Major Carolinas Markets Deliver on Supply and Rent Growth
Despite logging big inventory growth during this development cycle, the three largest apartment markets in the Carolinas managed sizable rent growth in 2021.
Population growth has been rapid in Charlotte, Greensboro/Winston-Salem and Raleigh/Durham in recent years, but especially since the onset of the COVID-19 pandemic. This influx of renters has driven demand to multifamily product across the region, inflating occupancy rates and inspiring dramatic rent growth.
Raleigh/Durham was one of the nation’s leaders for effective asking rent growth in 2021, with an annual increase of 21.5%. Charlotte wasn’t far behind with a price increase of 19.2% in the past year, while Greensboro/Winston-Salem logged growth of 17.6%.
Annual rent growth in all these markets climbed notably throughout 2021 to reach record highs. For perspective, the rent growth in each of these markets is now performing at a pace at least three times more than the ten-year average for price increases in those areas.
Back in 2020, both Charlotte and Raleigh/Durham dipped into price cuts when the pandemic downturn pulled fundamentals down across the country. However, annual rent cuts in these markets never got deeper than 1% and operators quickly recovered within a few months. This was a much better performance than some of the nation’s coastal gateway markets, which logged steep price declines in the double digits during that time.
Solid performances in these major Carolinas markets topped off a decade of elevated apartment development in these areas. Charlotte has been the nation’s leader for inventory growth during this development cycle that started in 2010, growing total inventory over 51%. Thus, roughly half of all multifamily stock in Charlotte has been built just in the past decade or so. Raleigh/Durham was also among the nation’s biggest inventory growth markets, with a product base increase of 36.1%, while the increase in Greensboro/Winston-Salem was 18.3%, a bit ahead of the U.S. average of 17.6%.For more information on apartment performance in the Carolinas, including performance stats in smaller markets and what to expect in 2022, watch the webcast Market Intelligence: Carolinas Region.