Charlotte Multifamily Report – Summer 2020

Despite deteriorating fundamentals, the metro's diversifying economy is helping the rental market's resilience.
Charlotte rent evolution, click to enlarge
Charlotte rent evolution, click to enlarge

Despite the ongoing pandemic, steady fundamentals kept Charlotte’s multifamily market relatively healthy in the first half of 2020, with rent gains mirroring the national trend. The average rent in the metro contracted just 0.3 percent in the second quarter, hitting $1,193. Meanwhile, the U.S. average slid to $1,457.

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More than 1.1 million North Carolinians applied for unemployment benefits between March 15 and June 30, according to the N.C. Division of Employment Security. All employment sectors excluding financial activities and construction contracted year-over-year through May, bringing the jobless rate to 13.2 percent, according to preliminary data from the U.S. Bureau of Labor Statistics. To partly offset the effects of the health crisis, $30 million of the federal coronavirus aid bill was set aside for small businesses. Large investments are also planned for the metro. Centene, a health care administration company, intends to spend $1 billion on a 1 million-square-foot East Coast headquarters, a move expected to generate 6,000 jobs.

Charlotte sales volume and number of properties sold, click to enlarge
Charlotte sales volume and number of properties sold, click to enlarge

Transaction activity dampened notably after the pandemic hit, with deals totaling only $464 million in the first half of 2020. Meanwhile, developers delivered 2,313 units and had another 14,249 apartments under construction as of June. Considering the current economic climate, we expect Charlotte rents to contract 3.4 percent this year.

Read the full Yardi Matrix report.