Raleigh-Durham multifamily real estate market reports
Robust demand in the Raleigh-Durham multifamily market continues to tighten occupancy and push rent growth to record-setting levels. A preeminent amount of new supply is currently under construction as total inventory is expected to increase by 5.3% in the coming year. The elevated supply may soften market performance in the long term, yet rent growth and occupancy is expected to remain solid.
At the end of the first quarter, Raleigh-Durham had 15,344 units of multifamily product under construction. First quarter deliveries added only 1,663 units to inventory, with an additional 9,200 units expected to complete in the next twelve months.
In the last twelve months, net absorption totaled more than 7,300 multifamily units, up 17.2% year-over-year. The North Cary/Morrisville submarket reported the highest demand with 1,317 units absorbed.
As occupancy rates and elevated construction costs set record highs, average effective rent growth continues to soar in the Raleigh-Durham market. Annual effective rent growth on a per square foot basis reached 19%, the highest ever recorded.
Average effective rents increased to $1.52 psf in the first quarter. The average effective rate per unit reached $1,469.
As demand reaches new heights market-wide, multifamily occupancy continues to tighten, increasing by 230 bps year-over-year. With all asset classes topping 96%, Class C product reported the highest rate in the first quarter at 97.8%.
Solid economic momentum and market fundamentals led to another exceptional quarter for multifamily investment sales, with $1.5 billion in property trades. Average asset pricing reached $225,554 per unit at the close of the first quarter.
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