Charlotte, NC has emerged as one of the hottest real estate markets in the country; they have recently been crowned the best real estate market in the southeastern United States set for growth in 2021, and they are no doubt living up to this expectation thus far. Because we’ve worked with a multitude of borrowers based in Charlotte, we are excited to see how this market continues to evolve as we fund more projects in this booming city.
Cities all over the country faced many challenges this past year due to the effects of COVID, and the rate of economic and public health recovery has widely varied across the country. According to analysts at Western Carolina University, Charlotte is among the top cities in North Carolina positioned for sustainable and long-term economic recovery. If we dive deeper into the economic recovery of North Carolina, we can see that current unemployment rates sit around 6.1%, down from the April 2020 high of 12.9%. UNC Charlotte’s annual economic report states that North Carolina is expected to recover 99.8% of jobs lost due to COVID, and they expect to see rapid and unprecedented economic growth. These stats indicate that Charlotte is on the way to a remarkable economic recovery, and the real estate market is likely to follow this positive trend.
Source: Y Charts
Charlotte has long been a hub for Fortune 500 companies and other big names in technology and banking. Hosting seven Fortune 500 companies and the country’s second largest banking center after Wall Street, it is no surprise that the job market boasts a diverse blend of technology, white collar, and service jobs that work together to create a thriving economy. Bank of America and Wells Fargo are some of the top companies in Charlotte, employing over 40,000 employees locally. The technology sector has seen particular growth with a 30% increase in tech jobs since 2013, which is twice the national average. The biotech company Hydromer has been a recent addition to the lineup, stating they chose the city because of its “stature as an international business hub, competitive business climate and North Carolina's consistent ranking in the upper echelon of business-friendly states”.
Ranked number six in the nation for best cities to start a business, Charlotte is increasingly attracting startup talent that promotes a culture of innovation and exciting new technologies for the city. Some of the most notable startups based in Charlotte include SmartSky Networks, Blockchain CLT, and Passport. Passport, a transportation software company, recently raised $90 million to further pursue growth and development. While the thriving startup environment in Charlotte is relatively young, the city's continued growth and friendly business environment aims to prove they can be a top city for startups in the future.
To best understand the current business and real estate landscape, it is helpful to identify some up-and-coming demographic trends. To start, the city has been hailed as a “millennial hub” in recent years. In 2020, Charlotte ranked number 5 for cities in the U.S with the highest amount of millennial net migration. The average age in Charlotte is 34 compared to the state's 38.7; this young population sits in the prime age group for real estate investors targeted towards renters. Charlotte has also been seeing a steady increase in overall population, with a nearly 20% increase in population since last July.
In the education sector, UNC Charlotte has recently reported that they are meeting or exceeding all of their five year goals. This includes a nearly 10% increase in graduation rate and over $52M raised towards research and development. These factors culminate into a younger, more educated, and higher income demographic steadily increasing in Charlotte.
Source: UNC Charlotte
The combination of rapid recovery and growth as well as the increase in the younger and highly educated population has Charlotte set for a thriving real estate market. It is ranked as one of the best real estate markets in 2021, and the Home Buyers Institute reports that the market will remain competitive in 2021, boasting strong demand and a more limited supply that will bring up the prices of homes. All signs point to this creating a sellers market, meaning there could be a great opportunity for investors to leverage this overwhelming demand for homes.
The average sales price in the Charlotte area for 2021 is $287,022, a year-to-year appreciation of 11.9%. Even so, these numbers still place Charlotte as an incredibly affordable city to live compared to other second tier cities such as Austin, TX ($521,000) and Denver, CO ($517,000). With affordable living and a swiftly recovering economy, it is no surprise Charlotte was ranked in the 2020-2021 top 10 best places to live by U.S News and World Report.
Multiple up and coming Charlotte neighborhoods present attractive opportunities for investors. Two of these notable towns are NoDa and Plaza Midwood. NoDa is a newly revitalized town that is now growing as a hub for arts and entertainment, and with high affordability, the number of young people moving here continues to grow. Plaza Midwood has a slightly higher entry point, but the interest for living in this neighborhood can't be overstated. Full of restaurants, entertainment, and direct access to public transport, the demand for this town is steadily increasing alongside home values. These two towns, along with multiple others in the city, show promising growth and demonstrate the exciting opportunities investors see in Charlotte.
Central Avenue, Plaza Midwood
We believe the future of Charlotte is looking bright; an incredible economic recovery after COVID, job market growth, and an influx of millennials set this city up for long-term success. Check out our current investment opportunities available in Charlotte below!
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