Recently, I had a conversation with Robbie Perkins, partner at NAI Piedmont Triad and candidate for Greensboro mayor. He possesses expert insight and highlighted important trends in the overall Triad and North Carolina real estate markets.
Our conversation reinforced what I’ve heard many industry professionals express — North Carolina’s real estate market is in high demand due to the economic forces of population and job growth.
As we look ahead to 2025, several trends are worth noting for potential impact to real estate developers, investors, and public policy.
North Carolina is attracting major employers across diverse industries, from technology to advanced manufacturing. With a steady flow of new residents arriving daily, they are seeking employment and keeping demand for housing strong. However, new apartment supply is facing headwinds, many middle-income workers may struggle to find affordable housing.
According to recently conducted research, North Carolina is facing a significant housing inventory gap — and addressing the shortage could drive $489 billion in economic activity and nearly 2.2 million jobs.
Despite an unprecedented opportunity to meet the needs of a growing population, new apartment construction in North Carolina will remain sluggish. Rising land prices, inflated construction costs, and interest rates make ground-up development financially unfeasible in many areas. Many developers have delayed or scaled back their plans for constructing new units. Industry insiders are predicting rents to rise 10-15% — further squeezing household budgets.
This imbalance between job creation and housing supply hopefully pressures local and state governments to explore zoning and permitting reforms.
One promising solution that Robbie and I discuss is converting vacant office buildings into residential units. Many offices went dark during the COVID era shift to working from home. Cities such as Winston-Salem are experiencing an after shock, with a historically high downtown office vacancy at nearly 40% after Wells Fargo vacated 700,000 square feet.
Adaptive reuse of office buildings into multifamily is a win-win: It lowers market vacancy rates while addressing critical housing demand. From the developers point of view — renovating an existing building with “good bones” will reduce cost and risk to produce housing. However, these projects will depend on municipal support. Cities must consider offering tax credits, grants, or zoning adjustments to encourage these conversions. Without governmental partnership, many of these projects will remain financially challenging.
Hurricane Helene devastated western North Carolina and communities won’t recover without public investment in critical infrastructure — water, sewer, and bridges — are required to revitalize the area.
While government investment is crucial, the private-sector role is just as significant. Developers, contractors, and investors can remodel, restore, and renovate damaged buildings while new construction kicks off. Government at all levels must align — local, state, and federal. Permitting, rainy day funds, and national disaster relief all need to be expedited.
Artificial intelligence is expanding at an unprecedented pace, and President Trump recently announced a $500 billion vision for expanding data-center infrastructure in the country. These facilities, often exceeding 1,000,000 square feet, require vast amounts of land, electricity, and water — resources that North Carolina’s rural areas are well-positioned to service.
This wave of development presents a massive opportunity for rural economies. Counties that can offer strategic locations with viable infrastructure will see a boost in land values and job creation.
North Carolina’s real estate market is strong with a bright future ahead. While job growth and economic expansion continue to power demand for housing, supply-side constraints, rising costs, and shifting market dynamics require innovative solutions.
Whether it’s repurposing office buildings, supporting rural development, or investing in storm recovery efforts, public and private collaboration will be essential in shaping the future of real estate in the state.