This is the fourth installment in Inman’s “12 in ’21” hot neighborhoods series, which explores areas with both booming real estate markets and dense amenities. To read previous stories in the series, click here.
As booming home price growth pushed buyers out of coastal hubs like New York City, San Francisco, Seattle and San Diego, an emerging class of vibrant and affordable secondary cities began capturing the hearts (and pockets) of young professionals looking for a place to call home.
These secondary cities are mostly dotted across the South and Midwest; however, there’s a standout city on the East Coast that provides a perfect mix of southern hospitality matched with the hustle and innovation of its northern neighbors.
Raleigh, North Carolina, which is often paired with nearby Durham and Chapel Hill to form “The Triangle,” has been a mainstay on lists for the nation’s top secondary cities and places poised to experience robust growth over the next decade.
“We just continue to see Raleigh at the top of the lists of where all the cool kids are moving to,” Dash Carolina agent Quentin Dane told Inman. “What I’ve seen since I’ve been here is I’ve seen a net inflow of [more than 60] people a day and the city is expected to double in size in the next 15 years.”
“It’s overwhelming. It kind of has that Austin sort of story,” he added. “It’s like, ‘[Where is] Raleigh?’ and then all of a sudden, everybody knows [where] Raleigh is.”
Dane, alongside six other brokers and agents who were interviewed for this story, struggled to pinpoint a single neighborhood since buyers are snapping up listings all over the city before they can officially hit the market. However, most agreed there’s one spot that shines a little bit brighter than the rest: North Hills.
“Midtown North Hills area captures everything about our market,” RE/MAX United broker John Wood said. “I grew up in what they now call Midtown, but was called North Hills back in the ’60s and ’70s. It’s wild to watch it transition.”
What is North Hills?
North Hills is in the heart of Midtown Raleigh, the newly-minted name for four neighborhoods nestled between the I-440 Beltline and I-540 Outer Loop. North Hills, Crabtree Valley, Cameron Village and Five Points were once considered North Raleigh, a WRAL report explained, but four decades of expansion have pushed them to become the city center.
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The latest U.S. Census Bureau data revealed Midtown Raleigh is a place for up-and-coming young professionals, as the average resident is 38 years old and lives in a household that pulls in $62,536 per year. Midtown Raleigh has 33,575 residents and only covers 11.2 square miles, making it one of Raleigh’s smaller districts.
Between the four neighborhoods that comprise Midtown, Dane said North Hills is the smallest, with it being no more than a 30-by-30 block square. However, North Hills packs a punch — it’s home to Raleigh’s most notable luxury hotels, offers nearly 150 shopping and entertainment options, and is the site of developer John Kane’s upcoming $1 billion Innovation District.
“They’ve created a huge destination there,” Raleigh agent and residential developer AJ Stillittano said of Kane’s North Hills projects. “[Midtown] Raleigh was always a good location, but there was just the old depressed mall from 20 years ago that no one really paid attention to. Now there are 15-story buildings and apartment complexes, plazas, an outdoor mall and tons of restaurants,” he added. “Then the growth from a residential perspective started creeping up.”
North Hills real estate
Keller Williams Realty Platinum team leader Alyssa Hellman said Raleigh’s home price growth was booming before the pandemic, but low mortgage rates and a shift to remote working have ignited buyers within Raleigh and have provided some out-of-state competition as well.
“It’s going to go above list price, which I’m sure you’ve heard from everybody,” Hellman said. “Basically when we have a conversation with a buyer and when we look at their budget, we’re pointing out to them, ‘Hey, when you’re looking at houses, you should be looking at houses no more than $5,000 or $10,000 below the top end of your budget.'”
Zillow, Redfin and realtor.com’s February annual home price growth projections for Raleigh range between 6.8 percent and 11.1 percent with the median listing price hovering around $300,000. Realtor.com even dubbed Raleigh as a solid buyer’s market with plenty of inventory.
However, Hellman and other agents on the ground shared a different story, with each of them saying bidding wars have become the norm as inventory dropped to dangerously low levels. Hellman said the rush of buyers has changed the name of the game, with cash on hand now being necessary to even have the chance of nabbing a dream home.
“In Raleigh, we have something called due diligence, which in a lot of areas of the country is referred to more as like hard, earnest money,” she explained. “That’s given upfront when they write the contract and is nonrefundable,” she added while emphasizing buyers are doing this for homes they could very well lose out on.
Zillow shows 54 available listings in Midtown-North Hills, including a 36-year-old townhome for $340,000, a 14-year-old condo for $410,000, a quaint ranch-style home for $599,900, and a handful of modern mansions busting the $1 million mark. Meanwhile, Redfin shows 41 available listings, with the majority sporting a “hot home” or “coming soon” badge.
However, Dane said those homes won’t linger on the market for long as his latest comparative market analysis for Midtown, Raleigh, revealed there are less than 10 days of inventory, which means getting into North Hills is a gargantuan feat for first-time and more experienced buyers alike.
“What’s beautiful about North Hills is that acre lots really are the norm, but then you can a half-acre lot and you could literally walk four blocks and be at 30-story high rise,” he said of why buyers are clamoring to get there. “You normally get that in the city, [where] you get this ability to have the convenience of getting to everything you want.”
“Raleigh is kind of unique, where you’re not going to see as much as wide a variety of styles as you do in some other markets,” Hellman added. “It’s a lot of very similar Craftsman-style homes; however, there are some gorgeous historic homes in the Midtown area that give you kind of that old-school charm while still being updated and having a chic look to them.”
Wood said the perfect mix of amenities has pushed home prices in North Hills up exponentially over the past year. Before the pandemic, he said, a buyer could find a fixer-upper for $300,000. Now, the low-end of North Hills prices are at $450,000 to $500,000 with some homes going for as much as $1 million.
“Prices are clearly going up here and everywhere else,” he explained. “The driving up of the prices in [North Hills] are not only market conditions, but because of the amount of new construction that’s occurring.”
“The new construction prices are obviously jumping much higher than [existing homes] and that’s pulling the resale prices up,” he added while noting buyers are buying homes just to tear it down and build a newer one.
North Hills rents
Just like buyers, renters in Midtown-North Hills are dealing with a price crunch and lack of available rentals.
According to Trulia, there are only 10 homes available for rent in North Hills, with the cheapest rental being $1,745 per month and the most expensive rental clocking in at $3,500.
Renters looking to live in one of the area’s newly-built luxury apartments can expect to shell out a similar amount with the average studio ($1,333), one-bedroom ($1,560) and two-bedroom ($2,105) costing four figures per month.
Stillittano said renters, like buyers, are willing to pay extra to live near a plethora of amenities and be right around the corner from Kane’s billion-dollar development that will undoubtedly bring job opportunities for the young professionals that are flocking to North Hills.
“Kane’s got massive projects going on in our area and it’s kind of hard to put all in perspective,” he said. “It’s not like one little plaza — there’s an apartment complex, a condo complex, grocery stores, and then all this shopping, breweries and restaurants.”
“It’s where people want to be,” he added.
North Hills amenities
As noted before, North Hills and Midtown Raleigh have plenty of amenities that include a wealth of restaurants, music venues, shopping opportunities, and much more. However, everyone’s attention is on developer John Kane’s upcoming Innovation District, which will be in the heart of North Hills.
On Kane’s website, he describes the North Hills Innovation District as “bringing together private innovation in technology, life sciences and entrepreneurship with meaningfully scaled public open space.” The 33-acre development will be built in three stages, with the first stage — a luxury apartment complex — operating since summer 2020.
The next two stages, which will include 1,000 additional residential units, 70,000 square feet of office space, a two-story food hall, and a 60,000-square-foot retail space, will be completed by 2024.
“The 33-acre district will offer an unprecedented amount of open natural area (including outdoor working spaces), and bustling, walkable ground level with experiential retail and maker’s spaces, NHID will facilitate interaction and collaboration with a wide range of office users, entrepreneurs, retail tenants, creatives and makers through the urbanization of the traditional Innovation District,” Kane explained in a statement.
“We hope that Tower 5 and all of NHID will become home to innovative, forward-thinking companies that value employee satisfaction, originality and a culturally enriched urban area,” he added. “All of North Hills — and especially this new district — is ideally located, immediately accessible from I-440 and minutes from downtown Raleigh, RDU Airport and Research Triangle Park.”
In addition to the Innovation District, the Raleigh City Council proposed in 2020 the Midtown-St. Albans Area Plan to increase the walkability of Midtown Raleigh. The plan included pedestrian crossings over I-440, a new waterfront district, and a trail of greenways and on-street paths to connect the area’s four main neighborhoods, including North Hills.
The plan is still in the beginning stages, with the Raleigh City Council and the Department of Planning and Development working on amendments and gathering resident feedback.
Which area is the next hotspot?
Although Midtown-North Hills stood out to all of the agents Inman talked to, all of them agreed there’s plenty of areas that are just as popular or stand to outshine North Hills in a few years’ time. South Raleigh was an agent favorite, as the area is in the beginning stages of experiencing the same level of residential and commercial development as Midtown and offers a few more opportunities for first-time buyers.
“Anywhere in Southwest Raleigh seems to be a really hot, hot market. It’s up and coming,” Coldwell Banker Hunt Real Estate Group agent Julie Chriscoe told Inman. “There’s a lot of new construction, and even though it’s the opposite direction of Midtown.”
“Almost every home is going quite a bit over [asking price],” she added about Southwest Raleigh. “The homes listed as coming soon don’t even make it to the market to active status and they’re going under contract immediately.”
Stillittano said his team is in the midst of building a subdivision of townhomes in South Raleigh and all of them have sold, despite being unfinished.
“I have a 50-unit townhouse project and we’re out of the ground,” he explained. “We were out of ground with 15 of them — like from foundation to maybe framing. They’re all sold.”
Dane said his team frequently talks about chasing “gold dirt,” which is their term for areas that are poised to become the next it-spot. For Dane, South Raleigh is the biggest mound of “gold dirt” in the city as hundreds of Californians, New Yorkers and Chicagoans relocate to the city.
“[Gold dirt] is sort of my way of instead of talking about the cliche of ‘location, location, location,'” he said. “Gold dirt is everything other people want. We’ve got all these people moving into the general Raleigh area, with an overwhelming amount of them ready, willing and able to try to get into Midtown.”
“But the next area, if you’re going to try and think of what North Hills did, is going to be South Raleigh,” he added. “John Kane, who is doing the North Hills [Innovation District] development, is part of the team and the development crew that is going to put a soccer stadium south of downtown.”
Dane specifically pointed out Four Heights, Caraleigh and South Park as the next neighborhoods that could rise to the prominence of North Hills.
“Where’s the next gold dirt? Without a doubt, it’s those three neighborhoods, and if I was putting my money anywhere in real estate right now that’s where it’s at.”