Raleigh-Durham Q4 Multifamily Market Insights: Renter Demand to Fuel New Construction in 2022

Highlights:

  • The Raleigh-Durham multifamily market gained momentum in 2021, with rents posting sizable gains and vacancy dipping to the low-4 percent range. With property fundamentals improving, investment activity surged, particularly in the second half of the year.
  • Apartment vacancy trended lower through the first three quarters of 2021 before rising 70 basis points in the fourth quarter. The rate ended the year at 4.2 percent, tightening by 170 basis points in 2021.
  • Rents climbed more than $250 per month in 2021, although the pace of increases cooled in the fourth quarter. Asking rents rose 20.7 percent in 2021, ending the year at $1,478 per month. Additional increases are likely in 2022, although the pace of growth will be more modest.
  • The investment market remained active during the fourth quarter, with sales activity matching levels from the previous quarter. The median price for the year was $200,500 per unit, nearly identical to the median price in 2020. The median price rose late in the year; in transactions during the fourth quarter, the median price reached $228,000 per unit while cap rates compressed to 3.6 percent.

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