I’ve found Raleigh to be an interesting place. It is a very eclectic blend of classes and tastes throughout the city, and there is no better way to view where the lines are drawn than to look at the housing market.
It’s important to note that even the smallest of neighborhoods can be an exception to the rule, but if you look at the overall listings for an area you will quickly see how difficult is it to live exactly where you may want to be.
Let’s say you are looking to move to Raleigh. Let’s assume that you are an average Joe Young who works hard and makes a fair salary of $40,000/yr. You won’t be retiring anytime soon, but $40k is certainly nothing to turn your nose at. Roughly speaking, the math will break down like so:
- 40k / 12 months = $3,333k per month
- $3,333 / 3.5 = ~$950 per month (est. available cash for mortgage + escrow)
- $950 = $145,000 est. loan (5% interest, 30 year fixed, escrow included)
- In theory it means that you can buy a $180,000 home if you have 20% to put down.
All of that weird science and math basically means that you can survive with your $145k loan if you scape by. I don’t mean, “oh let’s cut back on the beer money”, either. I am talking about no furniture, eating Ramen noodles for 3 meals a day, riding your bicycle to work, and stealing toilet paper and plastic utensils from the office kind of scraping by.
Realistically you should keep that in mind when you are shopping for your new home. The image above shows listings for the kinds of homes you can expect in that budget. To give you a rough break down of the city it breaks up like so:
- Southeast Raleigh – A mix of urban professionals and working class. There are numerous homes built in the early 1900′s that are in terrible condition, and 1950-1970 homes that still have some fight left in them. If you were to revise your home search to less than $80k, you’ll find that nearly 100% of the listings fall in the Southeast region. The crime rates are a little on the higher end here than most other regions of Raleigh.
- Northeast Raleigh – Is a little more suburban that southeast. This region has access to a lot of malls, shopping, and some entertainment. With it comes the good and the bad. The traffic can be especially bad, but opens up as you move further away from the center of the city. The homes quickly turn rural the further you get, especially reaching outside the beltway. Because of this you can generally find homes in the budget we’ve discussed that may not be as close to the poverty line as southeast. Still the region is prominently middle and working class.
- West Raleigh – West of Capitol Blvd gets a little trickier to define. There is a vast blend of old and new and the houses can fluctuate from $200k to $3M depending on how close you are to key landmarks. Note that a $200k home in this area is likely to be less than 1500 sqft and in need of a little TLC. One major landmark is NCSU. There is radius of effect from that point, where the closer you are to NCSU the more you can expect to pay. There is a steep climb in the value of a building if it is within walking distance of the facility.
- Cameron Village / North Hills – These are the two hot-beds of the west and north sides of Raleigh. They are quickly growing and the houses are easily listed in the neighborhood of $200/sqft. Cameron Village is much more like the “old town revitalized for the young crowd” making it an eclectic neighborhood of old-school and new-school. It’s also highly congested because of old and narrow roads not meeting the new population demands. Northhills is much more of the modern construction and planning type of area. It’s growing quickly and so are the housing prices. Being further north also positions the tech-savvy people in the heart of “The Triangle” and much closer to jobs that reside in nearby Durham.
So there you have it. If you are making only a decent wage and looking to live in or near the city of Raleigh consider your options carefully. Moving just outside of the city will always give you more property for less cash but it takes you away from the places that everyone is clawing to get into.
Happy House Hunting!