Charlotte’s Multifamily Transactions Gain Momentum to Close 2024

Completions in the Charlotte multifamily market were elevated in 2024, as developers have been active in attempting to meet the region’s heightened demand. The Charlotte region posted peak levels of multifamily deliveries in 2024 with projects totaling more than 17,700 units coming online for the full year, a trend occurring across several high-growth markets. While completions peaked, so did net absorption, with net move-ins totaling roughly 12,900 units in 2024. The 2024 figure outpaced the combined totals from the preceding two years and also topped the region’s previous peak of 12,150 units in 2021. Renter demand was fueled by strong gains in the local labor market and the region’s population growth. Total employment in Charlotte expanded by 2.7 percent annually, well above the national growth rate of 1.4 percent, and the region’s population has expanded by 5 percent since 2020.

Activity in the Charlotte multifamily investment market ramped up in the closing months of 2024 and annual transaction volume returned closer to the region’s long-term averages after a period of very light activity in 2023. Cap rates appear to have reached an equilibrium around 5.5 percent for performing properties, and buyers are acquiring new assets in growing submarkets. South Charlotte led the way for transaction volume again in 2024, tracking trends recorded last year, and traditionally strong submarkets such as East Charlotte, Gaston County, and West Charlotte all recorded a handful of sales in 2024.  While overall pricing trended lower, the median price for Class A assets held steady while accounting for roughly 30 percent of sales in 2024; the median price for top-tier properties was $253,300 per unit.

Looking ahead

In 2024, the Charlotte multifamily market was particularly active in terms of both new supply of properties and new renter demand for apartment units. These trends are expected to persist in the coming year. On the supply side, projects totaling 15,000 units are expected to come online, representing a slightly lower total of development than during the recent peak. While the record-setting absorption totals recorded in 2024 are unlikely to repeat, there should be sufficient renter demand to support rents and keep vacancies near current levels. Demand is being fueled by a local labor market that continues to expand at a pace that is roughly double the national average. Business attraction and relocation efforts are being supported by the Charlotte Douglas International Airport, which is one of the fastest-growing airports in the country for passenger traffic.

Sales activity in the Charlotte multifamily investment market should gain momentum in the coming year as buyers and sellers appear to have aligned their expectations. Transaction volume during 2025 should surpass levels recorded in 2024, particularly if leasing volumes remain elevated throughout the market. While Class B assets should continue to make up the better part of the region’s sales mix, the recent surge in supply growth should create many opportunities for newer, Class A investments in the coming years. Since 2020, roughly 25 percent of all sales have been properties built within the past five years, and as the recent completions begin to lease-up there is a strong likelihood that many of these assets come to market and are sold.

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