The Triangle startups getting a boost from the bonkers housing market

As housing prices rise to unprecedented levels in the Triangle, many homeowners have elected to improve their current dwellings instead of fronting the cash for higher mortgages – a trend that’s benefitting entrepreneurs in a big way.

Take Rachael Classi, CEO of Durham-based toy subscription service Tiny Earth Toys. With people spending more time in their homes than ever before, suddenly the idea of stepping on hundreds of little plastic parts in their living rooms is unappealing.

“We’re giving people back a lot of space,” she said. Instead of buying plastic toys, consumers can rent high quality wooden varieties and declutter, she said.

Classi isn’t alone in feeling increased demand as a side effect from a crazy real estate market. The Triangle has less than a month’s supply of available homes. In a stable market, it has six months. Home prices are up more than 20 percent over the last 12 months.

But the crunch it’s all created is actually boosting area innovators.

Here are four area startups working to capitalize on the challenge:

HomeCloud

HQ: Durham

Employees: 6

Hiring: Yes

HomeCloud, which recently raised nearly $230,000 in a pre-seed round of financing, is building what CEO George Kirkland calls “a modern take on the home inspection.”

It’s uniquely positioned to capitalize as homebuyers opt out of official inspections amid intense bidding wars. By using HomeCloud’s technology, they can be a little more confident about that choice, Kirkland said.

“Someone who is thinking about buying a home, when they go to look at the home … we will go with them and use our app to analyze the home they are viewing and by the time they walk out we can tell them if there are any major concerns,” he said. “It allows them to bid on a home with confidence.”

Exhale

HQ: Raleigh

Employees: 12

Hiring: Yes

The member-supported company aims to proactively care for homes by putting home maintenance on autopilot, essentially mitigating issues before they arise.

“We are benefitting from not just the building boom, but just the relocations to North Carolina,” CEO Matt Sheehan said. The firm works with builders, many of whom are seeing “unprecedented growth.”

But most of its members are not new homeowners. They are, however, more diligent than ever before about maintaining their home. Faced with pricing pressures that may keep them from upgrading to a new home, as well as a desire to improve their space prompted by remote work, they’re looking for solutions like Exhale, Sheehan said.

“We’re not only a maintenance company, we’re also an on-demand, almost general contractor for our members,” he said. “We are certainly helping our members upgrade their homes as well.”

Second Nature

HQ: Raleigh

Employees: 275

Hiring: Yes

Thad Tarkington, co-founder of Raleigh-based Second Nature (formerly FilterEasy), said housing trends have boosted demand for the firm’s B2B product – its “resident experience platform” targeted at property managers. Remote working has created a somewhat transient workforce – people that don’t necessarily look for the permanence of a house.

“A lot of people just long for flexibility,” Tarkington said.

They can work from anywhere – and often elect to rent instead of buy, even despite the surge in rents. Tarkington said property managers Second Nature serves are seeing unprecedented demand.

“We see a market that’s growing rapidly and we see a lot of long-term interest,” he said.

At the same time, housing prices have some people rethinking plans to buy. Instead, they’re upgrading – and taking extra good care of their current homes, boosting the firm’s consumer-focused filter subscription business.

Tiny Earth Toys

HQ: Durham

Employees: 9 (including two part time)

Hiring: Yes

Classi, CEO of Tiny Earth Toys, said the firm is seeing a surge in activity – particularly in urban areas such as the Triangle where there’s a lot of in-migration. Business is booming so much that the firm had to lease warehouse space in Raleigh to keep up.

In particular, she is seeing the demand for rental housing in the region as boosting business in the long term. People in smaller dwellings put space at a premium, she said.

“You can remove a lot of stress of clutter in your home by renting instead of owning,” she said.

Tiny Earth toys allows parents to rent developmentally-appropriate wooden toys and get rid of the plastic accumulating in the playroom – an enticing proposition as people spend more time in their homes.