Apartment Demand Hits All-Time High in Raleigh

  in   Raleigh

U.S. apartment demand looked downright strong in 2023’s final quarter. And while many major markets posted absorption tallies far higher than pre-pandemic norms, Raleigh/Durham stood out among even the strongest performers.

Raleigh/Durham absorbed 2,886 units during the October to December time frame. That rate was more than triple the market’s 10-year average for 4th quarter apartment demand of roughly 930 units. And the recent tally was more than 2,300 units higher than the pre-pandemic 10-year average (from 2010 to 2019) of 525 units.

Such strong 4th quarter demand propelled annual absorption to 8,709 units across Raleigh/Durham in 2023, marking a top 10 performance among the nation’s 50 largest apartment markets, according to data from RealPage Market Analytics.

Raleigh/Durham’s total demand in 2023 marked a tremendous improvement from annual absorption of about 600 units recorded in 1st quarter 2023. It also registered as market’s strongest annual demand tally since RealPage began tracking the market in 1995.

Across neighborhoods, all but one of Raleigh/Durham’s 12 submarkets recorded some level of demand in 2023. Only Northwest Raleigh recorded mild net move-outs from just 87 units, while concurrently no new supply delivered there. Absorption was strongest in Northeast Raleigh (1,695 units) and Central Raleigh (1,347 units) with both markets accounting for over 15% of the market’s total annual demand. Far North Raleigh (1,156 units) and Southeast Raleigh (1,082 units) were the other two markets to clear the 1,000-unit demand threshold.

Still, even record demand fell well short of the high level of concurrent supply. In 4th quarter 2023 alone, nearly 3,900 apartment units delivered in Raleigh/Durham, taking annual deliveries to 11,566 units – a 28-year high. Among submarkets, Central Raleigh was the supply leader, adding just shy of 2,000 new units in 2023. Northeast Raleigh (1,772 units), Southeast Raleigh (1,380 units), Far North Raleigh (1,379 units) and Near North Raleigh (1,152 units) also contributed heavily to the market total.

Supply across Raleigh/Durham is set to increase over 50% in 2024 with the expected addition of over 18,000 units. All of Raleigh/Durham’s 12 submarkets are scheduled to receive at least 400 units of new supply in 2024. Southeast Raleigh and Central Raleigh are both expected to receive about 3,000 new units in 2024.