Shifting demographics can significantly alter key real estate markets. Accordingly, the most rapidly expanding urban areas in the nation have undergone a substantially transient phase over the past two years—specifically, metro areas saw a decline in residents whereas suburban and rural areas saw a major influx of transplants. COVID-19 also impacted the balance of supply and demand in the U.S. housing inventory, with historically low-interest rates fueling demand that the existing number of available properties simply couldn’t keep up with.
With the construction industry coming back online and getting back to business as usual in the post-pandemic era, ground-Up investment projects and construction are becoming a focal point as builders look to correct the housing inventory imbalance—presenting an intriguing investment opportunity for savvy investors looking to diversify their portfolios with a promising asset class with the potential to generate consistent returns for the foreseeable future.
As more employees opt for telecommuting positions, more individuals have the flexibility to relocate to suburban areas and relatively smaller metropolitan areas such as Denver that were already growing in popularity before the onset of the pandemic. Census data indicates that the West and South are the most rapidly expanding regions over the past decade.
It is important for real estate investors to maintain an awareness of these trends in order to adjust their long-term strategies to optimize cashflow and get the most bang for their buck. To that end, the experts at Gauntlet Funding have crunched the numbers from the latest market data research to provide you with the following analysis of the fastest growing markets that are ideal for your next ground-up construction project.
The number of available properties on the Cape Coral real estate market in April 2019 was just over 3,000. By April 2021, that number fell to a meager 392 available homes. This highlights the housing inventory shortage that is plaguing the majority of the country. The local construction industry is taking affirmative steps to address this issue. Although the average price for building materials spiked by more than 80% since April 2020, the supply chain issues that were accountable for these building cost increases are slowly being ironed out and making ground-up projects more feasible. With a ten-year population expansion of 24.2%, there is plenty of pent-up demand for new housing options in the Cape Coral area, which is one of the fastest growing cities in the entire country thanks to the beautiful weather and strong local economy.
The high availability of vacant land in the Raleigh-Cary area that can be obtained for reasonable prices is a major appealing factor for developers. Additionally, the ‘Research Triangle’ is renowned for its economic resilience, fantastic job opportunities and sought-after recreational attractions. The area has seen an influx of new residents as of late, with the population having risen by an astonishing 22.3% since 2010. This rise, however, has depleted the area’s housing inventory by a staggering 55% over the past 12 months alone, with approximately 38% of properties being sold at or above the listing price. Ground-up construction projects in the Raleigh-Cary area are an ideal asset for investors looking for consistent returns.
The highly active Charleston real estate market hit a 20-year low in terms of available housing inventory at the beginning of 2021, with less than 2,300 homes on the market. The subsequent uptick in competition amongst aspiring homeowners fueled a price increase of almost 20%. The average home price in the Charleston metro area is approximately $300,000, compared to the national median of $375,000. That means Charleston housing is relatively affordable, which is one of the factors that has driven the 20.2% population increase in the past decade. Newly built housing is sure to be in high demand for years to come, which makes Charleston a solid investment option.
Are you ready to get the ball rolling on your next ground-up construction project? The team of experts at Gauntlet Funding specialize in crafting efficient and flexible financing for investors looking to optimize their returns and take their businesses to the next level. Find out more about how we can assist you in accomplishing your investment goals - contact us today!