Charlotte’s Apartment Market Sees Record-Breaking Developments Amid Rising Vacancy Rates

Charlotte’s Apartment Market: A Twist of Trends as the Year Wraps Up!

As the sun sets on another year, Charlotte finds itself navigating an intriguing landscape in the apartment rental market. With vacancy rates soaring to about 12.7% at the beginning of December, it seems like the city is swimming against the tide. But hold on! These numbers reveal a tale of record-breaking apartment units, strong leasing activity, and a notable shift in future development.

Record-Breaking Developments

So here’s the scoop—Charlotte saw developers roll out the red carpet for nearly 20,400 new apartment units that broke ground in 2022. This milestone set the stage for an unprecedented number of new homes, the likes of which date back to 2000! According to Chuck McShane, who knows the market like the back of his hand, around 16,110 units have made their grand entrance this year alone. That’s a big leap from last year’s number of about 13,250.

But with so many shiny new apartments up for grabs, it’s no wonder that vacancy rates are climbing. McShane points out that the availability is especially high in neighborhoods experiencing new construction. Think lower South End and north Charlotte—you might just find an array of options knocking at your door!

High Demand Still Thriving

But don’t let those vacancy rates fool you! The net absorption rate—the number of move-ins minus move-outs—tells a different story. This year has seen about 12,000 units leased, which sends a strong signal that demand is brimming beneath the surface. It’s important to note that the last time Charlotte experienced such a high absorption rate was back in 2021 when fewer options were available.

Rents Taking a Dip

The surge in supply has also sparked a pullback in rent prices. For those hunting for a good deal, the average asking price is hovering around $1,608. As McShane explains, when more units become available, landlords feel the heat and have to lower rents to attract potential tenants. Who doesn’t love a little competition in the rental market? Areas like lower South End have seen rents dip by about 4%!

Construction Slows, Demand Grows

Looking ahead, there is a noteworthy slowdown in construction. Down by about 50%, only around 9,450 units will break ground this year. Less construction usually hints at a future drop in vacancy rates, increased demand, and ultimately, rising rent costs. The math is simple—fewer units on the market means clambering for the spots available. McShane describes this cycle as an “ebb-and-flow thing.”

Although 2022 was indeed the golden year for groundbreaking, Charlotte isn’t hitting the brakes completely. Exciting projects like the River District, Eastland Yards, and developments along Providence Road will keep popping up on the radar through 2028.

The Big Picture

What truly stands out is that Charlotte is experiencing a steady inflow of residents—about 117 people moving to the city every single day. With these numbers steadily climbing, the discussion of excess supply and high vacancy isn’t likely to stick around for long. McShane predicts that the demand will surge once more, transforming the current state of affairs into a thriving rental market by 2026 or 2027.

As we bid adieu to yet another year, all eyes are on Charlotte, as this amusing story of vacancies, demand, and rents wrestles for the spotlight. The dynamics of this fast-paced city always seem to keep everyone on their toes!