What's Attracting Investors to Charlotte's Real Estate Market in 2021?

Charlotte is ranked by Realtor.com as the best real estate market in the Southeastern U.S. positioned for growth in 2021. The report predicts the Charlotte real estate market will have a combined growth rate of 19.0%, factoring in both sales growth and growth of home prices.

Charlotte, North Carolina is the most populated city in the state and one of the fastest-growing metro areas in the U.S. The diverse economy and quality of life in Charlotte helps to explain why the housing market is so hot. The Charlotte metro area is the second-largest financial center in the U.S., home to popular pro sports teams, and has one of the best year-round climates in the country.

In this article we’ll discuss why Charlotte is worth considering to invest in the next year and beyond. But first, let’s take a look at some of the factors driving the real estate market in the Charlotte metropolitan area.

>>Explore Roofstock's Charlotte investment properties here.

 

Population Growth

Charlotte is named as one of the fastest growing cities by WalletHub. In fact, Charlotte is growing faster than other cities in the Carolinas including Charleston, Durham, and Rock Hill. 

With nearly 900,000 people in the City of Charlotte and over 2.6 million residents in the metropolitan area, Charlotte and Mecklenburg County have ranked near the top for population growth in the U.S. A job market that is quickly recovering and increased diversification are just two of the many reasons why so many people and businesses are moving to Charlotte.

Key Population Stats:

  • Charlotte has a metropolitan population of nearly 2.6 million people, and is the 23rd-largest metro area in the U.S.
  • Population of Charlotte has grown by 1.74% year-over-year.
  • In 2019, Charlotte had a net migration of 7,810 people, while the net population growth in the City of Charlotte was 13,151 between 2017 and 2018.
  • 27% of the population in Charlotte is between the ages of 20 and 39, the perfect age group for real estate investors targeting the millennial renter.
  • Only four cities have grown faster than Charlotte, and today Charlotte has more people than Indianapolis.
  • In fact, Charlotte ranks fifth in the U.S. for population growth, according to local TV station WCNC.

 

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Job Market Trends

The economy in Charlotte is quickly recovering. According to the U.S. Bureau of Labor Statistics (BLS), the unemployment rate in Charlotte was down to 6.0% as of October 2020. Employment sectors showing the fastest signs of recovery include construction, trade and transportation, financial activities, and professional and business services.

The metro area is home to seven Fortune 500 companies and the country’s 2nd-largest banking center after Wall Street. Charlotte’s job market is super-charged with a high-octane blend of high-tech, white collar, and service and distribution jobs. In fact, Concord, a small suburban city in the Charlotte metro area, recently ranked as one of the top 20 fastest-growing economies in the U.S.

Key Employment Stats:

  • GDP of Charlotte is over $178.4 billion, growing by more than 59% over the past 10 years.
  • Employment has increased in Charlotte by 3.55% year-over-year and by 2.4% the previous year.
  • Over the past five years employment in Charlotte increased by 17.4%, with nearly 197,000 added to the workforce.
  • Charlotte ranks as the seventh-best place for business and careers, according to Forbes, and has ranked #5 as one of the best cities for jobs.
  • Technology jobs in Charlotte have grown rapidly over the past five years, with tech jobs increasing by 30% since 2013, a growth rate that’s twice the national average.
  • In fact, tech and logistics was the fastest growing employment sector in Charlotte in Q2 2019.
  • Charlotte is home to seven Fortune 500 companies: Bank of America, Honeywell, Nucor, Lowe’s, Duke Energy, Sonic Automotive, and Brighthouse Financial.
  • Other major companies based in the greater Charlotte metropolitan area include Wells Fargo’s Regional Headquarters for East Coast Operations, Food Lion, Compass Group USA, Dixon Hughes Goodman, and chemical company Albemarle Corporation.
  • Coca-Cola Bottling Co. is headquartered here and has its second-largest bottling facility in Charlotte.
  • Biotech manufacturer Hydromer recently moved its corporate headquarters to the Charlotte metro area and Boise Cascade announced a $17.5 million investment to its plywood manufacturing facility, according to the Charlotte Regional Business Alliance.
  • Major energy and technology companies doing business and research in Charlotte include Fluor, Piedmont Natural Gas, Siemens Energy, Toshiba, and Westinghouse.
  • University of North Carolina at Charlotte, Johnson & Wales University, Charlotte School of Law, and York Technical College are just a few of the major universities and colleges in the metropolitan Charlotte area.
  • 89.8% of the residents of Charlotte hold a high school degree or higher, while 36.2% hold a bachelor’s or advanced degree.
  • Interstate Highways I-85 and I-77 intersect near the center of Charlotte and serve as main transportation and distribution routes to major cities throughout the east, southeast, and midwestern U.S.
  • Charlotte Douglas International Airport (CLT) provided service to nearly 50 million passengers last year and handled almost 180,000 tons of cargo in 2018.
  • Charlotte is a major center for NASCAR, the Blumenthal Performing Arts Center attracts top performers from around the world, and the city is home to major professional sports teams like the NFL Carolina Panthers and NBA Charlotte Hornets.

 

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Real Estate Market

Charlotte is ranked as one of the best real estate markets in 2021 by WalletHub, and the best housing market in the Southeast in 2021 by Realtor.com. According to the Home Buying Institute (HBI) the Charlotte real estate market will remain very competitive in 2021, with strong demand and limited supply boosting home prices higher.

Key Market Stats:

  • Zillow Home Value Index (ZHVI) for Charlotte is $272,664 as of November 2020.
  • Homes values in Charlotte have increased by 9.9% year-over-year and are projected to growth by another 10.8% in the next 12 months.
  • Over the past five years home values in Charlotte have increased by 60%.
  • Median list price of a single-family home in Charlotte is $334,900 based on the most recent report from Realtor.com (as of Nov. 2020).
  • Median listing price per square foot for a home in Charlotte is $172.
  • Days on market (median) is 46.
  • Median sold price of a single-family home in Charlotte is $317,000.
  • Sale-to-list price ratio is 100%, meaning that homes in Charlotte are selling for approximately the asking price on average.
  • Of the 157 neighborhoods in Charlotte, Myers Park is the most expensive with a median listing price of $1.1 million.
  • Most affordable neighborhood for buying a home in Charlotte is West Sugar Creek where the median listing price is $229,900.

 

Attractive Renters’ Market

Charlotte is also ranked as one of the best cities for renters by WalletHub, based on key criteria including activity in the rental market, affordability, and quality of life. Over the last several years, surging population and the boom in high-tech and professional services jobs have helped to rank Charlotte as one of the best markets for real estate investors and developers.

Key Market Stats:

  • Average rent in Charlotte is $1,276 per month according to the most recent research from RENTCafé (as of Oct. 2020).
  • Rents in Charlotte have increased by 2% year-over-year.
  • Over the last three years average rents in Charlotte has grown by a total of 11.4%.
  • 59% of the rental housing units in Charlotte have rents of between $1,001 and $1,500 per month.
  • Renter-occupied households in Charlotte account for 40% of the total occupied housing units in the market.
  • Most affordable neighborhoods for renters in Charlotte are Avensong, Bradfield Farms, and Cedarbrook Acres with rents averaging $949 per month.
  • Neighborhoods in Charlotte with the highest residential rents include The South End, Uptown Charlotte, and Eastover where average rents range between $1,651 and $2,328 per month.

 

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Historic Price Changes & Housing Affordability

Researching historical price changes and measuring the affordability of housing are two of the many metrics rental property investors use to determine the past, current, and future demand for rental real estate in Charlotte.

According to Freddie Mac’s monthly Home Price Index (FMHPI) report, home prices in the Charlotte-Concord-Gastonia MSA have grown by 50% over the past five years:

  • October 2015 HPI: 136.43
  • October 2020 HPI: 204.78
  • 5-year change in home prices: 50%
  • One-year change in home prices: 10.7%
  • Monthly change in home prices: 1.2%.

Kiplinger also publishes data on home price changes and housing affordability for the top 100 housing markets in the U.S. Recent performance data for the Charlotte real estate market includes:

  • Since the peak of the last real estate cycle home prices in Charlotte have increased by 29.6%.
  • Since the last real estate cycle market bottom, home prices in Charlotte have grown by almost 58%.
  • Housing affordability in Charlotte is ranked as 4 out of 10, meaning that the Charlotte metro area is one of the more affordable places to own a home in the U.S.

 

Quality of Life

SmartAsset recently ranked Charlotte among the top 10 cities that millennials are moving to. But the fact is, the quality of life in Charlotte makes it the perfect place to live, work, and play for most every age group.

During a recent economic update presentation, Mecklenburg County (where Charlotte is located) listed nearly a dozen #1 reasons why Charlotte and North Carolina are booming.

Key Quality of Life Stats:

  • Cheapest city to base your tech startup.
  • Top tech momentum market.
  • Millennial moving destination.
  • Metro area with the highest growth of women-owned firms.
  • Best regional medical group – Carolinas Medical Center.

 

Get Out the Map

Where to begin your search? Roofstock created a heat map of Charlotte based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.

charlotte heatmap

DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood

Ready to invest in the Charlotte market? If you haven't already done so, create your free Roofstock account and set up alerts. We'll notify you when we have a Charlotte investment property that matches your search criteria.

 

 

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Jeff Rohde

Author

Jeff Rohde

Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.

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