News of a 94.1% effective vaccine from Moderna seeking emergency FDA approval for use against COVID-19 has put the taste of hope in even the most sour mouth. With this news potentially returning us towards something resembling “normal” and bringing some future predictions into focus, we can’t ignore the ways this past year has changed human society, just as we can’t ignore how a vaccine will impact the future. When it comes to housing, many such futurists are predicting a somewhat comforting trend: folks’ taste in their living situation is unlikely to shift too dramatically in the near future.
The Road So Far
For a more detailed exploration of how and why the pandemic has changed the way humans relate to the space they live in, both shared and individual, please take a few minutes to read through Digesting Architecture and A Suburban Renaissance so I don't repeat myself and bore you too much. In short, ever since the concept of a deadly miasma (i.e. tuberculosis in the late 19th century) returned to the public consciousness as COVID-19 spread, people have, in record numbers, sought housing with more privacy, fewer collective spaces, and increased ability to sequester themselves from the public. This “Great Reshuffling” is so significant that, in the Triangle alone, a record 85% of detached suburban housing listed for re-sale in Q3 of this year sold within the quarter. 77% of those homes sold in fewer than 30 days.
These figures are record-breaking in a lot of ways. Detached housing (“detached” in this context meaning a property that is not in direct physical contact with another, i.e single-family homes) is so highly valued that most available inventory is selling almost immediately once listed. This time last year, approximately 45% of homes listed in Wake County sold within the calendar month they were listed for sale; this year, approximately 90% sold within their same month. Single-family housing offers privacy, an ability to quarantine your family, and run both school and work from the same building. It’s unlikely we’ll see the importance of these things diminish anytime soon.
Money Money Money Money
On the 17th of November, CNN’s Julia Buckley published the report World’s most expensive cities to live in during Covid. She listed the top 10 as:
What do all these cities have in common? They are highly metropolitan with staggeringly dense populations and a very high cost for a “basket of 138 everyday items,” as Buckley measured. In the middle of a viral pandemic, these cities have the highest cost of living on the planet in tandem with a lot of people stacked on top of each other, essentially pushing their residents into one giant “superspreader” event all day, every day.
The good news for you, dear North Carolina resident, is that the Raleigh-Durham area has been relatively well isolated from these economic impacts. We also do not share the characteristics of these cities that make them so unpalatable. It’s rare that any of my posts have good news, I know, but bear with me.
Just as Raleigh-Durham withstood the Great Recession in 2008 well compared to the rest of the nation, we are weathering the economic impacts of COVID-19 relatively well. When the rest of the country is struggling to make mortgage payments, many of our residents are taking advantage of current mortgage rates & home prices to sell their home and upgrade to something better for the kids to log in to school from. Our downtown residents have, in large part, had the ability to move out from their cramped living quarters and retreat to a safer, more socially distanced residence. Cost of living is not so exorbitant that it prevented people from taking action to protect themselves when it became clear that downtown, crowded living was no longer safe.
Not only have we been poised to weather the economic storm well, but we are also predicted to keep our stability through the end of 2020 and into 2021. The tailwinds fueling folks’ preference and appetite for detached housing are not going anywhere; people from more expensive and congested areas like NYC and LA still need somewhere safe and affordable to go. Out of state buyers will still make up a significant portion of all market participants. In-state buyers with high borrowing power will still be searching for their ideal pandemic property, fueling the market with their sale of current and subsequent purchase of new property.
Anyone who has lived here for more than a few years knows that Raleigh-Durham is an attractive area to move. You need only measure the increasing traffic density on I-440 to confirm. As long as the airport flies, RTP needs workers, and Raleigh/Durham still offer great amenities and entertainment for residents, there are going to be transplants moving in. This bodes well for the Triangle’s economy, jobs market, and real estate alike! As always, I look forward to watching how this data shakes out over the next few months. I hope to soon be reporting that the Triangle maintains its affordability in tandem with the high quality of life and relative safety we now enjoy.