Multifamily Absorption Elevated, Closely Tracking Supply Growth in Charlotte

After showing signs of improvement during the first half of 2025, asking rents have declined and the vacancy rate has trended higher in recent months. Heightened renter demand had offset robust inventory growth for several quarters, but ongoing deliveries ultimately led to an eventual rise in vacancy. The vacancy rate rose 50 basis points during the third quarter to 8.2%. Despite the increase, vacancy is flat year over year. Year to date, projects totaling more than 13,600 units have come online, while apartments recorded net move-ins for more than 11,500 units during the same timeframe. The South End posted the strongest absorption in Charlotte in recent quarters, keeping pace with an inventory expansion of roughly 25% during the past year. Since the third quarter of 2024, South End apartments in Charlotte have absorbed more than 2,500 units. Overall asking rents are down 1.3% year over year, as maintaining occupancy amid elevated new supply has taken precedence over rental growth.

The pace of sales in the Charlotte multifamily investment market has declined to this point in 2025 after returning to trend last year. Total sales during the past nine months are below levels recorded in the same period of 2024 by 16%. While activity is down, pricing has trended higher. The median sale price is $225,600 per unit year to date, up 28% from last year. Although the recent increase is steep, last year’s median price remained below recent norms. The transaction mix has shifted towards newer properties, with 2020s vintages now accounting for more than 45% of year-to-date sales. These new builds are predominantly selling in the University, South Charlotte, and East Charlotte submarkets. The uptick in transactions for new builds in the University area has created momentum for the submarket. Total sales in the University submarket year to date in 2025 nearly match the combined totals for this area from 2023 and 2024.

Looking ahead

New development is expected to continue through the end of the year, and completions this year are expected to top 2024 levels by 38%. Additional supply growth is expected to place upward pressure on the vacancy rate, although trends will remain mixed across submarkets in the coming quarters. Development has tapered off in areas like East Charlotte, West Charlotte, North Charlotte, and South End, which may contribute to faster recoveries in these areas. In contrast, the South Charlotte and University submarkets are still experiencing significant growth, with pipelines up 37% and 51% year over year, respectively. Despite increases in a few areas in Charlotte, the overall construction pipeline has contracted significantly in recent periods. Development should slow in 2026, providing operators with some breathing room following this year’s elevated activity. Absorption rates are projected to remain elevated as employment growth continues.

Sales activity in the Charlotte multifamily investment market should accelerate to close 2025, though sales for the full year are projected to remain below last year’s levels and long-term trends. Properties built within the past few years should continue to change hands through the end of 2025 and into the coming years. Many of these new builds have sold a few years following completion, with properties delivered between 2020 and 2023 accounting for the bulk of the newer assets changing hands. Heightened inventory growth during the past two years should present investment opportunities through the end of the decade. Sales activity will likely resume in Gaston County. After a handful of properties changed hands in this area in 2024, none have done so in 2025. The vacancy rate in Gaston County is below the overall market level and has improved significantly during the past year. Additionally, rents in this area are flat year over year.

Learn more

Contact our Charlotte office for more information or download one of the reports below from our Institutional Investment Sales or Private Capital teams.