Scott Roylance, Division President, Meritage Homes

Invest: spoke with Scott Roylance, division president of Meritage Homes, about the Raleigh-Durham housing market, buyer sentiment, affordability, and the region’s long-term growth outlook. “From the homebuilding and residential construction industry, we need to be deliberate about making sure we are building new communities in locations where consumers want to live,” Roylance said.

How would you characterize the state of the Raleigh-Durham housing market, and what stands out most compared to previous cycles?

I would consider the market challenged. We are seeing overall positive employment growth, but the growth is lower than in previous years. We have also seen a higher number of new, open communities than in the previous four or five years.

That creates a supply and demand dynamic. Everyone is working harder than ever to attract consumers and get them through our doors to make the right sales.

What are you seeing from today’s homebuyers in terms of affordability concerns, purchasing behavior, and overall expectations?

Several years ago, in 2022 and even into 2023, we regularly had buyers walk in the door who were well-qualified, confident in their current and future employment status, and not as concerned about monthly payments.

Today’s buyers are more focused than ever on job security, their current employment situation, and their future employment outlook. Monthly payment remains their top concern.

We are seeing a shift in buyer behavior, buyer demand, and a more cautious employment outlook from the consumer. These factors combined create less confidence than what we experienced over the past market cycle.

What are the obstacles to increasing housing supply, and what steps could help address those challenges?

It starts with land and entitlements with municipalities. 

We are still seeing drastically elongated entitlement cycles. Rezonings, site plans, and construction document approvals are taking longer than they ever have across municipalities.

Time is equal to expense. The cost to get through municipal approvals is taking longer and costing more, and that is driving up the cost of housing in the Triangle region.

Does the Triangle’s growth continue to build a healthy pipeline of potential homebuyers, and where do you see the greatest opportunities?

The good news is that we are still seeing positive demographic growth in the Triangle. We are still seeing local in-migration, which is fantastic.

Buyers are drawn to the Triangle for its quality of life. From the homebuilding and residential construction industry, we need to be deliberate about making sure we are building new communities in locations where consumers want to live.

There is always a trade-off between density, product type, and affordability. We need to continue refining that equation to make sure we are delivering a product that consumers are excited about, that they want to invest in, and that is in locations where they want to live.

There has always been a healthy tension between homebuilders and municipalities around what we are trying to build and deliver versus what they want us to deliver.

What role does attainable housing play in the Triangle’s ability to continue attracting employers, retaining talent, and supporting long-term economic growth?

I think it is one of the key issues. The Triangle has had heavy in-migration, and for the past decade, we have had some of the highest population growth in the country because of the quality of jobs, but also the quality of life.

That has made the region attractive for major employers. They want to invest in the Triangle and bring people here because they can have employees who enjoy their quality of life.

If the Triangle market becomes more expensive, some of its quality of life advantages begin to erode. That can make the region less attractive to employers over time and is something we should all be mindful of. One of the Triangle’s greatest strengths has always been its combination of high quality of life and relatively affordable cost of living.

When you look at the future of the Triangle, what gives you the most confidence about the region’s continued growth and competitiveness?

It starts with the education of the workforce. We are fueled by the three universities: NC State, Chapel Hill, and Duke. There has also already been a big job investment presence in Research Triangle Park. The synergies are already here. That will allow this market to continue to mature and attract well-educated, top-end talent that wants to enjoy a good quality of life.

What trends are shaping the Triangle’s real estate market?

The Triangle market is uniquely situated because of the combination of a high-quality lifestyle with well-paying jobs. We are seeing the average household income continue to climb. Even though employment numbers are moderating, they are still healthy against the backdrop of the overall economic climate. 

We also continue to see healthy immigration into the Triangle. The biggest challenge really is working with municipalities on quicker entitlement timelines and delivering product that can provide attainable living for the next generation.