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Axios Raleigh

A daily look at the most significant and interesting stories affecting Raleigh.

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Remote work is shaping the Triangle

Remote work has a huge influence on the Triangle's economy

News

Nugget blew up during the pandemic. Now what?

Nugget's couches became one of the hottest items to own during the pandemic.

Budget proposal could include new limits on suing North Carolina employees

Under a little-known provision quietly slipped into early state budget proposals, North Carolinians who sue state employees could soon lose the ability to present their case to a jury of their peers in state court.

Here's who's running for North Carolina governor in 2024

The election will take place November 5, 2024.

The Triangle's housing affordability hits new low with rising mortgage rates

Rising interest rates are making monthly payments more unaffordable in the Triangle

Business

Housing affordability across the Triangle has reached a record low, according to data kept by Triangle Multiple Listing Service.Why it matters: With demand for single-family homes increasing from local and out-of-state buyers, the price of a home has become increasingly unaffordable since the start of the pandemic.<ul><li>Coupled with mortgage rates continuing to rise, the affordability index tracked by Triangle MLS has never been lower.</li></ul>

Hines plans big redevelopment of Cary's Waverly Place

A rezoning application calls for adding up to 750 apartments plus more commercial space

Real Estate

The developer behind The Fenton shopping district in Cary has submitted plans for its next large-scale project.Driving the news: Hines, a Houston-based developer that has become <a class="gtmContentClick" data-vars-link-text="increasingly active in the Triangle" data-vars-click-url="https://www.axios.com/local/raleigh/2023/07/25/developers-eye-town-owned-property-in-downtown-cary" data-vars-content-id="7f999d3c-91fa-4e93-b554-5ec3e0039352" data-vars-headline="Hines plans big redevelopment of Cary&#x27;s Waverly Place" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2023/07/25/developers-eye-town-owned-property-in-downtown-cary" target="_self">increasingly active in the Triangle</a>, has submitted a rezoning request to turn Cary&#x27;s Waverly Place shopping center into a mixed-use development featuring hundreds of apartments.

Out-of-state buyers still showing interest in Raleigh real estate

Zillow search traffic for Raleigh homes is coming from Charlotte, New York and Atlanta

Out-of-state buyers are still showing a lot of interest in grabbing some Raleigh real estate, an Axios analysis of Zillow data shows.Why it matters: The Triangle continues to have one of the <a class="gtmContentClick" data-vars-link-text="hottest housing markets" data-vars-click-url="https://www.cbs17.com/news/local-news/wake-county-news/raleigh-is-1-hottest-real-estate-market-in-the-us-durham-is-3-according-to-2023-rankings/" data-vars-content-id="1ed9cc0b-0155-4083-a34c-fb90b1cc4357" data-vars-headline="Out-of-state buyers still showing interest in Raleigh real estate" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.cbs17.com/news/local-news/wake-county-news/raleigh-is-1-hottest-real-estate-market-in-the-us-durham-is-3-according-to-2023-rankings/" target="_blank">hottest housing markets</a> in the country — especially as newcomers from more expensive cities often <a class="gtmContentClick" data-vars-link-text="bring higher incomes and offer prices" data-vars-click-url="https://www.bizjournals.com/triangle/news/2022/09/08/triangle-wealth-grows.html" data-vars-content-id="1ed9cc0b-0155-4083-a34c-fb90b1cc4357" data-vars-headline="Out-of-state buyers still showing interest in Raleigh real estate" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bizjournals.com/triangle/news/2022/09/08/triangle-wealth-grows.html" target="_blank">bring higher incomes and offer prices</a>.

Raleigh's office vacancy rate is expected to keep rising thanks to remote work

Some of the Triangle's largest office buildings from Citrix to GSK are listed as available

Development

The demand for the Triangle&#x27;s office space remains weak even as millions of square feet are about to come online.Driving the news: The number of new office leases signed in the Triangle has dropped 35% year over year, as companies remain hesitant to commit to long-term spaces due to remote work trends, according to a quarterly report from the real estate firm Savills.And the leases that are being signed are for smaller spaces than in the past.<ul><li>&quot;You&#x27;ve got tenants looking to upgrade their space and relocating,&quot; Elizabeth Gates, senior research analyst at CBRE&#x27;s Raleigh office, told Axios. But, she added, &quot;they&#x27;re taking a comparable size footprint or they&#x27;re downsizing.&quot;</li></ul>Why it matters: The weak demand comes as more than 3 million square feet of office space is ready to hit the market — either through construction or the expiration of subleases.<ul><li>That will send the Triangle&#x27;s direct office vacancy rate of 13.3% sharply higher, according to CBRE.</li></ul>State of play: The amount of sublease space available in the Triangle appears to have hit a peak of 4.4 million square feet, according to CBRE, after firms like GSK and <a class="gtmContentClick" data-vars-link-text="Citrix listed huge amounts" data-vars-click-url="https://www.axios.com/local/raleigh/2023/06/23/citrix-vacates-raleigh-office-leaving-a-big-hole-to-fill" data-vars-content-id="bec73d7a-4e17-4d13-a85d-3c81db0975ae" data-vars-headline="Raleigh&#x27;s office vacancy rate is expected to keep rising thanks to remote work" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2023/06/23/citrix-vacates-raleigh-office-leaving-a-big-hole-to-fill" target="_self">Citrix listed huge amounts</a> of their former office space.<ul><li>But 900,000 square feet of those subleases expire by the end of next year.</li><li>At the same time, 2.2 million square feet of new construction — much of it around North Hills — will hit the market.</li></ul>Yes, but: No new office construction is slated to break ground in the coming months, which could help the market stabilize in the coming years, Gates said.

Triangle homebuyers flock to condos and apartments as housing costs surge

While single-family home sales continue to decline, condos and townhomes are increasing

As the number of homes sold in the Triangle <a class="gtmContentClick" data-vars-link-text="continues to decline from last year" data-vars-click-url="https://www.axios.com/local/raleigh/2023/07/14/housing-supply-north-carolina-mortgage-rates" data-vars-content-id="31da086d-16fc-4c6b-88b2-d859a7632aab" data-vars-headline="Triangle homebuyers flock to condos and apartments as housing costs surge" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2023/07/14/housing-supply-north-carolina-mortgage-rates" target="_self">continues to decline from last year</a>, one sliver of the housing market is actually seeing an increase in sales — high-end condos and townhomes.Driving the news: Under-contract homes sales declined 18.4% from June 2022 to June 2023, according to data from Triangle Multiple Listing Services.<ul><li>But if you narrow it down to townhouses and condos priced at $470,000 and up, sales are up 14.3% year over year.</li></ul>

Exploris School site on New Bern Avenue sells for $20M

New bus rapid transit line plan leads to wave of redevelopment on New Bern Avenue

More than seven acres of land on New Bern Avenue has sold for $20 million — the latest large-money transaction to happen along Raleigh&#x27;s future bus rapid transit line.Driving the news: The property, located at 600 New Bern Ave., has been home to The Exploris School, an elementary school, for years.

The Triangle continues to be a hot spot for new home construction

Raleigh is seeing new highs in apartment construction and a surge of new homes in the suburbs

The Raleigh area is seeing some of the largest upticks in new home construction in the country coming out of the pandemic, according to an <a class="gtmContentClick" data-vars-link-text="Axios analysis of Census Bureau data" data-vars-click-url="https://www.axios.com/2023/07/07/homebuilding-hot-spots" data-vars-content-id="0f2b87e2-d869-41e6-ba38-53432896a19f" data-vars-headline="The Triangle continues to be a hot spot for new home construction" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/07/07/homebuilding-hot-spots" target="_self">Axios analysis of Census Bureau data</a>.Driving the news: In May 2023, 139,600 total permits were issued across the U.S. — of which 88,900 were for single-family homes and 46,000 were for buildings with five or more units.Zoom in: But some cities are seeing an especially significant explosion in new home construction as a post-pandemic reality takes hold, Axios&#x27; Alex Fitzpatrick writes.Raleigh is one of those cities, with 138 new permits per 100,000 residents issued in May 2023 — up from 71.7 in May 2020.<ul><li>That&#x27;s significantly higher than the nationwide rate of 42.3 permits per 100,000 residents.</li></ul>The big picture: The Triangle, like many fast-growing metro areas, is <a class="gtmContentClick" data-vars-link-text="facing a housing shortage" data-vars-click-url="https://www.axios.com/local/raleigh/2023/06/26/raleighs-housing-deficit-is-17000-units" data-vars-content-id="0f2b87e2-d869-41e6-ba38-53432896a19f" data-vars-headline="The Triangle continues to be a hot spot for new home construction" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2023/06/26/raleighs-housing-deficit-is-17000-units" target="_self">facing a housing shortage</a>.<ul><li>In response, builders are building, with <a class="gtmContentClick" data-vars-link-text="apartment construction hitting a new peak" data-vars-click-url="https://www.axios.com/local/raleigh/2022/09/23/raleigh-hits-five-year-peak-new-apartment-construction" data-vars-content-id="0f2b87e2-d869-41e6-ba38-53432896a19f" data-vars-headline="The Triangle continues to be a hot spot for new home construction" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2022/09/23/raleigh-hits-five-year-peak-new-apartment-construction" target="_self">apartment construction hitting a new peak</a> — especially in places like <a class="gtmContentClick" data-vars-link-text="downtown Raleigh" data-vars-click-url="https://www.axios.com/local/raleigh/2022/09/01/raleigh-downtown-construction-boom" data-vars-content-id="0f2b87e2-d869-41e6-ba38-53432896a19f" data-vars-headline="The Triangle continues to be a hot spot for new home construction" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2022/09/01/raleigh-downtown-construction-boom" target="_self">downtown Raleigh</a> and <a class="gtmContentClick" data-vars-link-text="downtown Durham" data-vars-click-url="https://www.axios.com/local/raleigh/2023/07/19/biggest-durham-downtown-apartment-construction-projects" data-vars-content-id="0f2b87e2-d869-41e6-ba38-53432896a19f" data-vars-headline="The Triangle continues to be a hot spot for new home construction" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2023/07/19/biggest-durham-downtown-apartment-construction-projects" target="_self">downtown Durham</a>.</li><li>Most of the new homebuilding, however, <a class="gtmContentClick" data-vars-link-text="has been concentrated in the suburbs" data-vars-click-url="https://www.axios.com/local/raleigh/2022/07/29/construction-booms-nc-suburbs" data-vars-content-id="0f2b87e2-d869-41e6-ba38-53432896a19f" data-vars-headline="The Triangle continues to be a hot spot for new home construction" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2022/07/29/construction-booms-nc-suburbs" target="_self">has been concentrated in the suburbs</a>, in towns like Holly Springs or Mebane or <a class="gtmContentClick" data-vars-link-text="in more rural counties" data-vars-click-url="https://www.axios.com/local/raleigh/2023/06/14/prices-grow-fastes-in-raleigh-suburbs" data-vars-content-id="0f2b87e2-d869-41e6-ba38-53432896a19f" data-vars-headline="The Triangle continues to be a hot spot for new home construction" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2023/06/14/prices-grow-fastes-in-raleigh-suburbs" target="_self">in more rural counties</a> like Johnston or Franklin.</li></ul>

Developer interest in downtown Cary redevelopment project ramps up

Downtown Cary has become a hot spot for development in recent years

Earlier this summer, the town of Cary sent out a call to developers asking how they would potentially <a class="gtmContentClick" data-vars-link-text="redevelop 28 acres of town-owned land" data-vars-click-url="https://www.axios.com/local/raleigh/2023/05/22/carys-plan-to-entice-developers-downtown" data-vars-content-id="019566f7-0ab9-4076-b748-016a8afde0ee" data-vars-headline="Developer interest in downtown Cary redevelopment project ramps up" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/raleigh/2023/05/22/carys-plan-to-entice-developers-downtown" target="_self">redevelop 28 acres of town-owned land</a> in its downtown, including the town hall campus.<ul><li>In return, developers appear to be leaping at the opportunity to get in on the action.</li></ul>

Downtown Durham's apartment construction boom

From 27-story towers to building over popular restaurants, Durham is seeing a swell in apartment construction

More than 3,800 apartments are under construction or planned in downtown Durham, according to figures from Downtown Durham Inc., making it one of the hottest spots for residential construction in the Triangle.Driving the news: While office construction has nearly ground to a halt throughout the Triangle thanks to remote work, residential construction is still moving ahead, as developers continue to predict strong growth in the region.

Rising interest rates are stopping homeowners from selling their homes

Homeowners might have a great mortgage rate now, but likely can't move without spending a lot more cash.

The sharp jump in mortgage rates <a class="gtmContentClick" data-vars-link-text="over the past year" data-vars-click-url="https://www.freddiemac.com/pmms" data-vars-content-id="7f1ce3c3-6a27-4080-9bbb-3138ce35aa79" data-vars-headline="Rising interest rates are stopping homeowners from selling their homes" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.freddiemac.com/pmms" target="_blank">over the past year</a> is locking North Carolina homeowners in place and leaving prospective buyers with fewer options.<ul><li>More than 60% of homeowners with mortgages in North Carolina have a rate below 4%, per Redfin data shared with Axios.</li></ul>Why it matters: Mortgage holders are experiencing the &quot;golden handcuffs&quot; phenomenon: They might have a great rate now, but likely can&#x27;t move without spending a lot more cash, explains Redfin chief economist Daryl Fairweather.<ul><li>Meanwhile, 19% of homeowners in the state have a rate of more than 5%, as of the latest data from October of last year.</li></ul>

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