Durham Real Estate Update - 2024

Comprehensive Real Estate Report: Durham, North Carolina

Introduction

This report provides a comprehensive analysis of the real estate landscape in Durham, North Carolina, focusing on popular and fast-growing ZIP codes, crime rates and trends, economic and development plans, and demographic and population growth information. The findings are based on data from various sources, including Zillow, the U.S. Census Bureau, and local crime statistics.

1. Popular and Fast-Growing ZIP Codes

Durham, North Carolina, is part of the Research Triangle, known for its rapid growth and development. The ZIP codes within Durham and its surrounding areas have seen varying degrees of growth, with certain areas experiencing significant increases in both rental and home prices.

Rental Market Growth
The pandemic has led to a seesaw effect on rental rates, with historically less expensive areas like Durham seeing an increase in rental rates. ZIP codes such as 27703 and 27713 are among the best places to live in Durham County, indicating a high demand for residential spaces in these areas (Niche.com, 2023).

Home Price Growth
The real estate market has been booming, with high demand for vacation homes and limited housing supply driving up prices. However, increasing mortgage rates have begun to slow this growth. Despite this, Durham (ZIP code 27703) is listed among the cities with the fastest-growing home prices in the Durham-Chapel Hill metro area (Stacker, 2023).

More neighborhoods and zip codes information are here

2. Crime Rate and Trend

Durham's crime rate is a critical factor for real estate investors and potential residents. The city's crime rate is 72.3% higher than the national average, with violent crimes being particularly prevalent. However, there has been a recent decline in violent crime by 10% in 2022, with a 9% decrease in violent crime in 2023 (ABC11, 2023; AreaVibes, 2023).

Despite the overall decrease, certain areas in northern and central Durham have seen spikes in violent crime. The northern district, in particular, has experienced a 200% increase in homicides compared to the previous year (ABC11, 2023). This trend is concerning and highlights the need for targeted crime prevention efforts in these hotspots.

3. Economy and Development Plans

Durham's economy is closely tied to its development plans, which are focused on accommodating the city's expected population growth. The city's population is projected to more than double in the next 25 years, with significant development occurring downtown (WRAL, 2023).

Development Initiatives
Downtown Durham has seen growth in all sectors, with an 11% increase in office space and a 7% increase in residential units. Small businesses have also seen a net gain of 10% since March 2020. These developments are part of a broader effort to position Durham as a hub for business and innovation (WRAL, 2023).

Strategic Planning
The City of Durham has introduced a strategic plan for FY24-FY26, focusing on making Durham a diverse, welcoming, and innovative community. This plan will guide the city's development priorities over the next three years (City of Durham, 2023).

4. Demographic and Population Growth Information

Durham's population growth is a testament to its economic vitality and attractiveness as a place to live and work. The city's population has increased by 1.59% since the 2020 census, with a current population of 288,934 (World Population Review, 2024).

Age and Employment
The median age in Durham is 34.6 years, indicating a relatively young population. The city is home to major employers such as Duke University and the Duke University Health System, which contribute to a robust job market (World Population Review, 2024).

Racial Composition and Housing
Durham's racial composition is diverse, with a significant representation of Black or African American residents. The city's housing market is dynamic, with a range of options available to accommodate its growing population (World Population Review, 2024).

5. Business Incentives in Durham

North Carolina has been recognized as America's Top State for Business for two consecutive years, with Durham playing a significant role in this achievement. The state's success is attributed to its lower costs, lower taxes, and targeted, performance-based incentive programs (Research Triangle, n.d.).

State Incentives
- Job Development Investment Grant (JDIG):
  This discretionary grant provides cash grants to new and expanding companies to help offset the cost of locating or expanding a facility in the state. The grant amount is based on a percentage of the personal income tax withholdings associated with the new jobs (Research Triangle, n.d.).
- One North Carolina Fund:
  Another discretionary cash-grant program that allows the Governor to respond quickly to competitive job creation projects (EDPNC, n.d.).

Additional Incentives & Information
- Rail Industrial Access Program: Assists in constructing or refurbishing railroad spur tracks required by new or expanding industries (Commerce, n.d.).
- Building or Site Funds: Funds demolition, reuse, or expansion of existing buildings for new projects (Commerce, n.d.).
- Technology Funds: Companies can receive funding from the state or NC Biotech Center to support science and technology innovations (Commerce, n.d.).
- Workforce Grants: Funding to offset the cost of on-the-job training and other workforce development programs (Commerce, n.d.).
- Downtown Development Funds: Encourages the economic vitality of North Carolina downtowns (Commerce, n.d.).
- Community Housing Grants: Promotes equitable, affordable housing (Commerce, n.d.).
- Film Industry Grants: Offers rebates up to 25% on qualified production expenses (Commerce, n.d.).
- Appalachian Regional Commission Funds: Provides social and economic support for a 13-state region (Commerce, n.d.).

6. Job Growth and Employment Information

Durham has shown a positive trend in employment growth. As of November 2023, Durham had 352,500 jobs according to the CES survey of employers, and the CPS survey of households showed 318,380 employed persons for the month. The CES survey indicated that Durham added 700 jobs in November 2023, while the broader CPS measure of employment rose by 573 (Dept of Numbers, n.d.).

Employment Changes
The CES employment for Durham in November 2023 reached a new high of 352,500, and CPS employment for the same period was at a new high of 318,380 (Dept of Numbers, n.d.). These figures suggest a robust job market in Durham, with a trend of increasing employment.

7. Major Employers and New Businesses in Durham

Durham's economy is supported by a mix of national companies, homegrown businesses, and new entrants to the market. The region's commitment to fostering economic development has attracted a variety of businesses across different sectors.

Existing Major Employers
- NetApp: A provider of cloud data services located in Durham (Durham Chamber, n.d.).
- UNC Health: A healthcare provider with facilities in the region (Durham Chamber, n.d.).
- BASF Corporation: A global chemical company with a presence in Durham (Durham Chamber, n.d.).

New Business Moves
- CARsgen Therapeutics Corporation: This biotechnology company is building manufacturing facilities in Durham, expected to bring approximately 200 jobs with a payroll impact of $15.2 million annually (Jim Allen, n.d.).
- Fidelity Investments: Opened a new Regional Center for Personal Investing in the Research Triangle Park, creating 500 new job opportunities (Jim Allen, n.d.).
- FUJIFILM Diosynth Biotechnologies: Announced an expansion with a new biopharmaceutical manufacturing facility in Holly Springs, bringing 725 jobs and a $2 billion investment to Wake County (Jim Allen, n.d.).
- Smart Wires: Opened a new global company headquarters in Durham, bringing in 250 new jobs and an estimated $3.07 billion in economic impact for the state (CBS 17, n.d.).
- Google: Launching a new engineering hub for Google Cloud in downtown Durham, promising more than 1,000 jobs (Jim Allen, n.d.).

8. Large Residential and Commercial Development Projects

Residential Developments
- The Willow Durham
  Located at 601 N. Roxboro St., Downtown Durham, The Willow Durham is a luxury residential project slated for completion in Fall 2023. It features two 5-story buildings, each housing 7 condominiums, with starting prices around $900K (Discover Durham, n.d.).
- Washington Street Mixed-Use Development
  Projected to be completed by 2025, this development at 510 Washington St, Downtown Durham, comprises two buildings connected by a pedestrian bridge. It will offer 7,791 sq. ft. of retail space and 310 multifamily units (Discover Durham, n.d.).
- Heritage Square Development
  Situated in the Hayti District, this multi-story office, laboratory, and residential development spans a 10-acre site. The project is being developed in phases (Discover Durham, n.d.).

Commercial Developments
- RTP Investment
  Research Triangle Park (RTP) is undergoing a transformation into a full-time community. The interest from life sciences and technology companies has spurred growth in commercial real estate within Durham (Gruener, n.d.).
- Longfellow Real Estate Partners
  Longfellow announced plans for the second phase of its Durham Innovation District with the C4 building at 215 Morris St. and 519 W. Morgan St. The building will include almost 200,000 square feet of office and lab space, with potential retail space (Gruener, n.d.).
- Topgolf and Andretti Indoor Karting & Games
  Both attractions are planned for 4901 Page Rd, SE Durham, with expected completion in 2024. Topgolf will feature a 3-story building with 102 bays, while Andretti Indoor Karting & Games will span 89,000 sq. ft. across two stories (Discover Durham, n.d.).

9. New Construction Communities and Builders

Stonewood Estates
This new community in Durham offers homes that are certified DOE Zero Energy Ready. The Winston model features a primary bedroom on the first floor and a variety of modern amenities. It is located minutes from Duke hospital with easy access to major highways (Redfin, n.d.).

Umstead Grove
Umstead Grove is selling energy-efficient homes with gourmet kitchens and covered rear patios. The community is surrounded by natural forests and provides quick access to Downtown Durham and RTP (Redfin, n.d.).

Harlowe Point
Lennar is building The Chadwick model in Harlowe Point, which is under construction with a target completion date of March 2024. The community offers quick access to RTP and Downtown Durham (Redfin, n.d.).

10. Real Estate Listing Inventory and Price Trend Information

Market Trends and Inventory
As of December 2023, Durham's housing market is somewhat competitive, with homes receiving an average of 2 offers and selling in around 42 days. The median sale price was $410K, up 6.5% from the previous year. The median sale price per square foot was $221, up 2.3% since last year (Redfin, n.d.).

Price Trends by Bedroom Count
In December 2023, the median sold price for 1-bedroom homes in Durham increased by 27%, 2-bedroom homes by 1.5%, 3-bedroom homes decreased by 1.7%, 4-bedroom homes increased by 1.1%, and 5+ bedroom homes increased by 1.5% (Rocket Homes, n.d.).

Housing Supply
The Durham real estate market had 879 homes for sale in December 2023, a 9.7% decrease compared to November 2023. The inventory of 1-bedroom homes increased by 6.7%, while 2-bedroom homes decreased by 5.7%, 3-bedroom homes by 9.1%, 4-bedroom homes by 13%, and 5+ bedroom homes by 14.1% (Rocket Homes, n.d.).

Sales and Listings
Statewide, real estate listings were down 4.8% from the previous year, with sales dropping 22.5% year-over-year. However, sales of homes priced between $500,000 and $2 million increased by more than 5% during the same period. In Durham County, listings were down 36.7% year-over-year in June 2023, with closed sales declining by 24.5% (Forbes, n.d.).

Housing Prices and Inventory
The median sales price statewide hit $302,549 in April 2023, an annual increase of 4.4%. The number of homes for sale in April 2023 increased by 16% compared to a year ago, with an inventory of 3.17 months (Forbes, n.d.).

Conclusion

Durham, North Carolina, presents a dynamic and promising real estate market, albeit with complexities that require careful consideration. The city's fast-growing ZIP codes, decreasing crime rates, robust economic development plans, and demographic growth collectively position it as an attractive location for both real estate investment and residency. However, addressing challenges such as crime hotspots and the need for affordable housing is crucial to ensure sustainable growth and livability.

As a hub for business and employment, Durham continues to thrive, supported by the state's competitive business incentives and a growing job market. The region's success in attracting major employers and new businesses reflects its economic vitality and potential for future growth. With a diverse range of industries, including biotechnology and IT, coupled with a commitment to economic development, Durham remains a leading destination for businesses and job seekers alike.

The real estate market in Durham is characterized by a mix of luxury residential developments, significant commercial projects, and new construction communities catering to various preferences and lifestyles. While the market is somewhat competitive, there is a trend towards higher prices and a decrease in inventory. Ongoing developments in the Research Triangle Park (RTP) and downtown Durham underscore the city's growth and the sustained demand for space in life sciences, technology, and other industries. As the market evolves, staying informed about the latest trends and opportunities will be crucial for investors, developers, and potential homeowners in Durham's dynamic real estate landscape.

To see more Durham neighborhoods, click here

References

Niche.com. (2023). 2023 Best ZIP Codes to Live in Durham County. Link
Stacker. (2023). Cities with the fastest growing home prices in Durham metro area. Link
ABC11. (2023). Violent crime declines across Durham except in these hotspots. Link
AreaVibes. (2023). Durham, NC Crime Rates. Link
WRAL. (2023). Officials expect Durham's population to double in the next 25 years. Link
City of Durham. (2023). City of Durham Strategic Plan. Link
World Population Review. (2024). Durham, North Carolina Population 2024. Link
Business North Carolina. (2023). North Carolina 2024 Economic Development Guide. Link
CBS 17. (n.d.). New global company headquarters opens in Durham, brings new jobs. Link
Commerce, N. C. (n.d.). Grants & Incentives. Link
Dept of Numbers. (n.d.). Durham-Chapel Hill, North Carolina Job Growth. Link
Durham Chamber. (n.d.). Durham Chamber of Commerce. Link
EDPNC. (n.d.). Incentives. Link
Jim Allen. (n.d.). 14 Companies Stimulating Growth Across the Triangle. Link
Research Triangle. (n.d.). Incentives & Grants. Link
Discover Durham. (n.d.). New Developments. Link
Gruener, B. (n.d.). Major Commercial Real Estate Projects Underway in Durham. Durham Magazine. Link
Redfin. (n.d.). New Homes in Durham, NC. Link
Rocket Homes. (n.d.). Real Estate Trends in Durham, NC. Link
Forbes. (n.d.). North Carolina Housing Market. Link