Real Estate Market in Fayetteville NC

[Jared Trindade]

To The Ville!

*If you follow my posts you know this is rather quickly to do another post for Fayetteville NC, however, my original Fayetteville post was not done in the current format that I now use, therefore lacks a lot of the substantive information I now have systems in place to get. As such I will link my old post, here -https://www.biggerpockets.com/..., which will contain information I will use here if it's still applicable, and the sources for that information will be on that post. It's worth noting that some of the previous information provided was not the correct selection of which number to reference. The format I use now will provide significantly more value to the reader. *

Fayetteville is a large municipality positioned an hour south of Raleigh, supporting a population of around 209,000 and employing about 78.1k people (~ -.635% growth year over year).

Fayetteville's annual population growth rate is sitting around 0.36% which is not a highlight, -.15% growth since the 2020 Consensus has been recorded. Persons over 65 account for 11.2% of the population. Median age of 30, 19.3 min average commute to work, and around 25,000 veterans locally. Fayetteville is the 6th largest city in NC, and the 120th largest in the US. It should be mentioned that Fayetteville's Greater Metro Area population is ~525,000 people and at around 0.80% growth annually, 33 Median Age, 23 Minute Commute to work, and constituting nearly 60,000 Veterans. -Lots of VA presence here.

Fayetteville of course is the famous home of Fort Bragg, with nearly 57,000 active personnel, 11,000 civilian employees, and 23,000 family members. Fort Bragg is a massive military installation, built on 140,618 acres, consequently the largest base in the US, and one of the largest in the world. Interestingly enough Fort Bragg is the also the most interconnected with civilians in the US, a recent study found that 55% of of Fort Bragg's personnel live intermingled with civilians. This is a good sign for investors. STRs, LTRs whether SFH or MFH are in demand from Military. Anyone who has managed properties with military tenants also know how much easier that can be (in terms of landlord friendly), despite the need for them to leave on a moments notice sometimes.

Anecdotally speaking- when I worked in car sales here in Fayetteville, it was pretty much a weekly basis that new troops were coming in. If they want to get out of the barracks and live more comfortably, they require two things- Transportation, and a place to stay. There may be higher turnover, but there's always a steady supply of new renters and buyers coming in to town. Fort Bragg is one of the essential components to Fayetteville's economy. 2021 Fayetteville put up a $19Bn GDP.

Fayetteville has been the recent target of a ton of infrastructure improvements. The roads and traffic have been of major concern, they have been implementing new medians and traffic patterns, opening up roads, and building a new thoroughfare cutting around Fayetteville and heading south. Many of the transportation projects are still in the project phases, but I must admit I have been impressed with the intention, and speed of which these improvements are being undertaken. Cliffdale Rd is one that 3 years ago at 5pm you could be stuck in traffic for 30 minutes, and now it rarely sees any traffic issues. I lived off that road for a few years, and I massively appreciated the new layout. 

Amazon is on pace to finish opening their new Warehouse in Fayetteville, which will be linking right into the new additions on the thoroughfare, and sit roughly in the northern center part of the Ville. It's expected to employ 500 full time workers, and will likely lead to an uptick in demand for homes nearby in the 1-3 months prior to it's opening. I am extremely excited for this project, and already am seeing local improvements pop up in places near the warehouse. Santa Fe will take you right down to the warehouse, and I have seen a couple new apartment complexes, and a new 7-11 being worked on/opened in the area. It's a good sign that one of the more transitional areas of Fayetteville is going to start that upward trend. I hope it continues to lead to more development in that local area. 

Fayetteville has a 5 year plan to work on Downtown, I will highlight the 7 key points, and link the page to get access to the pdf. **I highly recommend opening this PDF and looking at pages 7 & 8, the photos and information there may be valuable to you**

https://www.fayettevillenc.gov... - Plenty more to read if you wish to look at more of the documents. Fayetteville has much more going on than I can talk about. 

The 7 key focuses are as follows- 1. Stimulate Ballpark-area Investment, 2. Create a Downtown District, 3. Improve Downtown’s Gateways, 4. Foster Downtown Living, 5. Strategically Locate Cultural Venues, 6. Improve Mobility and Streetscapes, 7. Enhance Parks and Trail Connections.

Fayetteville's largest school is Fayetteville Technical Community College with just shy of 11,000 enrolled students, followed by Fayetteville State University with enrollment of 6,700, and Methodist University with 1,700 enrolled. Pretty decent number of students in town, just not rocking the same student population as some of the larger cities in NC. 

Let's talk crime, then numbers. Fayetteville sits at a 6 out 100 on the crime index (with 100 being the safest), This isn't the worst city in the state, and for reference Charlotte's score just dropped from a 7 to a 5 in the past month due to a large uptick in crime (Q4 2022 saw a 26% increase in homicide). Not a bad number to sport considering some of the reputation that Fayetteville has. 

The median home value is around $150,000 (~$170,000 with the Great Metro area included), median sale price is at $190,000. Average DOM around 55, with average homes getting 1% under list and pending in 10 day, and hot home getting an average of 3% over list and pending in 4 days. Many homes are still getting multiple offers, some are waiving contingencies, there are a lot of buyers here, and the price points are extremely attractive. I'd consider it "Very" Competitive. You love to see some numbers like that.

About a 45% owner occupied ratio. SFH 64% MFH 34%. Poverty rate is around 15%, there is a decent need for affordable housing in this market. Lots of renters out here, average market rent is $1635/mo. Conflicting data suggests is may be closer to $1500/mo for a 2/3 bed rental, and ~$900 average for a decent studio. Either way, this is an increase in market rent across the board. I've seen many prices jump $100-$200 in rent from 2021-2022, and increasing another $100-$200 between 2022-2023. It's not rare to find a property with a tenant renting in the $700-$900s when market rent is more like $1,200 for that area.

Additional Numbers to consider: 14.4% of homes are Military households. 28.3% of homes are valued between $75,001-$150,000, and 45.9% are valued between $150,001-$301,000. Appreciation since 2000 Q1 - 2022 Q3 was 85.1% with an average annual growth rate at 2.7%. 

Fayetteville has a cost of living ranked as 47/50th most expensive in NC, which means as far as NC is concerned it is extremely agreeable in pricing. People in Fayetteville get to enjoy some of the benefits of the cheapest prices in NC. Fayetteville also makes the cut in the top 34% of cities to live in, in the world.

To conclude, Fayetteville is one of the markets in NC that is and should be on an investors radar. It has massive potential. Investors can aim to work more with the military or the civilian side, they have the options of SFH or MFH, and any military town is going to need STRs/MTRs and LTRs. It's proximity to the largest military base in the US makes it extremely attractive for travel, whether in or out, and there's a constant influx of new people who need places to stay. Fayetteville's ability to offer every type of investment, while being extremely accessible due to price points has drawn a lot of attention this way. Multiple Colleges, Cape Fear Hospital, and Fort Bragg pour a lot into this market and present options to investors. 

Side-note: I live and work in Fayetteville, been calling it home for quite some time. Hence why this post may be a little longer and with more data pulled, I'm a sucker for the Ville. 

As always looking for questions, comments, concerns, and any feedback. It's impossible to know everything about a market, so any value add information is expressly desired, and I appreciate it! I'm looking to connect with more people on here, so please reach out!

For more reading and sources:

https://www.census.gov/quickfa...

https://censusreporter.org/pro...

https://censusreporter.org/pro...

https://worldpopulationreview....

https://www.realtor.com/reales...

https://www.redfin.com/city/59...

https://datausa.io/profile/geo...

https://datausa.io/profile/uni...

https://datausa.io/profile/uni...

https://datausa.io/profile/uni...

https://www.neighborhoodscout.... 

https://www.neighborhoodscout....

https://livingcost.org/cost/un...

https://home.army.mil/bragg/in...

https://fred.stlouisfed.org/se...

https://www.forbes.com/places/...

https://www.fayettevillenc.gov...

https://www.fayettevillenc.gov...

[Jared Trindade]

Quote from @Derrick Blackwell:

Thanks for the insight into the Fayetteville market. I see a lot of positives but I have to wonder, with a growth rate of only 0.36% are homes likely to continue appreciating? Historically Raleigh, fuquay Varina and Charlotte have appreciated much faster. The past couple years have been outliers in every market but long term I'm thinking it will be back to historical trends. Also the thought of a war is looming in my head and how that might effect the Fayetteville market.

1. Whats your thought on how war would affect Fayetteville?
2. Do you think the appreciation rate of homes in zipcode 28304 (Jack Britt) will continue to impress?

Thank you your feed back is much appreciated.

Thanks Derrick, I appreciate your feedback and your questions, thanks for taking the time to read through my post! 

1. With this question in particular I would say that I am genuinely unqualified to give you any sort of information that would be conducive to your investments, it would be purely speculative and I wouldn't stake my name on speculation. I am not a military man, and only have military family that are all unfortunately passed minus two, a WW2 vet, and a Iraq vet who neither saw orders in Fort Bragg. I am simply unaware of how Fort Bragg would operate in open warfare times. If you look at recent history and consider that we have been in open conflict for a very long time- you would say that what we see with conflict really doesn't make a difference as Fort Bragg has been this way for decades, and continues to prosper. Also consider that Fayetteville has two markets- the military, and the civilian- there is ample civilian population to make it a strong rental market despite the military presence. 

A full blown war in the Modern era would likely not yield good results any where.

As a side note- Soldiers who would get deployed that are single and renting would lead to a spike in vacancies. Families of those deployed troops are unlikely to leave, BAH will still be received and in the unfortunate case of loss of life of the deployed individual would see that family taken care of by our Military. 

2. The locations around Jack Britt are in high demand, we see a lot of investors targeting this area, and many flips are put out on a regular basis in this zip. I would like to see a steady increase in appreciation in that specific area, as it continues to transition into a very nice part of town. 

To put it bluntly however - Fayetteville is not your ideal appreciation market. If you are truly looking for investments that are going to yield higher appreciations, I'd suggest keeping an open mind on certain Fayetteville locations, but largely looking elsewhere. Like Raleigh/Durham/Charlotte where appreciation has been good (170.56% Appreciation in Raleigh at 4.47% annual rate in the same time periods as the ones referenced for Fayetteville), and looks like it will continue to trend upwards for the time being.
Fayetteville is mostly attractive in the sense that price points are low, and you can cash flow. Like most military cities, when the base grows, so does the immediate surrounding areas, as local economy is boosted by the military. People who are coming and going, even for a couple months at a time are potential renters, potential buyers, and consumers in the area. 

Love to hear your feedback on this, and if someone who is more familiar with how Fort Bragg may be operated in full scale war time is able to shed more light on this topic that would be appreciated. 

Hope this answers your questions as far as my personal take on this is concerned. 

Cheers!