December 27, 2021

Charlotte Q3 Multifamily Market Report: Vacancy Hits Decade Low, Rents on the Rise

Highlights:

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Demand was the prevailing theme in the Charlotte multifamily market in the third quarter. Renter demand caused vacancy to tighten and rents to spike, while investor demand is yielding rising prices and falling cap rates.
Vacancy fell 30 basis points in the third quarter, dipping to 3.7 percent. The rate is down 110 basis points year over year and is at its lowest point in more than a decade.
Rents continue to push higher; asking rents ended the third quarter at $1,460 per month, up 17.6 percent from one year ago. Rent growth in 2021 is forecast to total nearly 20 percent.
Absorption totaled more than 4,300 units during the third quarter, and year to date, absorption has outpaced new construction by nearly 40 percent.
The pace of investment activity remained elevated during the third quarter. With more properties trading, prices have pushed higher and cap rates have compressed. The median price year to date is approximately $220,000 per unit; in the third quarter, the median price reached $255,000 per unit. Cap rates have dipped to 3.8 percent.