Priced out? The housing affordability crisis in Chatham County

By Gene Galin

Pittsboro, NC – Chatham County in North Carolina, has become a focal point in the state’s real estate market, boasting some of the highest median home prices in the region. According to recent data, median home prices in Chatham County have surpassed $600,000, reflecting a significant upward trend that stands out on the state map. As new construction projects flourish and demand outstrips supply, the county’s housing market reflects broader trends and local peculiarities that are reshaping its economic landscape. I sat down with local real estate agent, Eric Andrews and we explored the driving factors behind Chatham’s real estate pricing boom, the challenges it faces, and its impact on the community.

Chatham’s Real Estate Market at a Glance

The median price for homes in Chatham County has skyrocketed to over $600,000 as of May 2024, marking it as one of the counties with the highest appreciation in residential real estate across North Carolina. This represents a significant jump from the state’s median sales price of $367,000. Factors such as limited wastewater capacity, the prevalence of large lot sizes, and an influx of high-end new construction have all contributed to this sharp increase in property values.

Understanding the Market Dynamics

The New Construction Boom

One of the primary reasons for the high real estate prices in Chatham County is the surge in new construction. Eric Andrews, whom I would consider a seasoned real estate expert in the county, highlighted that the majority of these new homes are larger and more luxurious than the state and national averages. “We’re seeing homes that are 3,000 to 5,000 square feet, with some even reaching 7,000 to 8,000 square feet,” Andrews explained. The average new home in Chatham is about 2,400 square feet, compared to the national average of 1,600 to 1,800 square feet.

The Role of Lot Sizes

Chatham County’s larger lot sizes also play a crucial role in driving up home prices. Unlike urban areas such as Cary, Raleigh, and Chapel Hill, which have smaller lots and denser housing, Chatham offers expansive properties that appeal to buyers seeking more space and privacy. “Our lots are much bigger, and that adds to the cost,” Andrews said. This trend is particularly evident in high-demand areas like the Mann’s Chapel vicinity and the Briar Chapel community.

Infrastructure Constraints

Infrastructure limitations, particularly regarding wastewater capacity, have further compounded the housing supply issue. Pittsboro and Siler City, two of the county’s key towns, are currently grappling with inadequate wastewater treatment facilities, restricting the development of new housing projects. This bottleneck is expected to be resolved in the coming years, potentially easing some of the pressure on housing availability and affordability. However, until these improvements are in place, the market remains tight.

Comparative Analysis with Other Regions

The Magic Crescent and Beyond

Chatham County’s real estate appreciation stands in stark contrast to other parts of North Carolina. While areas like Wilmington and Asheville are also experiencing growth, many rural mountain and agricultural regions are witnessing a decline in property values. This phenomenon, sometimes referred to as the “Magic Crescent,” the area of the state running from the Triangle, through to the Triad and down towards Charlotte, highlights the disparities between different areas within the state.

“The areas with the darkest colors on the real estate appreciation map, indicating the highest price increases, are typically those with robust economic activity and population growth,” Andrews noted. Chatham County, with its strategic location and increasing desirability, fits this pattern.

Impact of Regional Developments

Major developments in nearby regions are also influencing Chatham’s market. For instance, the massive Wolfspeed semiconductor plant in Siler City and the potential establishment of other large-scale industries are expected to bring significant economic benefits and increased demand for housing. “We’re going to see some big changes in areas like Pleasant Garden and Liberty as well,” Andrews predicted.

Economic and Social Implications

Affordability Challenges

The soaring real estate prices in Chatham County have sparked concerns about affordability. While high-end new constructions are proliferating, there is a noticeable gap in the availability of affordable housing. “It’s really hard to get under $200 a square foot right now,” Andrews remarked, highlighting the challenge of constructing homes that are within reach for average-income families.

Even in outlying areas like Goldston, where prices were expected to be more reasonable, new homes are selling for upwards of $400,000. This trend raises questions about the future of affordable housing in the county.

Potential Solutions

To address these issues, local authorities and developers are considering various strategies. Infill development, which involves building on vacant lots within existing communities, is one approach being explored. This could help increase housing density and provide more affordable options without the need for expansive new developments.

Additionally, improving wastewater infrastructure in Pittsboro and Siler City could unlock new areas for development, easing some of the supply constraints. “Once the sewer situation is under control, we could see more affordable housing projects,” Andrews suggested.

The Role of Free Market Dynamics

Despite the challenges, Andrews expressed optimism about the future. “What I love about free market capitalism is that if there’s a need for a product, someone will come in to supply it,” he said. This belief underscores the dynamic nature of the real estate market, where high demand and limited supply can spur innovative solutions and new investment opportunities.

The Future of Chatham County’s Real Estate Market

Sustainable Growth and Development

Looking ahead, Chatham County is poised for continued growth and development. The ongoing expansion of infrastructure, coupled with strategic planning and investment, is expected to sustain the upward trajectory of the real estate market. However, maintaining a balance between high-end developments and affordable housing will be crucial to ensuring the county’s economic and social wellbeing.

Community Impact

The real estate boom has significant implications for the community. On the one hand, rising property values can increase wealth for existing homeowners and boost the local economy. On the other hand, it can also lead to displacement and affordability issues for long-term residents and lower-income families.

Local officials and community leaders are aware of these challenges and some are working to create a more inclusive and sustainable housing market. Initiatives to promote affordable housing, improve infrastructure, and attract diverse economic opportunities are all part of the broader strategy to manage growth in a way that benefits all residents.

Navigating the Future

Chatham County’s real estate market is experiencing unprecedented growth, with median home prices reaching new heights. While this surge reflects a thriving local economy and increased desirability, it also underscores significant challenges related to infrastructure and affordability. Addressing these issues will be crucial in ensuring that Chatham County remains a vibrant and inclusive community as it continues to grow.

As it navigates this period of rapid growth and transformation, the focus must remain on creating a balanced and inclusive housing market. By addressing infrastructure constraints, promoting affordable housing, and leveraging regional economic opportunities, Chatham County can continue to thrive while ensuring that its benefits are shared broadly across the community.

Watch conversation on YouTube – Median real estate prices in Chatham are among highest in North Carolina – 6.19.24

Chatham County Real Estate Market: Top Appreciating in North Carolina – May 2024 Update

00:16 Chatham real estate prices show variation

  • Light blue to dark blue areas signify increasing median prices
  • Tan reddish brown and darker areas indicate decreasing median prices

02:25 Chatham County has the highest appreciating housing in North Carolina.

  • Median home prices in Chatham County have surpassed $600,000 in May.
  • New construction and larger lots contribute to the higher real estate prices in the county.

04:38 Chatham real estate prices are high due to larger home sizes and limited wastewater capacity.

  • Chatham homes average 2,200+ square feet, 33% larger than national average.
  • Lack of wastewater capacity in Pittsboro and Siler City contributes to tight market and higher prices.

06:34 Private communities impact real estate development costs significantly

  • Homes in private communities require costly infrastructure for water and sewer systems.
  • Property prices escalate due to expenses related to running water and sewer services.

08:29 Real estate prices in Chatham are soaring due to high demand

  • Homes are currently priced at around $200 to $300 per square foot
  • With infrastructure improvements, affordable housing opportunities may arise through infill projects

10:14 Real estate prices in Chatham are high

  • Rising demand for land due to tax incentives, eminent domain, and infrastructure development
  • Influx of jobs and new businesses impacting the area

12:00 How to approach real estate prices in Chatham, NC

  • Specialization in land concentration and seller representation
  • Uncertainty about interest rate movement and advice on buying now

13:52 Real estate prices in Chatham county are among the highest in North Carolina

  • Rural and agricultural areas in other counties offer lower prices but lack amenities like shopping centers, hospitals, and schools
  • Declining population in rural areas leads to closure of medical offices, requiring residents to travel further for healthcare