If you're considering venturing into the realm of flipping properties, Fayetteville, North Carolina presents a promising landscape.
Fayetteville, NC, stands out not only for its robust housing market but also for its exceptional quality of life and economic resilience, drawing a continuous influx of skilled professionals and military personnel. This city hosts a vibrant, diverse community with a strong emphasis on family-friendly activities, educational opportunities, and cultural events that enrich its residents' lives. Additionally, Fayetteville's strategic initiatives to enhance local infrastructure and public services foster a supportive environment for both residential living and business operations, making it a highly attractive market for real estate investors.
Let's dive deeper into this market together.
Fayetteville, nestled in North Carolina, boasts a flourishing housing market propelled by its affordability, community charm, and strategic location. Anchored in the Sandhills region, it holds significance in national defense owing to its adjacency to the Fort Bragg Army base and Pope Army Airfield.
The median sold price has surged by 7.2% year-over-year to reach $225,000 ($142/sqft), with an impressive 42% of homes sold below asking price last month. This bustling market sees properties swiftly changing hands, with a median time on the market of just 16 days. Notably, Fayetteville's growth surpasses that of major metropolitan areas like Philadelphia, New York, and Boston.
The city attracts a stream of migrants, particularly from larger urban centers, underscoring its allure.
*Source: https://www.redfin.com/city/5903/NC/Fayetteville/housing-market*
For some areas, demand is seeing appreciation accelerate and this is the perfect recipe for a flip strategy.
Demographic Insights:
- Younger Population: Zip codes like 28301 (27.5% between the ages of 20-34) and 28304 (23% between the ages of 20-34) have a larger proportion of residents under 34 years. This indicates a demand for smaller, more affordable housing suitable for singles or young couples, which are typically quicker to flip due to higher demand from first-time homebuyers or renters. However, this can be contrasted to a considerably lower rate in those segments with college degrees and further educational attainment, which is supported by lower median income of $34,748 in 28301 and $54,444 in 28304 compared to $66,778 in 28305 and $61,053 in 28306. This demand for affordable housing can be seen in the significant search for affordable housing.
- Demand for smaller housing:
- Zip Code 28303: 2-bedroom residences have experienced a substantial 28.6% year-over-year price surge. The sales volume and quick turnover suggest that 28303 is highly attractive for investments in smaller homes catering to young professionals or small families.
- Zip Code 28304: Although there's significant appreciation in larger homes, 3-bedroom houses here saw a notable 30.1% price increase, and the average days on the market dropped from 50 to 17 days. This indicates robust demand for moderately sized homes, likely driven by middle-income families and professionals.
- Zip Code 28305: While the focus in 28305 has been on larger, more luxurious homes, the substantial overall price increases and affluent demographics suggest potential niche markets for high-end, smaller homes, such as luxury townhomes or condos designed for downsizers or small, wealthy families.
- Affordability does not equal smaller-sized housing: Demand for affordable housing has not directly correlated with smaller housing, which can be seen by 5+ bedrooms increasing by 30.10% YoY in 28304. This is supported by search trends by terms like "affordable apartments Fayetteville NC" and "houses for rent under $500 in Fayetteville NC" suggesting a high demand for cost-effective living arrangements. However, the search for "family homes" and more spacious yet affordable rental options indicates a broader definition of affordability that includes larger living spaces.
- Diverse Family Structures: In zip codes like 28303 and 28304, a significant segment of the population includes families with children, as indicated by the demographic makeup. These families may require more space, thus seeking affordable housing that includes 2- or 3-bedroom homes rather than smaller units.
- Middle-Aged and Elderly Population: Zip codes like 28314 and 28306 have a higher proportion of residents over the age of 55. These areas may benefit from single-story homes or properties with accessibility features. There is a potential for homes that are accessible and require low maintenance, which could appeal to older buyers looking for long-term residences. For instance, 28305 shows a notable segment of the population aged 65 to 74 and 75 to 79 years old, suggesting a concentrated senior demographic that may require specialized housing solutions.
- Accessibility Considerations: Zip codes such as 28304 and 28314, marked by higher disability rates, present opportunities for properties with accessibility modifications.
- Higher Poverty Levels: Zip codes such as 28301 and 28306 have higher poverty rates, with significant portions of the population living below the poverty level (e.g., 32.4% in 28301). Investment in these areas might focus on affordable housing solutions, which are highly sought after and can be flipped quickly due to demand. Keywords like "cheap apartments in Fayetteville NC" and "houses for rent under $500 in Fayetteville NC" suggest a strong demand for cost-effective living solutions.
Median Sold Price & Market Dynamics:
- 28303 shows notable positive trends in home sales, especially for 2 and 3-bedroom homes, with a 28.6% and 13.2% year-over-year price increase respectively. This suggests strong demand and increasing property values, ideal for flipping investments.
- 28304 also shows a demand for larger units (3-bedroom homes experiencing a 30.1% price increase), which supports flipping strategies that focus on providing more space at affordable prices. This is crucial for families looking for roomier, yet economically accessible homes.
- 28305 has a spectacular 51.9% price increase for 5+ bedroom homes, reflecting an affluent buyer's market and potential for high-value flips.
- 28301 the diversity in housing needs might indicate a potential for flipping larger aged homes into multi-family units. This can cater to multiple small families or individuals on SNAP, maximizing the utility and affordability of the property. Hence why we are seeing a 21.70% YoY increase in price for 2 bedrooms.
Supply and Demand Dynamics:
- Sales Volume and Inventory Changes:
- 28303 and 28304 have seen increases in the number of homes sold, indicating healthy market activity. The price increases and quick turnover rates in certain home sizes within zip codes 28303 and 28304 suggest that the market is responsive to renovations and flips that cater to both small and medium-sized family units. Properties that can be quickly renovated and put back on the market are likely to capture this existing demand.
- 28305 though experiencing a slight decline in inventory, saw an increase in sales, particularly in larger homes, suggesting that despite lower availability, demand remains robust.
- Potential Saturation Challenges: Despite a surge in single-family home permits, areas like 28303 and 28304 may grapple with market saturation, necessitating strategic flipping approaches to navigate fluctuations in supply and demand.
Recommendations:
Emphasize nimble, smaller-scale flips in areas like 28303 and 28304 to mitigate risks associated with potential market saturation.
| Average Sale Time | | | |
|---|
| Zip | Apr 2023 | Apr 2024 | CHANGE |
| 28301 | 56 Days | 30 Days | -47.00% |
| 28303 | 61 Days | 33 Days | -45.80% |
| 28304 | 50 Days | 17 Days | -64.80% |
| 28305 | 76 Days | 39 Days | -48.30% |
| 28306 | 72 Days | 30 Days | -57.70% |
| 28311 | 69 Days | 34 Days | -49.90% |
| 28312 | 124 Days | 51 Days | -58.80% |
| 28314 | 51 Days | 23 Days | -55.00% |
28303: Focus on 2 to 3-bedroom houses, as these are currently experiencing robust growth in sales prices and demand. Focus on modern, efficient layouts that maximize living space without extensive structural changes. This can appeal to a broader market, from young professionals to small families.
- There is high search volume for keywords such as "houses for sale 28303" and "28303 homes for sale", which suggests strong buyer interest in this area. Additionally, terms like "houses for rent in Fayetteville NC by private owners" and related searches indicate a lively market for both buying and renting homes.
Example listing: 814 Bedrock Dr, Fayetteville, NC 28303 - Purchase Price: $80K
814 Bedrock Dr, Fayetteville, NC 28303 | Zillow
Nearest comps sold in Feb 2024 for $170K with 1,326 sq.ft compared to this property which has 2,220 sq.ft.
28304: Given the rapid sales turnaround and price increases across various configurations, a focus on 3 to 5+ bedroom homes could maximize returns, especially targeting larger families or investors in rental properties.
- Increased searches for "apartments Fayetteville NC 28304" and a noticeable interest in family-oriented housing options, as indicated by terms like "3 bedroom houses for rent Fayetteville NC", support the observed demand for larger living spaces in this zip code.
All feedback on my research is welcomed as always :)
Have a lovely week!
Frank
