Triangle housing prices are up 24% over last year, according to the real estate brokerage Redfin. ApartmentList.com data shows rental rates aren’t far behind, rising an average of 21% in the last year. In some cases, it’s even more.
“We have seen in some areas the rents are up 33%,” says Maya Galletta, a realtor in Cary.
From buying homes to renting, people in Wake County are paying the price for a thriving Triangle area with a super-competitive housing market.
“I think they had 16 offers in one day and I think it sold for $125,000 over list,” Logan Ferralez told WRAL Investigates about his buying experience.
Earlier this year, Ferralez and his wife thought about moving from their Fuquay-Varina home. They, like many others, felt the frustration.
“I don’t even think they entertained our offer,” he said.
The surge started about a year ago, following Apple’s announcement it was coming to the Triangle. Since then, several other companies have announced plans to bring jobs here.
WRAL Investigates found one major player in the unreal real estate price explosion, investment firms. Galletta knows them well.
“They’re cash offers,” Galletta said. “They can close very quickly. They’re willing to give the sellers basically anything they want and high-due diligence fees.”
WRAL Investigates searched Wake County real estate tax data, register of deeds transactions and the North Carolina Secretary of State’s corporate registration database. In the past year, a large number of home purchases led us to 7500 North Dobson Road in Scottsdale, Arizona.
That’s the home of Progress Residential, a firm that buys then rents primarily single family homes and town homes. Our research found 12 different entities linked to Progress that have purchased nearly 600 homes the past year, mostly in the $200,000 to $350,000 range. That includes a recent purchase of more than 40 new town homes in Wendell. The year prior, those same companies only bought about 100 properties here.
“From what I’m hearing, these are very long-term holds for them, so these are 10- to 15-year holds, so these properties are not coming back on the market anytime soon,” Galletta said.
It’s ideal inventory for first-time or lower-income buyers. Now, they’re gone.
“This is a really complicated issue,” says Wake County Commissioner Matt Calabria.
Calabria helping lead the charge for more affordable housing in the county. He says these bulk purchasers of homes aren’t helping.
“The short-term concern is large term corporate purchases artificially soak up the housing supply and by outbidding buyers they tend to drive prices up,” Calabria said.
The investors aren’t doing anything illegal. On one hand, they’re helping fill a rental void in Raleigh, but they’re also making owning or renting a home much more expensive. Calabria feels it’s something Wake County leaders really need to examine.
“This particular issue involving corporate ownership, or I should say outside corporate ownership of properties, has been something that we’ve begun to talk about,” Calabria said.
As for Ferralez, he decided the market was too crazy and chose to upgrade his home instead of moving. He hopes something can be done to help people, not companies, buy a home of their own.
They’ve got the capital to provide all cash offers, 14-day close, lot of regular home buyers don’t have that,” he said. “It’s not a level playing field.”
Galletta says many of the buy-to-rent firms pay over asking price for homes, which is something she believes renters eventually pay for.
“That has a lot to do with the fact that they’re buying these properties for higher values and they’re having to raise the rents to cover their investment,” Galletta said.
Raising rent in the Raleigh area and creating a domino effect on sales prices are impacting the American dream of owning a home. Galletta says it’s not right.
“To take away single family homes from people that should be able to purchase them, right, for themselves, for their families to live in… stinks,” Galletta said.
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