Fayetteville’s housing and rental market, by the numbers

Affordable housing is a long-standing issue in Fayetteville, with rental and single-family home prices continuing to climb into 2024. That’s according to Fayetteville’s Economic and Community Development Department, which presented data about the local housing market at Thursday’s Fayetteville City Council meeting. 

Here are key findings from the report: 

Apartments

Fair market rent, as determined by the U.S. Department of Housing and Urban Development, is the cost of a moderately-priced rental unit in the local housing market. In Fayetteville, fair market rent is higher than 91% of the state and the nation. This means that Fayetteville renters are paying much more for rental units than what would be considered fair market value in other areas, taking into consideration factors like median income, said Economic and Community Development Department Director Chris Cauley. In Fayetteville, the median income is $56,685, according to the U.S. Census data.

• Since 2015, fair market rent for apartments in Fayetteville has consistently increased, but the greatest increases have occurred within the last year. For example, the average rent for a studio, one-bedroom, two-bedroom and three-bedroom apartment each increased about 25% in Fayetteville between 2023 and 2024. 
• The fair market cost of renting a two-bedroom apartment in Fayetteville this year is $1,292; it was $1,037 in 2023. For a one-bedroom unit, the fair market cost this year is $1,120; it was $898 last year. 
• Moreover, while demand for apartments is increasing, new construction is still outpacing that demand, leading to an 8% vacancy rate, which is slightly higher than the industry standard of 7%. The largest demand is for high-end apartments with community amenities, according to Cauley’s report.

“Demand for departments is accelerating, but new supply for apartments is outpacing that demand,” Cauley said. “So in a perfect world, when supply is greater than demand, costs go down. That’s not happening [here].”

Cauley said that while rents are increasing nationally, Fayetteville’s above average costs are most likely a result of increases in basic housing allowances for the military. He noted that the housing allowance for the common “E-4” rank, for junior enlisted officers with no dependents, is almost $1,400 a month. That likely has “severe influence” on fair market rates set by local landlords, he said. “So if I’m running an apartment complex at market rate, I know where my floor for rent is right there.”

Homes

Like rental costs, prices of single-family homes in Fayetteville have been rising in the past few years. Since 2021, the median sales price of homes have gone up by about 54%. 

• The median sales price of a single-family home in Fayetteville was $239,000 in August 2024. In 2021, the median sales price was $155,000. 
• A significant portion of homeowners in Fayetteville are also “cost burdened”, Cauley said, meaning they spend more than 30% of their income on housing costs. This is particularly true for those with mortgages, with 30.1% of Fayetteville homeowners being cost burdened. In comparison, 17.60% of the city’s homeowners with no mortgage are cost burdened. 
• In 2024, homes were sold after a median of 22 days on the market, though that number has dropped down to 11 days for August 2024. The lower the number of days on the market, the more pressure there is for buyers to make higher offers, Cauley said.  

These increased costs come as the “number of homes for sale has gone up tremendously since 2021,” Cauley said. In 2021, there were 390 homes for sale. As of last month, there were 1,390 homes for sale in Fayetteville. More homes for sale means more choices for buyers, Cauley said, which in turn means sellers have to compete with each other to attract buyers (such as by lowering prices).

Despite the affordability challenges that homeowners have faced in the past few years, the increase in supply indicates “positive trends” in the overall health of the market, Cauley said — the return to equilibrium after years in a seller’s market. 

In real estate, months of housing supply is an indicator of the balance between supply and demand in the real estate market, with a lower number suggesting a seller’s market and a higher number indicating a buyer’s market, according to the National Association of Realtors. Five to six months of housing supply is considered healthy, Cauley said, and Fayetteville is getting closer to that metric. In August 2024, the city reached an average of 4.10 months of housing supply.

“Now, what that means is that we’re moving a little bit more towards equilibrium in the market,” Cauley said. “Five to six months [of supply] means that it’s neither a buyer nor a seller’s market, so we’re still in a little bit of a seller’s market right now.”

To download the full report, click here.

Contact Evey Weisblat at eweisblat@cityviewnc.com or 216-527-3608. This story was made possible by donations from readers like you to CityView News Fund, a 501(c)(3) charitable organization committed to an informed democracy in Fayetteville and Cumberland County.