Is the need for affordable housing creating new markets?

[Cory J Thornton]

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

[Wyatt Wolff]

I think price is a strong factor, but there are others as well. WFH and hybrid are probably a large driver. 

Zoning in cities against certain property types and sizes, etc. 

I would look at the cities in NC that aren't geographically constrained (By mountains or water), and superimpose a map of ATL over them. Thats probably what we will end up looking like (Charlotte at least). 

[John Conlon]

With prices the way they are going, I feel people have no choice but to look to those ignored markets. Location is key but if you cant afford the location, where else are you supposed to go? I've been saying this for a while that I feel bad for the individuals who are just trying to get a piece of the pie(first time homebuyer). 

On the other hand, this could be a good thing for those ignored areas. Bring in some capital and get the rejuvenation its been needing for some time.

[Cory J Thornton]

Quote from @John Conlon:

With prices the way they are going, I feel people have no choice but to look to those ignored markets. Location is key but if you cant afford the location, where else are you supposed to go? I've been saying this for a while that I feel bad for the individuals who are just trying to get a piece of the pie(first time homebuyer). 

On the other hand, this could be a good thing for those ignored areas. Bring in some capital and get the rejuvenation its been needing for some time.

John I fully agree. I am watching it bring new life to towns that have been on a downward slide since textiles, steel and other big industries were shut down or moved over seas. 

As people move to these area I see some investors buying condemned housing inventory and bringing it back to the market. 

All of these trends are positive on a local level, the cause it tough for sure, but these small towns are benefiting. 

[Benjamin Carver]

To add to this.. fastest growing suburbs according to recent census says Wendell grew second fastest in entire state at 45% over last 3 years. Angier, Fuquay-Varina, and Zebulon grew 25%. Data shows people are flooding into outer burbs, which new construction is helping a great deal. They will grow much bigger over the next few years.

[Carlos Ptriawan]

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 This is very common.
Lets say suburban purchased 50 miles radius outside of city center. Milleneal would purchase 75mile radius, rand 75-150 miles are areas where it's bought by genz. because of the disparity in buying power, people is buying even further and further away. That's good area to invest.

[Jay Hinrichs]

Quote from @Carlos Ptriawan:

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 This is very common.
Lets say suburban purchased 50 miles radius outside of city center. Milleneal would purchase 75mile radius, rand 75-150 miles are areas where it's bought by genz. because of the disparity in buying power, people is buying even further and further away. That's good area to invest.

CA is the poster child for this.. Myself growing up in Cupertino CA  ( SF Bay Area Apple headquarters ) no one starting out could afford a home there on average incomes.

So buyers spread out to places no one would have bought say 10 years before that.. East Palo Alto
Richmond  Vallejo  Livermore and beyond to the central Valley and 2 hour commutes.

for 70% of the country there is no affordability issue.. houses can be bought even todays interest rates for the same basic cost as rent..  

these cities all have housing that is on public Sewer Water and police protection and houses can be bought that are liveable ( not brand new ) for 100k to 200k

1. Detroit
2. Cleveland
3. Columbus/ Dayton
4. Baltimore city
5. Toledo
6. KC  both KS and MO
7. St. Louis
8. Milwaukee
9. Chicago
10. Smaller towns in S Carolina and N. Carolina
11. Many Parts of semi rural FLA.
12. Jackson MS
13. Birmingham AL
14. Memphis
15. Indy

Etc. Etc.

And any Midwestern city under 100k pop.. Now the question becomes where will buyers want to live the inventory is there its the buyers that are choosing the more expensive areas.. A lot of that has to do with Schools And other Social benefits and concerns.  Folks that have good credit and jobs they are picky so thats why your seeing new construction sell so well also.

[Carlos Ptriawan]

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 This is very common.
Lets say suburban purchased 50 miles radius outside of city center. Milleneal would purchase 75mile radius, rand 75-150 miles are areas where it's bought by genz. because of the disparity in buying power, people is buying even further and further away. That's good area to invest.

CA is the poster child for this.. Myself growing up in Cupertino CA  ( SF Bay Area Apple headquarters ) no one starting out could afford a home there on average incomes.

So buyers spread out to places no one would have bought say 10 years before that.. East Palo Alto
Richmond  Vallejo  Livermore and beyond to the central Valley and 2 hour commutes.

for 70% of the country there is no affordability issue.. houses can be bought even todays interest rates for the same basic cost as rent..  

these cities all have housing that is on public Sewer Water and police protection and houses can be bought that are liveable ( not brand new ) for 100k to 200k

1. Detroit
2. Cleveland
3. Columbus/ Dayton
4. Baltimore city
5. Toledo
6. KC  both KS and MO
7. St. Louis
8. Milwaukee
9. Chicago
10. Smaller towns in S Carolina and N. Carolina
11. Many Parts of semi rural FLA.
12. Jackson MS
13. Birmingham AL
14. Memphis
15. Indy

Etc. Etc.

And any Midwestern city under 100k pop.. Now the question becomes where will buyers want to live the inventory is there its the buyers that are choosing the more expensive areas.. A lot of that has to do with Schools And other Social benefits and concerns.  Folks that have good credit and jobs they are picky so thats why your seeing new construction sell so well also.

 yes and it's also the same phenomena in Asia too. Recently, there's been a study about this market where the new city is rising. I think if we want to keep track of it, follow the builders and where Starbuck is opening their new store. 

Also people that can't live in east palo alto/livermore they move to central valley, that itself is also causing price to rise.

[Jay Hinrichs]

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 This is very common.
Lets say suburban purchased 50 miles radius outside of city center. Milleneal would purchase 75mile radius, rand 75-150 miles are areas where it's bought by genz. because of the disparity in buying power, people is buying even further and further away. That's good area to invest.

CA is the poster child for this.. Myself growing up in Cupertino CA  ( SF Bay Area Apple headquarters ) no one starting out could afford a home there on average incomes.

So buyers spread out to places no one would have bought say 10 years before that.. East Palo Alto
Richmond  Vallejo  Livermore and beyond to the central Valley and 2 hour commutes.

for 70% of the country there is no affordability issue.. houses can be bought even todays interest rates for the same basic cost as rent..  

these cities all have housing that is on public Sewer Water and police protection and houses can be bought that are liveable ( not brand new ) for 100k to 200k

1. Detroit
2. Cleveland
3. Columbus/ Dayton
4. Baltimore city
5. Toledo
6. KC  both KS and MO
7. St. Louis
8. Milwaukee
9. Chicago
10. Smaller towns in S Carolina and N. Carolina
11. Many Parts of semi rural FLA.
12. Jackson MS
13. Birmingham AL
14. Memphis
15. Indy

Etc. Etc.

And any Midwestern city under 100k pop.. Now the question becomes where will buyers want to live the inventory is there its the buyers that are choosing the more expensive areas.. A lot of that has to do with Schools And other Social benefits and concerns.  Folks that have good credit and jobs they are picky so thats why your seeing new construction sell so well also.

 yes and it's also the same phenomena in Asia too. Recently, there's been a study about this market where the new city is rising. I think if we want to keep track of it, follow the builders and where Starbuck is opening their new store. 

Also people that can't live in east palo alto/livermore they move to central valley, that itself is also causing price to rise.

yes simply cross the bridge from Singapore to Malaysia and you will encounter the same situation.

[Carlos Ptriawan]

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 some more data points :

here is a comparison of the housing markets in Rocky Mount, NC and Raleigh, NC as of 2024:Rocky Mount, NC:

• Average home value: $187,507
• 1-year change in home value: +8.0%
• Days to pending: around 17 days

Raleigh, NC:

• Average home value: $444,456
• 1-year change in home value: +4.1%
• Days to pending: around 9 days

Key differences:

1. Home values in Raleigh are significantly higher than in Rocky Mount. The average home value in Raleigh ($444,456) is more than double that of Rocky Mount ($187,507).
2. Over the past year, home values appreciated faster in Rocky Mount (+8.0%) compared to Raleigh (+4.1%).
3. Homes go to pending status faster in Raleigh (around 9 days) than in Rocky Mount (around 17 days), indicating a more competitive housing market in Raleigh.

[Adam Schneider]

@Cory J Thornton. Cory, I know I'm preaching to the choir, but for others on the thread..it's worth commenting that sellers sell for price, buyers buy for payments. So, the price of the home may not be as key for the buyers as the payments. Jumping from say 3% mortgage to 6% mortgage has shifted the payment affordability more than (in most cases) the recent appreciation that we have seen in the market. 

[Cory J Thornton]

Quote from @Carlos Ptriawan:

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 some more data points :

here is a comparison of the housing markets in Rocky Mount, NC and Raleigh, NC as of 2024:Rocky Mount, NC:

• Average home value: $187,507
• 1-year change in home value: +8.0%
• Days to pending: around 17 days

Raleigh, NC:

• Average home value: $444,456
• 1-year change in home value: +4.1%
• Days to pending: around 9 days

Key differences:

1. Home values in Raleigh are significantly higher than in Rocky Mount. The average home value in Raleigh ($444,456) is more than double that of Rocky Mount ($187,507).
2. Over the past year, home values appreciated faster in Rocky Mount (+8.0%) compared to Raleigh (+4.1%).
3. Homes go to pending status faster in Raleigh (around 9 days) than in Rocky Mount (around 17 days), indicating a more competitive housing market in Raleigh.

@Carlos Ptriawan - Thanks for the data points! The appreciation rate in these outlying communities paralleled with the days on market is a great data story to tell. Thanks for putting this together for everyone in the discussion. 

[Travis Timmons]

Yes! I think it's the year of the overflow markets. 

I'll just use an anecdote to illustrate my point. We have long term renters in Houston that are a 30 year old married couple, combined household income of about $110k, and they're going to be renters for 3-4 more years (based on their own admission). They have good credit and generally manage their money well. It's just expensive and they don't want to be house poor.

Contrast that with Temple, TX, where we own another property. It's a pretty vanilla town of about 80-85k about an hour north of Austin. It's not a particularly great place to live...I mean, it's fine, but certainly not a destination spot.  Our neighbors there are first time homeowners - he has a normal blue collar job and she is a barista at a coffee shop. The median home price there is about $185k and the population is growing like crazy. 

I feel like there are a lot of young families/couples that are not going to be patient enough to save up for 3-5 years. They'll start looking in secondary/tertiary markets to get in the game. The wife of the first couple above is a teacher. I wouldn't be shocked if in a year or two she starts kicking the tires on jobs in smaller TX markets like Bryan/College Station, Temple/Belton, Waco, New Braunfels, San Marcos, etc.

[Carlos Ptriawan]

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 This is very common.
Lets say suburban purchased 50 miles radius outside of city center. Milleneal would purchase 75mile radius, rand 75-150 miles are areas where it's bought by genz. because of the disparity in buying power, people is buying even further and further away. That's good area to invest.

CA is the poster child for this.. Myself growing up in Cupertino CA  ( SF Bay Area Apple headquarters ) no one starting out could afford a home there on average incomes.

So buyers spread out to places no one would have bought say 10 years before that.. East Palo Alto
Richmond  Vallejo  Livermore and beyond to the central Valley and 2 hour commutes.

for 70% of the country there is no affordability issue.. houses can be bought even todays interest rates for the same basic cost as rent..  

these cities all have housing that is on public Sewer Water and police protection and houses can be bought that are liveable ( not brand new ) for 100k to 200k

1. Detroit
2. Cleveland
3. Columbus/ Dayton
4. Baltimore city
5. Toledo
6. KC  both KS and MO
7. St. Louis
8. Milwaukee
9. Chicago
10. Smaller towns in S Carolina and N. Carolina
11. Many Parts of semi rural FLA.
12. Jackson MS
13. Birmingham AL
14. Memphis
15. Indy

Etc. Etc.

And any Midwestern city under 100k pop.. Now the question becomes where will buyers want to live the inventory is there its the buyers that are choosing the more expensive areas.. A lot of that has to do with Schools And other Social benefits and concerns.  Folks that have good credit and jobs they are picky so thats why your seeing new construction sell so well also.

 yes and it's also the same phenomena in Asia too. Recently, there's been a study about this market where the new city is rising. I think if we want to keep track of it, follow the builders and where Starbuck is opening their new store. 

Also people that can't live in east palo alto/livermore they move to central valley, that itself is also causing price to rise.

yes simply cross the bridge from Singapore to Malaysia and you will encounter the same situation.

 In Asia this is more noticeable because of higher population growth and also population density. Some city has about 15K per Kilometer pop. density and compare to Austin (highest growth) with 3K per sqm. 

Singapore is special because they're adding the size of the land by doing a land reclamation project. Similar like Dubai/UAE. 

I think the city in TX would also develop much faster than CA because TX has more relaxing regulations to build houses.

[Jay Hinrichs]

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 This is very common.
Lets say suburban purchased 50 miles radius outside of city center. Milleneal would purchase 75mile radius, rand 75-150 miles are areas where it's bought by genz. because of the disparity in buying power, people is buying even further and further away. That's good area to invest.

CA is the poster child for this.. Myself growing up in Cupertino CA  ( SF Bay Area Apple headquarters ) no one starting out could afford a home there on average incomes.

So buyers spread out to places no one would have bought say 10 years before that.. East Palo Alto
Richmond  Vallejo  Livermore and beyond to the central Valley and 2 hour commutes.

for 70% of the country there is no affordability issue.. houses can be bought even todays interest rates for the same basic cost as rent..  

these cities all have housing that is on public Sewer Water and police protection and houses can be bought that are liveable ( not brand new ) for 100k to 200k

1. Detroit
2. Cleveland
3. Columbus/ Dayton
4. Baltimore city
5. Toledo
6. KC  both KS and MO
7. St. Louis
8. Milwaukee
9. Chicago
10. Smaller towns in S Carolina and N. Carolina
11. Many Parts of semi rural FLA.
12. Jackson MS
13. Birmingham AL
14. Memphis
15. Indy

Etc. Etc.

And any Midwestern city under 100k pop.. Now the question becomes where will buyers want to live the inventory is there its the buyers that are choosing the more expensive areas.. A lot of that has to do with Schools And other Social benefits and concerns.  Folks that have good credit and jobs they are picky so thats why your seeing new construction sell so well also.

 yes and it's also the same phenomena in Asia too. Recently, there's been a study about this market where the new city is rising. I think if we want to keep track of it, follow the builders and where Starbuck is opening their new store. 

Also people that can't live in east palo alto/livermore they move to central valley, that itself is also causing price to rise.

yes simply cross the bridge from Singapore to Malaysia and you will encounter the same situation.

 In Asia this is more noticeable because of higher population growth and also population density. Some city has about 15K per Kilometer pop. density and compare to Austin (highest growth) with 3K per sqm. 

Singapore is special because they're adding the size of the land by doing a land reclamation project. Similar like Dubai/UAE. 

I think the city in TX would also develop much faster than CA because TX has more relaxing regulations to build houses.

there is absolutely no question that development can sprawl quicker and bigger in Texas with their current zoning laws and availability of land compared to CA.  and keep in mind So Cal and Nor Cal have very different development criteria etc.. much tougher in N.. Ca that So Ca generally speaking accept along the coast with the CA coastal commission

[Carlos Ptriawan]

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 This is very common.
Lets say suburban purchased 50 miles radius outside of city center. Milleneal would purchase 75mile radius, rand 75-150 miles are areas where it's bought by genz. because of the disparity in buying power, people is buying even further and further away. That's good area to invest.

CA is the poster child for this.. Myself growing up in Cupertino CA  ( SF Bay Area Apple headquarters ) no one starting out could afford a home there on average incomes.

So buyers spread out to places no one would have bought say 10 years before that.. East Palo Alto
Richmond  Vallejo  Livermore and beyond to the central Valley and 2 hour commutes.

for 70% of the country there is no affordability issue.. houses can be bought even todays interest rates for the same basic cost as rent..  

these cities all have housing that is on public Sewer Water and police protection and houses can be bought that are liveable ( not brand new ) for 100k to 200k

1. Detroit
2. Cleveland
3. Columbus/ Dayton
4. Baltimore city
5. Toledo
6. KC  both KS and MO
7. St. Louis
8. Milwaukee
9. Chicago
10. Smaller towns in S Carolina and N. Carolina
11. Many Parts of semi rural FLA.
12. Jackson MS
13. Birmingham AL
14. Memphis
15. Indy

Etc. Etc.

And any Midwestern city under 100k pop.. Now the question becomes where will buyers want to live the inventory is there its the buyers that are choosing the more expensive areas.. A lot of that has to do with Schools And other Social benefits and concerns.  Folks that have good credit and jobs they are picky so thats why your seeing new construction sell so well also.

 yes and it's also the same phenomena in Asia too. Recently, there's been a study about this market where the new city is rising. I think if we want to keep track of it, follow the builders and where Starbuck is opening their new store. 

Also people that can't live in east palo alto/livermore they move to central valley, that itself is also causing price to rise.

yes simply cross the bridge from Singapore to Malaysia and you will encounter the same situation.

 In Asia this is more noticeable because of higher population growth and also population density. Some city has about 15K per Kilometer pop. density and compare to Austin (highest growth) with 3K per sqm. 

Singapore is special because they're adding the size of the land by doing a land reclamation project. Similar like Dubai/UAE. 

I think the city in TX would also develop much faster than CA because TX has more relaxing regulations to build houses.

there is absolutely no question that development can sprawl quicker and bigger in Texas with their current zoning laws and availability of land compared to CA.  and keep in mind So Cal and Nor Cal have very different development criteria etc.. much tougher in N.. Ca that So Ca generally speaking accept along the coast with the CA coastal commission

 yes these are interesting because, in Nor Cal case home is not affordable because of the strictest regulation while the population is decreasing (while money flowing is increasing). In most Asian cities people move to outskirts of the city simply because of population growth alone while regulation is the most liberal.

TX is  good balance with a good population increase and less strict regulation.

It seems any normal city in US within 1 hour from a major MSA with a price below 300k is where younger families is going to invest.

[Account Closed]

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 It has been me and my team's and experience that location, is important but...people will make due where they can to own vice rent. 

[V.G Jason]

We've seen this, and it's going to remain a consistent theme. But for what it's worth, industries whether small to large cap now will double down in the main bigger city then venturing 30mi towards the biggest suburb. And for that, the locational value of having proper city land is going to be exponentially better.

Lots more in Fuquay-Varina or Garner than Raleigh, or Hillsborough rather than Durham. But look at where Apple and Google posted up. If folks keep adding to the suburbs, the industries will  stay in the host city and that land there will just get even more pricy. I look at my investments in Savannah, GA, and see lots of Atlanta folks come in.

It's like @ Jay Hinrichs example with Cupertino from back when. Most actual cities Gen Z/millennial cannot afford so they flood the perimeter of it, but prime Cupertino always in demand. Fundamentally, you want access to industry & schools. These small outskirt cities may develop excellent school districts(like cary in NC) but the industry growth plus school is rare. Very rare-- Houston piney point is like that. And such land is in perma-demand. 

[James Hamling]

@Cory J Thornton at risk of being wrong, I'd say we are at the middle of the beginning of a paradigm shift. 

For generations, hell millennia, things operated on a simple system that there is some geographic feature, somewhere, that brings many together in 1 spot, that brings more, a city builds, grows, and get's to a size that a kind of "gravity" is made putting people and industry in a geographic "orbit" of that market center. 

But now.... 

COVID lockdown "crashed the system" so to say. And at exact same time forced the use of an alternative one, remote working. Dislocated staffing. And, very key, it forced it's use for an enduring time. So people and employers not only had to use it, they had to integrate it's use, get good at it, accept it into the fold. 

Than at same time we get massive social upheaval, which given population density was focused in those more dense populous areas. Social unrest, riots, lawlessness. Add to this all the social unrest and upheaval in school systems which again most prevalent in populous dense areas.... 

It's a "perfect storm" of factors all hitting together. 

Where a new paradigm seems to be coming to the front that "good old family living" is to be found in the satellite areas, a step beyond the traditional suburbs. That the "work life balance" is almost directly translating as a remote whatever working situation. 

Gov agencies keep integrating more and more with this. And the private sector fight against remote, that was a fart in the breeze for most part. People WANT remote working lifestyles. 

And this change of primary income requirements becoming transient, opens up a whole different world of how people locate themselves. 

I think we are very early in it. I think we only saw the first wave from this, and are now into consolidation and normalization, from which sustained growth will next come, if not already is here in early days of it. 

Where high speed internet exists, is now a viable living potential, and that's a LOT of places. 

before, there was a sizable cost to where one geographically located. We didn't just change that, we flipped it on it's head because if you can do a remote CA tech job, man-alive your going to be rewarded if live in a say a rural SD town. Like Living in South Africa but earning in dollars, currency conversion rich. 

This is very early to say but yes, I think one of the next "gold rush's" for investors is in the development/re-development of these communities. I don't know what to call them other than maybe a "Z-market" because it's really driving in power by the younger generations who are saying f-this to living by conventional "old" rules of things. 

MSA's still hold a gravity, but it's not what it once was, there is this force that now exists immune to such geographic gravity, if not working in reverse polarity to it.  

I don't see it changing back. I think we at the beginning. Remember when internet first came out (I just dated myself didn't I, lol). There was this big rush, then got real quiet. It's like the first "cool" rush of things, but then it took time for integration. And it was years, YEARS before it started getting to be something other then a novelty. And it's like I woke up one day and out of nowhere the internet was a requirement.... I see remote work going exact same way. And with it, housing location choice. 

Good schools, good internet, good food, good prices. I think that's the magic 4 factors. I know good food seems a bit weird, I think so, but it's what I see repeatedly in these "z-markets" forming. Apparently food is a really big deal to younger generations, I'm not sure they know stoves are for cooking not gadget storage, lol. 

[Schaefer Marks]

Are these the areas of North Carolina that have the greatest need for workforce/attainable housing ($225-300k home)?

If so, are these local governments incentivizing the development of workforce/affordable housing? 

[Corey Conklin]

Everyone seems to think this is only an affordability issue. I think everyone is forgetting that there is a huge amount of people that DON'T want to live in or near a big metro area. There was a time in my 20's that I enjoyed being near all of the lights, sirens, and and amenities that a major metro provides but as you age you start to understand that it's really over rated.

I grew up in small town Kansas and have lived in some big cities after I graduated college. There is no comparison in the quality of life. small town, country living will ALWAYS beat the city life. You don't have to agree with that and it's not anything factual, but it's important to understand that there are millions of people that would agree with it.

I choose to only invest in small towns because I am seeing more and more people choose that life over big cities. In fact, I just had a young family from the Seattle area move into one of my houses in a small town in Kansas of about 11k people. I've had multiple people from metros all over the country reach out to my houses that are posted for rent on Zillow that are moving to small town Kansas. A lot of people want out of the city.

Sure, rising population metro areas are a safe bet when it come to investing. Location absolutely matters. But for a lot of younger family's a small community, starlit sky's, and the sound of nature are more important that constant sirens, Uber, dog spa's, and 100 different coffee shops or microbreweries.

[Jay Hinrichs]

Quote from @Corey Conklin:

Everyone seems to think this is only an affordability issue. I think everyone is forgetting that there is a huge amount of people that DON'T want to live in or near a big metro area. There was a time in my 20's that I enjoyed being near all of the lights, sirens, and and amenities that a major metro provides but as you age you start to understand that it's really over rated.

I grew up in small town Kansas and have lived in some big cities after I graduated college. There is no comparison in the quality of life. small town, country living will ALWAYS beat the city life. You don't have to agree with that and it's not anything factual, but it's important to understand that there are millions of people that would agree with it.

I choose to only invest in small towns because I am seeing more and more people choose that life over big cities. In fact, I just had a young family from the Seattle area move into one of my houses in a small town in Kansas of about 11k people. I've had multiple people from metros all over the country reach out to my houses that are posted for rent on Zillow that are moving to small town Kansas. A lot of people want out of the city.

Sure, rising population metro areas are a safe bet when it come to investing. Location absolutely matters. But for a lot of younger family's a small community, starlit sky's, and the sound of nature are more important that constant sirens, Uber, dog spa's, and 100 different coffee shops or microbreweries.

I suspect one major issue is price point.  JOBS dictate population .. so if someone can remote work and wants to live in a rural setting sure.. Schools are another big issue.. and as we age availability to health care.. I personally have lived in both.. Town in Northern CA of 4k and of course SiliconValley ( Cupertino).  What I saw with the small town most kids cant wait to leave.. they get board in small towns jobs are not available schooling etc.. Then like you they tire of big city and want to go back to their roots.. Or they never want to go back to small town living. Its  all personal preferences   finances  etc etc.

[Corey Conklin]

Quote from @Jay Hinrichs:

I suspect one major issue is price point.  JOBS dictate population .. so if someone can remote work and wants to live in a rural setting sure.. Schools are another big issue.. and as we age availability to health care.. I personally have lived in both.. Town in Northern CA of 4k and of course SiliconValley ( Cupertino).  What I saw with the small town most kids cant wait to leave.. they get board in small towns jobs are not available schooling etc.. Then like you they tire of big city and want to go back to their roots.. Or they never want to go back to small town living. Its  all personal preferences   finances  etc etc.

Working remote is a huge increase in value for small town living no doubt. There are plenty of jobs in small towns. They struggle to find people just like cities do. Small towns still need mechanics, plumbers, engineers, lawyers, etc. 

I agree that it is purely a preference. If you want something you will figure out the job and finances. If there is a will there is a way and I'm noticing a lot of people are willing their way out of cities.

[Carlos Ptriawan]

Quote from @Corey Conklin:

Quote from @Jay Hinrichs:

I suspect one major issue is price point.  JOBS dictate population .. so if someone can remote work and wants to live in a rural setting sure.. Schools are another big issue.. and as we age availability to health care.. I personally have lived in both.. Town in Northern CA of 4k and of course SiliconValley ( Cupertino).  What I saw with the small town most kids cant wait to leave.. they get board in small towns jobs are not available schooling etc.. Then like you they tire of big city and want to go back to their roots.. Or they never want to go back to small town living. Its  all personal preferences   finances  etc etc.

Working remote is a huge increase in value for small town living no doubt. There are plenty of jobs in small towns. They struggle to find people just like cities do. Small towns still need mechanics, plumbers, engineers, lawyers, etc. 

I agree that it is purely a preference. If you want something you will figure out the job and finances. If there is a will there is a way and I'm noticing a lot of people are willing their way out of cities.

 something like cupertino is actually more like a suburban than a city. In general Jay is right. But yes Cupertino is special case, it's all because of one men who made the town so affluent (meant Apple). Area like Cupertino,Los Gatos to Stanford is just a shadow of the American economy where tech titans is just moving from one zip code to another zip code in one geographical area (like apple in cupertino to nvidia in santa clara), these companies make real estate skyrockets although, in term of statistic, the population is decreasing by a lot.  it's job that dictates everything, it's easy to see why most companies are willing to move to austin and midwest as well. highly educated parent that had excellent job they want the highest quality school as well (hence they want their kid to study at local cupertino HS)... it's just the same thought process that keep eventually real estate more expensive and city boundary is also expanding. 

I would not surprise if 20 years from now the border of Austin will also developing. Driving for one hour is nothing.

[Jay Hinrichs]

Quote from @Carlos Ptriawan:

Quote from @Corey Conklin:

Quote from @Jay Hinrichs:

I suspect one major issue is price point.  JOBS dictate population .. so if someone can remote work and wants to live in a rural setting sure.. Schools are another big issue.. and as we age availability to health care.. I personally have lived in both.. Town in Northern CA of 4k and of course SiliconValley ( Cupertino).  What I saw with the small town most kids cant wait to leave.. they get board in small towns jobs are not available schooling etc.. Then like you they tire of big city and want to go back to their roots.. Or they never want to go back to small town living. Its  all personal preferences   finances  etc etc.

Working remote is a huge increase in value for small town living no doubt. There are plenty of jobs in small towns. They struggle to find people just like cities do. Small towns still need mechanics, plumbers, engineers, lawyers, etc. 

I agree that it is purely a preference. If you want something you will figure out the job and finances. If there is a will there is a way and I'm noticing a lot of people are willing their way out of cities.

 something like cupertino is actually more like a suburban than a city. In general Jay is right. But yes Cupertino is special case, it's all because of one men who made the town so affluent (meant Apple). Area like Cupertino,Los Gatos to Stanford is just a shadow of the American economy where tech titans is just moving from one zip code to another zip code in one geographical area (like apple in cupertino to nvidia in santa clara), these companies make real estate skyrockets although, in term of statistic, the population is decreasing by a lot.  it's job that dictates everything, it's easy to see why most companies are willing to move to austin and midwest as well. highly educated parent that had excellent job they want the highest quality school as well (hence they want their kid to study at local cupertino HS)... it's just the same thought process that keep eventually real estate more expensive and city boundary is also expanding. 

I would not surprise if 20 years from now the border of Austin will also developing. Driving for one hour is nothing.

My parents moved to Cupertino in late mid 60s for the schools.. this was before any tech. The economy went as Lockheed at Moffit field went. And the houses were 20 to 35k.. same price as buying in the mid west at the time.  I graduated from Cupertino High personally. :)

[Raju Balakrishnan]

One influencing factor is city planning and transportation. Housing expand in the direction of rails and freeways. In bay area it is following BART as it makes it easy to reach San Fran. Unfortunately CA  has been bad for building transportation (30+ years of incomplete bay area-LA rail!). If upcoming areas are better at public rails, their stories will be very different. 

Another factor is that several expensive cities do not want many new houses in the area as it will dilute the prices. Also there is this fear like high density housing might make the neighborhood less desirable and dilute the privileged status. This is often a driving factor behind overly hard permitting and building process (often 2-3 years for a permit for an SFR!). If the political influences are different in a state, they will see very different trends than bay area.