No two real estate markets are created equal. Some boast a low cost of living, some a diversified job market, some a lively entertainment scene, and some manage to encompass all the above. Obviously, each market has its weak points, too. Perhaps there aren’t many good schools in the area, or the crime rate is on the rise. Even the weather conditions can be a turn-off.
The U.S. real estate scene differs from market to market. Wishing to capture the specifics of various regions across the country, we launched our Expert Insights series. We conducted a set of Q&A interviews with real estate professionals, and now we present a few insights regarding a selection of real estate markets.
Raleigh’s Market, Strong and Steady
For this episode, we head over to Raleigh, North Carolina’s capital. Part of the Research Triangle, the place they call the City of Oaks is a center for high-tech and biotech research. Due to its accelerated growth in the past years, Raleigh has become one of the best places to live. Personal finance website WalletHub awarded the city sixth position on its 2018 list of the best state capitals to live in. Wishing to have a more in-depth understanding of Raleigh’s real estate market, we reached out to Jennifer Spencer, CEO of Spencer Properties.
Born and raised in North Raleigh, she has been in the real estate business for over 21 years. Spencer started working as a commercial insurance broker straight out of university and founded Spencer Properties in 1997. In today’s interview, she reveals a few insights about her home town’s market.
Q: How did you end up working in this field and what drew you to it?
A: I started as an investor buying rental houses, first for myself, then, when the interstate ran through our family farm, I helped my grandparents do a 1031 tax-free exchange to avoid paying capital gains on their property. I started helping other investors get into real estate and, before I knew it, I had a full-blown real estate brokerage firm.
Q: What does it take to be a successful broker in this highly competitive market?
A: 1. Focus on sales/lead generation. 2. Focus on nurturing relationships. 3. Focus on profitability.
Q: Describe your most challenging project so far. How did you deal with it?
A: Getting a parcel of land rezoned in an anti-growth political environment. I dealt with it by meeting with many people who are highly experienced in dealing with this situation and by seeking their advice and help.
Q: Are there any investment/development clusters/submarkets in Raleigh right now? Where is development focused and why?
A: The area of Raleigh where the proposed I-540 will be built (Apex/Holly Springs/Fuquay Varina) is a great one to invest in now. We will likely see rapid appreciation there, once the interstate is complete.
Q: In your opinion, what are some of the strengths of the Raleigh real estate market, and what are the challenges? How do you deal with them?
A: 68 people per day move to Wake County. This area is thriving due to job opportunities, a relatively low cost of living, great universities and schools, excellent health care, flight accessibility, beaches and mountains, and beautiful weather. The real estate market is very strong. There is a lot of demand for homes, but this presents challenges for buyers and their agents trying to find properties—particularly for first time home buyers, who are not buying a home with cash, as is. We have a powerful strategy for buyers to lock down a home in this competitive market. We also have a proven plan to ensure sellers get top dollar for their homes in this market.
Q: How do you think the Raleigh commercial real estate market is faring compared to other bigger/more established markets?
A: Our homes are appreciating at 8-9% per year on average. Other markets are seeing double-digit appreciation, which is indicative of a bubble and a bit concerning. Our market is strong and STABLE.
Q: Which do you think is the most promising sector or niche in real estate right now? (office, multifamily, industrial, retail, etc)?
A: Senior housing.
Q: Where do you think the Raleigh real estate market is heading in 2018? Are there any major/exciting developments scheduled for delivery this year?
A: Continued growth in real estate values and low inventory. The new train depot downtown.