. Bureau of Labor Statistics reported in February of the same year. The top expanding industries were Leisure & Hospitality Services and Education & Health Services, and since people working in these industries are most likely to earn a lower income while having less job security and a higher amount of student debt, they’re more likely to rent multifamily units—at least for the foreseeable future.
While North Carolina has a booming economy and growing job market, it also has a relatively low cost of living, especially when compared to other states on the East Coast. That means investment dollars go a lot farther in the Tar Heel State than they would in other regions, without the risk of desolation and under-population that tend to go hand-in-hand with low-cost areas.
North Carolina real estate: New buildings, rising home prices, higher rental demand
Now that you understand why so many real estate investors are fascinated by North Carolina, let’s explore what these investment opportunities look like—especially if you’re an LP looking to get in on the ground floor.
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Higher demand for rentals
Higher prices sounds great to an investor, but it also poses a risk: if the rent I’m charging continues to soar, won’t leases start breaking left and right?
That could be the case, but not in North Carolina. The state is still experiencing high rental demand due to the influx of new folks, and that will work to keep rental vacancies low.
According to CoStar, a new wave of newly delivered units pushed Charlotte’s
vacancy rate to 11.0%—higher than the national average of 7.4%. On the other hand, Greensboro’s vacancy rate is around 7.4%, and Raleigh’s is at 11.4%.
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Rising home prices
The influx of new residents has majorly boosted North Carolina’s housing market. In turn, this rise in population has led to an increased demand for housing, which means spiked home prices and rents. According to Zillow, North Carolina housing prices have surged by over 70% in the past five years, with rents experiencing similar substantial growth.
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Low inventory levels
Despite the high demand for housing, North Carolina faces regularly-low inventory levels, which has led to a significant increase in home prices and rents. The number of homes listed on the market declined by 13.2% YOY, which means North Carolina remains one of the hottest real estate markets in the country despite sinking prices.
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New construction opportunities
The first thing to pay attention to is building—who’s doing it, and where is it happening?
With the high demand for housing and limited supply, there is a massive opportunity for developers to build new residential and commercial properties in North Carolina. In the last seven years, 650 new subdivisions were approved, adding more than 40,000 new homes to the state.
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Government policies and regulations
A December 2022 study by the Cato Institute revealed a wide gap between North Carolina’s population growth and the rate of new housing construction. In response, real estate experts have called on the state’s government to address restrictive local zoning, which has hindered housing growth.
As a result, new bills have been proposed in the state General Assembly to remedy the issue. While the details are still being worked out, these proposed policies and regulations are expected to have a significant impact on the state’s real estate market, improving housing affordability and catering to the high demand for affordable multifamily units.
Keep learning
From population growth and job diversity to low operational costs and a higher demand for rentals, it’s clear that North Carolina is the state to watch if you’re investing in the 2024 real estate market. To learn more about North Carolina’s allure and understand how Leapfrog Funds works with the state to ensure maximal returns for our investors, reach out today.
Your North Carolina Real Estate Cheat Sheet:
- Average rent prices in Charlotte for one-bedroom: $1,415/month
- Average rent prices in Raleigh for one-bedroom: $1,339/month
- Average rent price in Greensboro for one-bedroom: $1,262/month
- YOY increase (as of November 2023): 3.7%
- North Carolina tax rate: 4.75%
- Is 2024 a buyer or seller’s market in North Carolina? Both! Home prices are rapidly rising in the Tar Heel State, which means sellers can leverage limited supply to ask for higher prices. On the other hand, new builds will compete for buyer attention, meaning you might be able to find a great opportunity to get in on the ground floor of the state’s continued development.
- The next predicted market crash in North Carolina: N/A! Experts don’t predict any crash. Instead the numbers point to a long term sustainable growth.
Continuing the conversation on value-add strategy
Value-add strategies can offer attractive opportunities for real estate funds, especially if you’re an investor looking for a balanced risk level, high-return investment designed to adapt.
To ensure you understand how value-add strategy brings you benefit as an investor, contact us today.
