Charlotte’s Supply Impact Has Been Dispersed but Concentrated

Just about every submarket in Charlotte is dealing with supply pressure, but the areas really feeling the supply pinch are substantially more impacted by development. Charlotte ranks as the nation's fifth-most "dispersed but concentrated" supply market. We reached that conclusion by taking a standard deviation of submarket-level supply growth by metro (basically interquartile ranks) to see what areas are most vs. least uniform. Charlotte's inventory growth since 2020 (36%) ranks #2 behind Austin (38%) and ahead of #3 Nashville (33%).  Yet, Charlotte's average effective rent today ($1,544/month) is less than $100 off (down about 5%) from its peak rate from 2022. By comparison, Austin rents are $400 off the peak (down considerably, more than 20%). Nashville on the other hand saw a similar 5% drop from its 2022 peak, mirroring that of Charlotte. This may be a bit of a double-edged sword going forward. While you may not have one or two big submarkets bogging down the MSA's overall performance (i.e., a recovery will need to be more uniform), the fact that Charlotte has maintained some degree of stability in light of all submarkets getting aggressive supply growth suggests robust demand durability in metro Charlotte.