The Triangle apartment market saw occupancy levels fall in the fourth quarter as a wave of new units came on the market.
The region’s occupancy rate was 93 percent in the fourth quarter, the lowest the rate has been since 2010, according to MPF Research, which analyzes apartment data in 100 U.S. metro markets. The rate was down 1.8 percentage points compared to the same period in 2013.
Rents dropped .5 percent in the fourth quarter compared with the third quarter and are up 2.9 percent compared with the same period in 2013.
The Triangle added 8,490 new apartment units in 2014, the most since MPF began tracking the market in the late 1980s. (MPF’s figures include off-campus student housing projects and low-income tax credit projects, which will not compete with the other apartment complexes being built.)
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The region is expected to add far fewer new units – 4,354 – this year.
Jay Parsons, a market analyst with MPF, wrote in an email that the Triangle market’s challenge is new supply, not lack of demand. He predicts the market will improve as the number of new units coming on the market slows.
“As market conditions have cooled, apartment developers have slowed the pace of new starts considerably,” Parsons wrote. “And with job growth likely to remain strong, we expect the Triangle’s apartment market to see a nice rebound in 2015.”