When I earned my real estate license in October 2019, I went into this business not really knowing what the day-to-day of a real estate agent looked like. I saw a few friends who had real estate licenses posting on social media about showings on beautiful, sunny days, the excitement of writing offers, etc., but what they did on a daily, mundane basis I had no idea.
I knew I didn’t want to be a “churn & burn” agent who, in overly simplified terms, works in quantity over quality. They know just enough about the market to price accurately and move a lot of inventory. Nor did I want to turn into a data-mining recluse who scared people off with too many numbers and not enough people skills. They warned us about both ends of the spectrum in new agent training.
I had just under 4 months in real estate before COVID-19 came in and upended everything. The more experienced agents I was working with took the changes much harder than I did - the established models of practice they were comfortable with had been changed, but I wasn’t even comfortable enough with those models yet to be upset when they were taken away.
In the immediate aftermath of the pandemic’s beginning, I found myself staring at a lot of maps. Raleigh and Durham are my primary areas of operation, so I watched those cities like a hawk to see what new trends were emerging as the “Great Reshuffling” of 2020 began. Checking my MLS for recent activity became as habitual as checking Instagram in the morning; I wanted to see where homes were selling quickly, which areas were increasing in price and popularity, and which areas were being deserted.
Now, just after COVID-19’s birthday, what was at first thought to be temporary trends in housing desirability are the new normal. Residents want pandemic-friendly housing with space both inside and outside the home for every member of the family to learn, work, and/or play. The best places to live in Raleigh now are not what they were before 2020. These supposedly temporary trends have become permanent.
I-540 is the New Beltline
Ever since I was a kid growing up in Apex, I-440, aka the Beltline, was the major highway everyone took when they needed to go somewhere important. As the belt surrounding downtown Raleigh, it denoted where the white flight suburbs on the outside of the loop ended and soon-to-be-gentrified urban Raleigh began. Which side of the Beltline you lived on was illustrative of what type of housing you lived in, what community amenities you had at your disposal, quality of your schools, and more.
When I-540, another concentric circle of highway, was built, living near 540 became the new hot places to be (unless you lived near the toll section; people were pissed about that). New home construction near the road popped up in droves; whether it was the luxury townhomes of 540 Townes or single-family White Oak Estates, people wanted to live near this new piece of infrastructure. As it was then, living near a major highway that encircles Raleigh and its surrounding cities is still a huge priority for many current buyers.
At the time, we called anything within the circle of 440 “inside the beltline.” Fonville Morisey even has an “ITB” office. Gentrification abounds. ITB was the place to be if you wanted the best of both worlds: prosperous Southern urban living funded by RTP, and a lively downtown scene with young professionals shelling out double digits for a cocktail at the upscale bar & restaurant within the shortest walking distance from their remodeled home.
When the pandemic began, ITB lost its sparkle almost instantly. Living in a tiny apartment, congested townhome community, or historic neighborhood/street within walking distance to all of downtown’s amenities lost its appeal as soon as we lost those downtown amenities. News outlets across the country reported on the mass exoduses from downtown areas by those with the means to do so; people were afraid to live so closely stacked atop each other while a virus whose contagion relied on humans living atop each other was making the rounds. U-Haul truck rentals went up while apartment occupancy went down.
One year on, we can see where all those people wanted to settle. They wanted to move somewhere that would allow them the best of both worlds: nearby public amenities, like shopping centers, parks, schools, and hospitals, but also have sufficient space and privacy that they didn’t feel constantly exposed to contagion. Suburban townhomes and single-family homes became the best thing since sliced bread and the ballpoint pen. Whereas ITB homes used to hold that moniker, the desirability those homes used to boast has been shifted to homes in between 440 and 540. Any further north and you run the risk of losing easy highway access to Raleigh. I-540 is the new marker for where the best housing lies.
The reason this metaphor is of a donut and not, say, a biscuit, is because homes in the very core of the ITB region - downtown Raleigh - have become expressly undesirable. There are no single family or town homes in the downtown area that offer the same peace of mind and elbow room as the cake of the donut between 440 and 540. When defining the geographic region in and around the city of Raleigh in which people have flocked by the thousands, we have to punch a hole in the middle to represent from where they all left, as shown in this map:
This map is a screenshot from the Triangle Multiple Listing Service (TMLS) representing a saved geographic search for available housing within this area. I check this search weekly to keep an eye on inventory levels. In addition to the geographic restriction, the search is also limited to single-family and townhome listings.
As of today, 29 March, there are a total of 227 Active or Coming Soon listings in the donut, with 1,649 closings in the last 90 days for an average of 18 home sales a day. If we look as far back as the approximate start of the pandemic, 15 March 2020, total closed sales amount to 9,516. That’s an overall average of 26 closings a day for this area.
For reference, if we expand to include all of Raleigh and its surrounding suburban cities, not just the donut, there have been a total of 23,088 closings since 15 March 2020. This is an average of 63 closings a day.
What Does This Mean for You?
In short, this means that you now have a visual representation of the physical location of the hottest housing market Raleigh has seen in a very long time. Durham residents: don’t worry. You have a donut too, and I will be mapping it. Real estate brokers across the Triangle all have stories about how limited supply and increased demand have frustrated their buyers and delighted** their sellers.
You can also use this data to enjoy the benefits of market awareness. If you already live within the donut, take a look around your subdivision and see what price other homes near you have listed and sold for. A home in my partner’s neighborhood recently sold for $400,000 after listing at $360,000. All depending on your location and condition of your home, of course, but you may be pleasantly surprised by your home’s new market value.
If you want to move inside the donut, I wish you the best of luck. If you need an agent to help you do it, I know who you should call :). 17% of home purchases in the Triangle were financed as all cash in January & February of 2021; the highest percentage I’ve seen since October 2019. Many of my first-time (read: financed) home buyers have experienced disappointment after disappointment because the homes they offer to purchase are snatched up by an all-cash, quick-close buyer. The lack of a lender, whose reputation precedes them as a persnickety and mercurial bunch, helps these cash buyers win out almost every time.
It is possible to relocate within the donut with a mortgage. Don’t let my attempts to temper expectations completely turn you off from trying to purchase. If you speak with anyone who’s been involved in a real estate transaction in the last decade or so, be it as an agent or a consumer, they can tell you that today’s buyers have to have a thicker skin than yesterday’s buyers (that is, those who purchased before the pandemic). Brace yourself for the intensity of multiple offer situations, and try to keep from falling in love with “the one” before you get under contract and are into your due diligence period.
If you are considering participating as a real estate consumer (buyer or seller), it would behoove you to keep an eye on the donut to know where you can afford to buy and/or how much you should expect to sell for. If you are a real estate professional, it would behoove you to be aware of the donut so you can appropriately guide and coach your clients through the intricacies, stressful moments, and minutiae of doing business in this kind of heated market. Regardless of the degree of your involvement in Raleigh real estate, it will behoove you to be aware of the Raleigh Donut. It is not going anywhere anytime soon.
**Not every seller has been delighted since selling in the pandemic. Limited supply has not pushed us to the point where any house can be sold in any condition for a high price. Those who banked on selling at A+ price while in B- condition are, in fact, the opposite of delighted with how their sale went.
Jessica Mohr is a licensed real estate broker working in her hometown of Raleigh, North Carolina.