Raleigh Multifamily Report – Summer 2020
With the metro's economy relatively well insulated going into the downturn, rent growth was already rebounding at the end of the summer.
Raleigh rent evolution, click to enlarge
The Raleigh-Durham multifamily market has historically been resilient to downturns. Although stay-at-home orders, significant job losses and tightening bank policies at the onset of the crisis have shaken the metro’s economy, the metro showed signs of resilience this summer. Rents inched up 0.2 percent on a trailing three-month basis through August to $1,223, while the national rate remained flat.
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Raleigh sales volume and number of properties sold, click to enlarge
Raleigh’s unemployment rate hit 11.5 percent in May, but that figure had dropped to 8.0 percent by July, according to preliminary data from the U.S. Bureau of Labor Statistics. All employment sectors contracted in the 12 months ending in June, but small businesses that lost revenue due to COVID-19 were eligible to receive support through Wake County’s $5 million Wake Forward program. Moreover, Duke University announced a $100 million investment in Research Triangle Park for an expansion of its school of medicine, in addition to several private sector investments prompted by the pandemic.
Almost $736 million in multifamily properties traded in Raleigh-Durham in the first eight months of 2020. While the Triangle was not immune to coronavirus-related headwinds, the apartment market’s performance remained relatively stable. Going forward, Raleigh-Durham is likely to benefit from investors’ appetite for less dense metros with strong talent pools.
