Strong population growth in many of the region’s metropolitan areas has led to a multifamily construction boom in the Southeast. Developers completed 35,031 units in the region in 2019, according to Yardi Matrix—the highest level of deliveries this cycle. Despite the number of new apartments coming online, vacancy held steady throughout the region, falling only 10 basis points between December 2018 and 2019. Rental development activity will continue even stronger through 2020, with some 48,000 additional units anticipated to come online by the end of the year.
While Atlanta led the pack in terms of total new units completed, some of the region’s smaller metros grew at a far faster pace. Utilizing data from markets in Yardi Matrix’s Southeast region, the table below showcases the top five metros for multifamily deliveries as a percentage of total stock.
With the market rapidly growing in importance, both as a major employment and industrial hub, Atlanta’s population has expanded at a rate roughly double the national average. The metro gained nearly 90,000 new residents in 2017, and this trend is expected to continue: The Atlanta Regional Commission forecasts the wider metro will grow by 2.5 million people in the next 20 years.
Developers took note of Atlanta’s booming population growth. Deliveries in 2019 totaled 10,733 units, accounting for 2.5 percent of the market’s inventory—a 16.5 percent increase from 2018. RangeWater Real Estate’s completion of The Bishop, a 425-unit community near the Perimeter Center, was the largest project that wrapped up in 2019. The new year is taking shape to be even more active. Of the metro’s nearly 19,500 units under construction at the beginning of the year, more than 16,500 are anticipated to deliver by year-end, with several other major mixed-use projects completing soon after.
4. Raleigh-Durham, N.C.
The Triangle’s multifamily market continues to expand, buoyed by strong employment growth amidst corporate relocations and expansions. Raleigh-Durham’s unemployment rate fell to 2.9 percent in December, its lowest point since late 2000 and 60 basis points lower than the national average. As people have flocked to the metro, rents have risen accordingly: Rents in the market grew by 4.3 percent year-over-year through December, faster than the 3 percent national rate.
Raleigh-Durham’s deliveries in 2019 totaled 5,241 units, 3.4 percent of the metro’s multifamily inventory. Three Morrisville projects completed during the year, adding 881 units—the highest amount of new inventory among submarkets. Rents in Morrisville averaged $1,320, or $100 above the market average. The largest completion in the submarket occurred in April when a joint venture between Woodfield Investments and Goldman Sachs delivered The Aster, a 493-unit luxury community. In August, the developer sold the property to KETTLER for $119 million.
3. Charlotte, N.C.
The strength of Charlotte’s multifamily market is related both to its growth as a diversified economy and a rapid influx of young people. The metro added more than 28,000 jobs across a variety of sectors in the 12 months ending in September. While the banking sector—long Charlotte’s mainstay—is still important, education, health-care and hospitality jobs made significant gains, with future growth on the horizon in the city’s burgeoning fintech sector.
Developers completed 8,264 units in 2019, accounting for 4.3 percent of total stock. Charlotte’s development scene has been extremely active in recent years: Since 2015, the market’s total inventory has increased by more than 25 percent. As a result, the metro’s occupancy began to decline, dropping to 94.9 percent in December—20 basis points below the national average. Although demand remains strong, with upwards of 10,000 units slated for delivery in 2020, expect to see Charlotte’s occupancy continue to decrease.
2. Charleston, S.C.
The Charleston economy continues to pick up steam, building off strong growth in shipping traffic at the Port of Charleston. In 2019, cargo traffic hit record levels, due in part to the Panama Canal’s newly expanded capacity and a $1.6 billion overhaul to the port’s equipment and infrastructure. In addition to its booming industrial sector, the metro’s emerging tech sector is also driving its rapid population growth. An average of nearly 30 people moved to the market each day in 2017.
Both investors and developers showed interest in Charleston’s multifamily sector in 2019. Transaction volume hit $890.8 million last year, an increase of one-third compared to 2018. New deliveries totaled 3,092 units, 4.8 percent of total stock. While this is a decline from the 4,631 units added the previous year, three-quarters of the nearly 6,000 units underway at the start of February are expected to complete by the end of the year.
1. Asheville, N.C.
Although it is the list’s smallest metro in terms of population and economy, Asheville is home to a dynamic tourism industry. Approximately 4 million people visited the city in 2017, with a total economic impact north of $3 billion, according to Explore Ashville. The metro added 1,200 jobs in the leisure and hospitality sector in the 12 months ending in December, data from the Bureau of Labor Statistics shows. The market also boasts strong employment in education and health services and trade, transportation and utilities.
While the market’s multifamily deliveries in 2019 totaled only 948 units, this amounted to 6.3 percent of Asheville’s total inventory, the highest in the region. The largest completion of 2019 was The Carroll Cos.’ Greymont Village, a 356-unit luxury community on the southwestern edge of the metro. Developers have a further 1,634 units underway, with the vast majority slated for completion before the end of the year.
Yardi Matrix covers all multifamily properties of 50+ units in size across 133 markets in the United States. This ranking reflects deliveries of properties within that sample group.