The real reasons for price appreciation are multi-fold:
1) Increase in population.
2) Increase in income.
3) Decrease in land/house supply.
4) Favored depot for new immigrants.

1) is true, but that increase in population is only shown larger because the base to calculate that percentage is small. Total RTP population is less than one county around DC region. That’s why it shows high increase rate, but that’s superficial. To say more directly, if you consider absolute number of job increases, Raleigh is not even on the radar screen of hot spots. For the last 5 years, DC is undeniably the king in job creation, even higher than Silicon Valley. Most of the price appreciation is thus justified.

2) Even if 1) is true, increase in pay is questionable, the pay is lower in Raleigh/RTP as compared to California and DC regions. However, Raleigh boosts a high concentration of IT jobs. IBM, Cisco, Erickson,…, almost all name brand companies have a campus there. But for some reasons, RTP failed to recreate itself into another Silicon Valley. VC activities are not hot. Since the early thrust in the last 10 years, the pace is slow down and becoming stagnant lately. One possible reason is that labor cost is increasing, making it less desirable as new relocation destination. The very reason this old farming town got developed into a prominant place was not for its geographical convenience, but for its low cost and low tax. Companies relocated some of the operations here to cut cost. This region may have hit its limit in development for the short and mid term.

3) Now the key problem is this. Zoning law is relaxed, there seems to be no limit to new development. NC is more and more looking like Dallas for its ability to expand laterally without bound. This is in stark contrast with DC region where new development in close-in counties are extremely hard. If you visit Cary, and you will see over-supply of new houses everywhere.

4) Now a less significant factor, Raleigh is so far not a gateway city for new immigrants. It may be a favored spot for middle class IT professionals, but immigrants have found this region less appealing. Hot real estate spots all appear to be major immigrant depots too. Because a major driving force for price appreciation is coming from new immigrants. BTW, DC area has developed into a gateway city.

Summary, with only 1) alone, fast appreciation is not possible. The region must have 4 factors working together to make another Boston or DC or NYC. Otherwise, it’s simplay another Atlanta or Dallas.

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What’s the key ingrediants for fast price rise when looking at a place?
I summarized many characteristics in the above post. Now, let me dig it a little further. Like the common saying in RE industry, location, location and location. What characters a city must have to sustain long-term above-average price appreciation? I found that it must have something to do with water. Let’s look at all the great cities which kept doubling in value for the last 50 years, all appear to be near ocean, or having a very efficient international port operation. Ease of import/export trades appear to be a pre-requisite for the city to join this club.

Port cities:
Boston,
NYC,
SF Bay,
LA,
Washingon DC (because of Baltimore), DC is a little unique because of its political power.

From the above list, all the port cities enjoyed faster than average price appreciations. DC is a late member of this club.

From the same logic, I don’t think the following non-port cities would have the same fate:
Atlanta,
Dallas,
Raleigh,
Chicago

So, which city has port but has not joined the club?

I know the answer, you can guess

That city will have faster than normal appreciation rate, therefore it will be a best investment destination. We will see that in the next 10-20 years.

Two possible runner-up to the millionare’s club:
1