Slowly but surely, our local economy is returning to where it was before the Great Recession of 2009. What does this mean for the local housing market?
It means you’re going to need a lot of money to buy a home – especially here in Orange County.
“This has been a really good year…we’re now reaching or surpassing historic highs,” said Mark Zimmerman of Chapel Hill’s RE/MAX Winning Edge while addressing the Chapel Hill-Carrboro Chamber of Commerce’s annual “Spaces and Places” briefing last week.
Much of the news he had to share was good – at least if you’re in the market to sell.
“All of our areas are sellers’ markets,” he said. In fact, in the last twelve months ending in July, more homes sold in Orange County than in any other twelve-month period in history – breaking a record set before the recession.
That’s coupled with a lack of inventory: not only are there relatively few existing homes going on the market, Orange County isn’t building many new homes either – only 177 new units in the last 12 months. That’s about a quarter of what’s being built in Chatham and Durham.
And the consequence, Zimmerman says, is that we’re hitting another milestone as well – one that’s somewhat less exciting.
“Not a surprise: we have limited supply, we continue to have high demand, and…that means increasing prices,” he said last week. “The average price of a single-family detached home, over the last 12 months in Orange County, popped above 400,000 dollars.”
The per-square-foot cost of housing is also higher in Orange County – in spite of the fact that Orange County’s housing stock is also significantly older. The average home on the market in Orange County is now more than 30 years old.)
Zimmerman says there’s an obvious danger: if prices continue to rise like this, Orange County will continue down the road of becoming a place where only the affluent can live.
“We lost the ability to house our lower-income people, especially in Orange County, a long, long, long time ago,” he said last week. “If this trend continues, we’re going to start losing the ability to house middle-class people too.”
How do we avoid this? Zimmerman says it’s all about the market, and the market is all about supply and demand: if you want a lower cost of housing, you have to either reduce the demand or increase the supply.
Demand will likely remain high as long as Orange County remains a desirable place to live, and that’s not something anyone wants to change – so Zimmerman says the key to controlling the housing market is to build new units. And that’s something he says we’re not doing enough.
“When you add a lot of new inventory, you have a lot of competition…and it forces the product that isn’t new to price itself accordingly,” he said. “In Orange, since we haven’t been adding that competition, it allows the resale property to be able to grow in price unfettered – and that’s making everything less affordable.”
Six local business people were inducted into the Chapel Hill – Carrboro Chamber of Commerce in a ceremony on Thursday night at The Carolina Inn.
Those inductees were:
Dickie and Bev Dickinson of Dickinson’s Garden Center
Engineer M. Joseph Hakan
Victor Huggins of Huggins’ Hardware
Roger and Dorothy Jennings of Jennings & Company
Restaurateurs Moreton Neal and Bill Neal
Brother Peacemaker of Gates of Beauty Body Shop
“I am so honored to be here tonight, celebrating the accomplishments of the men and women who’ve given so much to develop our thriving business community in the greater Chapel Hill-Carrboro region,” said Aaron Nelson, President & CEO of the Chapel Hill-Carrboro Chamber of Commerce.
Hakan, Huggins and Bill Neal were inducted posthumously.http://chapelboro.com/news/business/six-inducted-into-chapel-hill-carrboro-chamber-of-commerce-business-hall-of-fame
I am fortunate to be one of twenty participants in this year’s Leadership Chapel Hill-Carrboro class. Each year, Leadership participants coordinate a fundraiser as our culminating project.
Our group is building on the great work of former cohorts to host a Casino Night on Tuesday, May 24th from 6-9 p.m. at the Hampton Inn and Suites in Carrboro.
In addition to blackjack, Texas hold’em, and roulette, we will have live music from Tea Cup Gin, and a silent auction and raffle with items from local restaurants, spas, athletics, and more. We’ll also have delicious food from Hickory Tavern, beer from Yesteryears, and wine. We hope to raise $15,000.
Members of our class lobbied passionately on behalf of deserving local organizations to receive our proceeds, and we selected the Cleft Palate Foundation, PORCH, Johnson Service Corps, Durham Tech EMS Foundation and NAMI to split the funds.
I’d like to invite everyone to attend the event on Tuesday. Advance tickets are $35 each or $60 for two and can be purchased here or on the events page of the Chapel Hill-Carrboro Chamber of Commerce webpage. I hope you will consider attending our event to empower these great local nonprofits to do more for our community.
— Sara Weiss
Chela Tu is Wednesday’s Hometown Hero.
Chela planned and coordinated Friday night’s Chapel Hill-Carrboro Chamber of Commerce Business Excellence Awards (also known as the BEAs).
The BEAs recognized the best that Chapel Hill, Carrboro and the surrounding area have to offer. See the full list of winners. The finalists were chosen from over 80 nominations by a selection committee of over 20 local business leaders and community activists.
Chela does a lot at the Chamber of Commerce. As a program manager she oversees monthly Taking Care of Business Forums and the Young Professionals Network events.
You can nominate your own Hometown Hero. WCHL has honored local members of our community everyday since 2002.
If you’re in the market to buy a home, where do you get the most bang for your buck?
In 2015, the average closing price for a home sold in Orange County was $342,172, according to Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson. “This is a new high since (before) the recession,” he says.
2007, right before the housing crisis, was the only year in history that Orange County saw higher home prices – and if current trends continue, the county will break that record in 2016.
But what are the numbers underneath those numbers? How does the price of housing in Orange County compare with other counties in the area? If there’s a difference, what’s driving the difference? And is that difference growing, or shrinking?
Start with the average cost of a home. $342,000 is a lot to pay for a house – compare that to Durham County, where the average closing price was just over $200,000 in 2015. But Orange County is not number one, not anymore: closing prices are actually higher in Chatham.
“Chatham County peaked above Orange County for the first time last year,” Nelson says, “and (it) remains in that slot.”
In 2015, the average home buyer in Chatham County paid $359,000 for their house, $17,000 more than they did in Orange.
But that doesn’t necessarily mean Orange County is offering a better value: Nelson says Chatham County houses are more expensive partly because they’re bigger. In terms of the cost of housing per square foot, Orange County is still the priciest: $142 per square foot, versus $138 in Chatham.
And if you want a home in the Chapel Hill-Carrboro school district, you’re going to pay even more. Last year, the average home in Chapel Hill-Carrboro sold for more than $382,000, or $157 per square foot.
(Compare that to $107 per square foot in Durham.)
“Housing in Chapel Hill is 30 percent more per square foot in the district than it is in Durham,” Nelson says. “So that 3,000-square foot home – the same home – costs 30 percent more.”
So if you’re in the market for a new house, you can get a much better value in Durham – and a slightly better value in Chatham – than you can get in Orange County or Chapel Hill.
But there are signs that this may be changing. In Chatham County, the cost per square foot has gone up dramatically – nearly 10 percent in the last two years. In Durham it’s gone up about 6 percent.
In Orange County, though, exactly the opposite has occurred. “For the first time,” Nelson says, “last year we saw a slight decline.”
For the average home sold in Orange County, the cost per square foot actually dropped by 4.7 percent from 2013 to 2015.
So the value gap may be narrowing between Orange County and its neighbors.
But is that necessarily good?
“If you’re an affordable housing advocate, you are heartened by this information,” Nelson says, “(but) if you’re worried about the erosion of home value, you are concerned.”
The cost of housing in Chatham County is on the rise partly because it’s bigger – and partly because it’s newer. The same is true for Wake and Durham. The housing stock in Orange County, by contrast, tends to be significantly older – and that may be contributing to the decline in cost per square foot.
And the cost of the home itself is not the only factor when it comes to housing value. Don’t forget about taxes, Nelson says: “A $300,000 house in Orange County has a $150-a-month higher tax bill than the same house in Wake County.”
If you’re looking to get a mortgage, Nelson says that translates into about $28,000. “You can buy a slightly more expensive home in other markets,” he says, “so the taxes do impact our cost of housing.”
All of those numbers, Nelson says, are things that homebuyers do consider when it comes to making the decision to live – or not to live – in Orange County.
Nelson made those comments and delivered those statistics at his annual State of the Community Report, last week at the Friday Center.
We know that Orange County’s population is growing, and that’s a fact that has some local folks concerned: concerned that we’re getting too dense, that we’re losing our small-town character, or that we’re getting too big for our infrastructure to manage.
But how fast is Orange County really growing? How does our growth compare to our peer communities? And where is that growth actually coming from?
“The story I’ve been telling myself is that people are moving here, that they’re coming to us from Florida and Ohio and the Northeast – but that’s not what’s happening,” says Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson. “Our domestic migration is actually negative.”
What does that mean? “More people move out of Orange County into the (rest of the) US than move into Orange County from the US,” Nelson says.
He’s citing numbers from the U.S. Census Bureau. In the year 2014, Orange County’s population grew by an estimated 1,055 people – but that growth did not come from people moving to Chapel Hill from other parts of the country.
Where did it come from? Immigration, as it turns out. About 800 new immigrants settled in Orange County in 2014, most of them either from Asia or elsewhere in North America. Nelson says that accounts for a little more than half of our population growth.
The rest of our growth is natural: 1,269 people were born in Orange County that year, while 738 people died. That’s a net population gain of more than 500, without anyone moving in or out.
“So we have to be aware that some of (our population growth) is somewhat beyond our control,” Nelson says.
In fact the census numbers suggest that most of Orange County’s population growth is not driven by our local policy choices. It’s partly a product of birth rates, partly a product of international trends. (And a lot of the rest is regional: “The Triangle has been growing wildly,” Nelson observes.)
But how fast is Orange County growing, anyway?
In the 2000s, our population grew from 118,245 to 133,801 – that’s an increase of more than 15,000 people in one decade alone.
Which sounds like a lot – until you look back at the 1990s, when Orange County added nearly 25,000 new people.
“In fact,” Nelson says, “the 2000s are the slowest decade of growth in Orange County since the 1960s.”
Nelson says Orange County’s growth has actually slowed down in the last 15 years – not just in real numbers, but also (and especially) in terms of percentage.
“This is the lowest-percentage population growth that we’ve had since the 1930s,” he says.
According to the Census Bureau, Orange County’s population grew by only 9 percent in the 1930s, but it grew by at least 20 percent every decade since – until the 2000s, when we saw only 13 percent growth. (So far this decade, we’re on track to grow about 12.5 percent.)
Compare that to Chatham County, which saw its population grow by about 28 percent in each of the last two decades.
Still, Nelson says, those numbers do add up. Chapel Hill’s population today sits at about 60,000, twice what it was in 1980; by 2050 it’s projected to double again, to nearly 114,000.
And that’s not all. By 2050, Carrboro’s population will jump from less than 20,000 to more than 50,000; Hillsborough will double from 6,000 to 12,000. Mebane will skyrocket from less than 2,000 people today to more than 42,000 by midcentury – and that’s just the corner of Mebane that’s in Orange County.
Those numbers are daunting. But how will it feel? Nelson says to get a sense of what that population will be like, we need to look at population density.
And there, he says, we actually do have some room to grow before we start feeling crowded. Durham and Wake Counties, for instance, are currently about three times as dense as Orange, because Orange County is more rural.
But even when it comes to the cities, Chapel Hill and Carrboro, Nelson says there’s still plenty of room to grow. At about 3,000 people per square mile, Carrboro is the densest town in North Carolina, and Chapel Hill’s not far behind at about 2,700 per square mile – but many of our peer communities outside the state are considerably more dense than we are. Charlottesville, Virginia, Burlington, Vermont, and Ann Arbor, Michigan, for instance, are all above 4,000 people per square mile.
“And I think we admire many of those as places we think are beautiful and wonderful,” Nelson says.
Chapel Hill’s population density isn’t projected to hit 4,000 until at least 2030 – and even then, we’ll be no denser than Charlottesville is today.
(Which isn’t to say that we won’t have difficulty accommodating all those new people – but there are model cities around the country that show us it won’t be impossible.)http://chapelboro.com/featured/how-fast-is-orange-county-really-growing
This probably won’t come as a huge surprise – but the amount of money that’s spent by Orange County residents exceeds the amount of money that’s actually spent in Orange County.
That’s a phenomenon with a technical term: it’s called a “retail gap.”
Delivering his annual “State of the Community” report this week at the Friday Center, Chapel Hill-Carrboro Chamber of Commerce president Aaron Nelson said Orange County has a retail gap partly because we haven’t gone out of our way to bring in major retailers. “Retail is something that we’ve not historically recruited in our market,” he said, because “it generally (offers) low-wage jobs, and we’ve been thinking about (recruiting higher-paid) jobs.”
But that means a lot of the big retail centers are outside county lines – think Tanger Outlets in Alamance County, New Hope Commons and Southpoint in Durham County, and the new Walmart in Chatham. Orange County residents often leave the county to spend their money – and while other people do come to Orange County to shop and eat (especially to eat!), it’s not enough to make up the difference.
How big is Orange County’s retail gap? Citing figures from the NC Department of Commerce, Nelson says Orange County residents spent about 1.8 billion dollars in 2014, but Orange County saw less than a billion dollars in retail sales. That’s a “retail gap” of 866 million dollars in a single year, far more than any other county in our area.
And Nelson says while other nearby counties have been reducing or eliminating their retail gaps, Orange County’s has been growing.
Nelson said a growing retail gap is a sign that Orange County could still use more retail development – the better to increase sales tax revenue.
But there are also signs that sales tax revenue is already on the rise. According to the NC Department of Revenue, Orange County saw a 36 percent increase in sales tax revenue per capita in just one year, 2013.
Orange County now ranks 42nd out of North Carolina’s 100 counties in sales tax revenue per capita; prior to 2013, Orange County hadn’t cracked the top 60 in years.
The Chapel Hill-Carrboro Chamber of Commerce not only helps the business community, but the community in general.
Aaron Nelson, President and CEO of the Chapel Hill-Carrboro Chamber of Commerce, discussed House Bill 2 with WCHL’s Ron Stutts Thursday morning. Nelson originally was scheduled to appear to discuss the chamber’s upcoming State of the Community report.
After discussing that report, Ron Stutts and Aaron Nelson addressed the controversial bill that overturned Charlotte’s recent anti-discrimination ordinance. Nelson said, “So many days I wake up so proud of North Carolina and so proud of our community. Yesterday was not one of them.”
“To prohibit local government from adopting anti-discrimination laws is unconscionable. It’s unacceptable…If you come by our office, you can use whatever bathroom you want…It’s not just a community issue. It’s a business issue.”
Statements from prominent businesses such as Red Hat and Dow Chemical have poured in since the passage of House Bill 2.
Listen to the full conversation with Ron Stutts and Chapel Hill-Carrboro Chamber of Commerce President & CEO Aaron Nelson.http://chapelboro.com/news/business/aaron-nelson-discusses-impact-house-bill-2
The Chapel Hill – Carrboro Chamber of Commerce has announced the finalists for the Business Excellence Awards.
The finalists have been chosen from over 80 nominations by a selection committee of over 20 local business leaders and community activists, according to a release.
The finalists for the 2016 Business Excellence Awards are:
Micro-Enterprise of the Year (0-5 employees):
– Balloons & Tunes
– Sharon Hill International
– i9 Sports of South Durham & South Orange Counties
Mid-Size Business of the Year (6-50 employees) presented by Bank of North Carolina:
– Kidzu Children’s Museum
– Dispute Settlement Center
– DSI Comedy Theater
Large Business of the Year (51+ employees) presented by SunTrust:
– The Carolina Inn
– UNC Health Care Hillsborough Campus
Non-Profit of the Year presented by Triangle Community Foundation:
– Community Home Trust
– Habitat for Humanity Orange County
New Business of the Year
– Vinyl Perk
– Silverspot Cinema
– Sally Mack
– Seal the Season
– Silverspot Cinema
– Club Nova Community, Inc.
– Strowd Roses
– Chapel Hill SCORE
University Born Business
– PHE, Inc
Business Woman of the Year
– Jan Bolick, WCHL Chapelboro.com
– Sharon Hill, Sharon Hill International
– Sylvia Sloan Black, Black Star Strategies
Young Professional of the Year
– Chris Ehrenfeld, Domicile Realty
– Zach Ward, DSI Comedy
– Antonio McBroom, Ben & Jerry’s
The winners wills be recognized at the awards ceremony from 6:30 – nine o’clock Friday night, May 13, at PlayMakers Repertory Company on Country Club Road.
More information on the awards and tickets is available at the chamber’s website.
Nominations are still being accepted for the chamber’s People’s Choice Awards through March 13. These voter-chosen winners will also be announced at the BEA awards ceremony on May 13.http://chapelboro.com/news/business/business-excellence-award-finalists-announced