The Triangle’s rapidly improving housing market in recent months has led to the appearance of phenomena not seen in years, including bidding wars and radio ads touting house-flipping strategies.
Another resurfaced last week when Wake County school administrators said their school-building plan was being complicated by competition for scarce land. Wake has identified where it would like to build 36 new schools, but it has not yet secured land for 19 of them.
“The difficulty in finding 20 usable acres in Wake County is hard enough, let alone 60 acres for a high school,” school board member Bill Fletcher lamented.
Wake, as it did in the years prior to the housing bust, now finds itself competing with deep-pocketed builders in some of the hottest markets – such as western Wake, where the school system wants to build seven schools.
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Homes have been selling at such a fast clip in Cary, Apex and Morrisville that the area now has less than a 16-month supply of single-family lots, according to Metrostudy, a research firm that tracks Triangle housing trends. That’s a crucial threshold because it typically takes about that time for builders to do the necessary work to get land to the point where construction can begin.
“The slices of the pie are getting smaller,” said Jay Colvin, Metrostudy’s regional director for the Triangle and the Triad. “You’ve got so many folks that need land, and they need lots.”
Colvin said many builders are now rushing to put land under contract and then running the numbers to see if projects make financial sense.
The predicament for Wake school officials is made more challenging by the characteristics of the Triangle’s residential construction market.
The top 25 builders in the Triangle now account for about 65 percent of all new home starts in the region, according to Metrostudy. While that figure has risen slightly in recent years, it’s still well below the 85 to 90 percent levels found in most other markets around the country.
The Triangle’s lower percentage reflects the fact that, while there is an abundance of land here, it remains difficult to assemble large tracts of it. Massive residential developments such as Wakefield and Heritage, where developers can carve out sites for new schools, are the exception, not the rule.
The region is now rife with builders looking to buy 50 or 60 acres and then slowly develop a couple hundred homes on the property. Since the school system is looking for similar-sized parcels, it is now bidding against these buyers.
While it may surprise some that Wake is having trouble finding land so soon after the housing bust, it shouldn’t.
Wake County and the Triangle continued to add residents during the recession when builders stopped buying raw land and building houses. This created pent-up demand that has helped accelerate the recovery – particularly in pockets of the Triangle such as western Wake.
If this region’s economy continues to grow faster than most other areas, the migration of families here is sure to accelerate.
This makes it crucial that the county get out in front of the growth and avoid getting into bidding wars with groups that it should be partnering with. Schools are a key factor in the success or failure of residential communities, which means builders have a vested interest in helping the county find suitable sites near their projects.
The county also needs to become more nimble so that it can identify and quickly close on properties that fit its needs.
It remains to be seen whether proposed legislation giving Wake commissioners control of school construction would improve or worsen the land acquisition process. The bill, which has already been approved by the state Senate, allows school officials to request where they want schools to be built but leaves the final decision to county commissioners.
One thing is certain: The challenge of finding affordable school land in Wake isn’t going away, no matter who’s in charge.