December 27, 2021

Raleigh Q3 Multifamily Market Report: Rapid Absorption of Units Fueling Robust Rent Gains

Highlights:

Image

Heightened absorption of apartment units in Raleigh-Durham is fueling the local multifamily market, with vacancies tightening and rents spiking. The surging property fundamentals have fueled the investment market in recent quarters, with very rapid activity recorded during the third quarter.
Vacancy fell 130 basis points to 3.5 percent during the third quarter. Year over year, the rate has declined 210 basis points. Vacancy has nearly been trimmed in half after largely holding steady at around 6 percent in recent years.
Tightening vacancy and a rapid pace of absorption have driven significant spikes in rents. Year over year, asking rents are up 19.5 percent at $1,467 per month.
The investment market gained momentum during the third quarter, with sales outpacing the total for the entire first half of the year. Year to date, the median price is approximately $176,700 per unit, although in recent transactions the median price topped $212,000 per unit. Cap rates have averaged 3.9 percent.