Fayetteville, North Carolina has developed a reputation as a great place to live. It is the proud recipient of the All-American City Award, and it isn’t hard to see why. With small-town friendliness, a low cost of living and a great location, Fayetteville offers many opportunities to its residents. For all these reasons, and many more just like them, the Fayetteville housing market is thriving. There is also reason for optimism in the Fayetteville real estate investing market.
No more than three years ago, real estate in Fayetteville was in a downward spiral. Appreciation rates in the rest of the country had not yet taken hold in the North Carolina city. However, over the course of the last 12 months, things have changed for the better. Homes in Fayetteville have appreciated at a rate of 4.3 percent in the last year, just 1.4 percent below the national average. Prices will continue to grow relative to last year. As a result, the current median home value in Fayetteville is $145,000. That is a vast improvement from the same time last year. As a comparison, the national average is just over $208,000.
While home values in Fayetteville are well below the national average, homeowners have seen equity return, and they couldn’t be happier. Even those in the Fayetteville real estate investing market are seeing a lot of progress with the price gains. In all, equity has really helped the entire city. The following highlights how much equity has been gained in Fayetteville relative to the year of the home’s purchase:
- Homes purchased in the Fayetteville housing market one year ago have appreciated, on average, by $8,120. The national average was $14,170 over the same period.
- Homes purchased in the Fayetteville housing market three years ago have appreciated, on average, by $2,886. The national average was $53,857 over the same period.
While employment has held up and is on an upward trend, it is quite polarizing in comparison with the housing market. Typically, home values rise simultaneously with employment. However, Fayetteville has an unemployment rate of 6.1 percent – higher than that of the national average. Still, at 6.1 percent, the unemployment rate has made dramatic improvements in a relatively short period of time.
Despite having plenty of room to improve in the job sector, Fayetteville has one important aspect working in its favor: affordability. The price of real estate, in comparison to earnings in the area, is more affordable than most other markets in the country. On top of that, affordability is continuing to improve on historically high levels. In fact, while Fayetteville homeowners typically spend about 7.1 percent of their income on monthly mortgage payments, the national average is more than double that: 15.1 percent. That said, the Fayetteville housing market will continue to attract first-time homebuyers, and even those interested in Fayetteville real estate investing.
According to RealtyTrac, the affordability in Fayetteville is even more present in the distressed market. Data suggests that there are approximately 558 home sin the Fayetteville housing market in some stage of foreclosure. That is to say; these homes are either at risk of being repossessed, have already been repossessed, or are scheduled to go up for auction in the near future. Each of these scenarios is a great opportunity for the Fayetteville real estate investing market.
Investors, in particular, will enjoy great discounts offered by these properties. The median sales price of a non-distressed home was $96,000. The median sales price of a foreclosure home was $67,530, or 30 percent lower than non-distressed home sales. That is a savings of more than $28,000 per property.
Banks have already repossessed the overwhelming majority of distressed properties in the city. That is to say that 65.3 percent of all Fayetteville’s foreclosures are sitting as non-preforming loans on the books of banks. These institutions are literally trying to get rid of these properties. The Fayetteville real estate investing market should be aware of this. The remaining 34.7 percent of the distressed market are going to be put up for auction.
If the distressed market isn’t your first choice, it would be wise to look for homes in the area’s most popular neighborhoods. According to Trulia, Terry Sanford and Seventy-First are the most popular neighborhoods in Fayetteville, with average listing prices of $244,926 and $126,725. The neighborhood that has recently demonstrated the greatest week-over-week improvement, however, is Douglas Byrd. With an average listing price of $107,188; homes in Douglas Byrd increased by as much as 4.6 percent in a matter of seven days.
While the Fayetteville housing market is not quite as hot as some of those on the West Coast, it has a lot working in its favor. In addition to affordability, there will always be a demand. Fayetteville is home to Fort Bragg, and has a heavy concentration of military housing. This alone should make Fayetteville real estate investing very attractive.
Fayetteville Housing Market Summary:
- Current Median Home Price: $145,000
- 1-Year Appreciation Rate: 4.3%
- Unemployment Rate: 6.1%
- 1-Year Job Growth Rate: 0.2%
- Population: 204,408
- Median Household Income: $42,968