Rental and Occupancy Increases Expected for the Queen City
- Jun 03, 2010
Charlotte, N.C.—While vacancies in Charlotte, N.C. apartments hit an all-time high of 13.6 percent in March 2010, communities have seen an increase in traffic over the last 60 to 90 days.
Vacancy in the downtown submarket is the highest, at 24.3 percent, due in part to the condo shadow market, Lisa Taylor, managing director in Greystar’s Charlotte, N.C. office, tells MHN. But this area is also achieving the highest rents, at $1.25 per square foot.
“Although private rentals remain competition for the apartment market in Charlotte, renters are more hesitant to rent from private owners, due to recent press on private rentals being foreclosed on and the renter left with little to no notice to move out,” Taylor points out.
Year-over-year (March 2009 to March 2010), rents increased an average of 0.3 percent, according to Real Data. And, notes Taylor, Charlotte home prices dropped 3.9 percent in the first quarter of 2010 over 2009, “which has created a positive environment for the rental market in Charlotte,” she says. “More would-be buyers are investing their money elsewhere and renting instead.”
Unemployment is currently just over 11 percent, according to the U.S. Bureau of Labor Statistics’ April 2010 figures, but this is a 1.0 percent decrease from the month prior. And, as Taylor notes, the city recently ranked number 16 among the country’s largest metro areas offering the best quality of life, according to a Portfolio.com study, which should certainly impact the city’s population growth in the near-term.
While there have not been any transactions in the city thus far this year, Taylor predicts, “there will be opportunity for acquisition of some REO assets in the market, and with the development pipeline down to 1,110 proposed units, we expect to see improving occupancy and same-store rental increases.”