The Triangle’s annual rent growth for multifamily apartments in the third quarter of 2019 is already higher than it was at the end of 2018.
This means it might be tougher still to negotiate apartment rent here than The News & Observer reported it would be back in January.
As national apartment occupancy rises today almost to its all-time high — 96.4%, achieved in 2000 — rents have been rising, too, and the Triangle continues to outpace the nation, according to recent numbers from RealPage, a real estate data company.
In this year’s third quarter, the Raleigh-Durham market’s average rent is $1,174, which is lower than the national average of $1,416. But it is still growing faster with an annual rent change of 5.3% in contrast to the national pace of 3%. The growth rate is the same for the Triad area, placing them with the Triangle as rent growth leaders in large metro regions.
Apartment search site RENTCafé, using data from real estate data site Yardi Matrix, lists Raleigh-Durham’s average rent as lower than Charlotte’s $1,400 and the $1,300 in Chapel Hill and Morrisville.
RealPage economist Greg Willet says the faster growth change is “made more impressive by the fact that the Triangle is digesting a sizable block of new supply. Rent growth is strongest at 5.9% for middle-market Class B properties, but prices also are up quite a bit at each end of the product spectrum. Annual rent growth reaches 4.7% in the luxury, Class A communities and 3.7% in the more affordable, Class C properties.”
RealPage’s insights into the Raleigh-Durham market indicate consistent, steady growth: apartment occupancy — the number of occupied apartments — grew slightly to 95.9%, on par with the slight national occupancy growth since last year. Willet says that demand is “proving solid,” with an annual demand for almost 3,800 units.
“That annual demand total is similar to the results that have been posted throughout recent years — really since the middle of 2012,” Willet said. “Robust growth in the local economy is fueling significant demand for both apartment rentals and for-sale single-family homes.”
Apartment supply under construction
There are nearly 7,900 units under construction and Willet says that ongoing building activity has been around 7,000 to 10,000 units for five years.
Dustin Engelken, government affairs director of the Triangle Apartment Association, says that the region is not keeping up with the demand.
“There’s strong and steady growth in terms of jobs being produced here. It’s a time we need to be adding a lot of supply,” Engelken said.
Third-quarter data includes that over 4,500 apartment units are completed annually in the Triangle. Engelken says that the number should be closer to 7,500 to keep up with the present growth.
“Nonetheless, we’re still falling behind year after year,” he said. “1,500 to 2000 units coming in a quarter should be ideal.”
Quarterly completions get close at around 1,300, meaning that quarterly figures should start looking more like annual ones to reflect adequate supply. However, he notes that units come onto the market in an uneven fashion, mostly coming during the second and third quarters in the late spring and early summer.
Higher rents mean roommates are a necessity in the Triangle for millennial renters like Amber Allen, 24, a recent graduate of N.C. State University. The only way she and her fiancé can afford a Raleigh apartment, she says, is to rent a room to a friend as well.
“It’s not ideal for any of us but it’s what we can all afford to where we’re not chunking half or more of our individual incomes at rent,” said Allen.
Paige Moore, 27, a graduate student at N.C. State, says she’s seen high rents make students cram into “unsafe housing,” such as using closets for bedrooms.
“You could also write an article about exes living together for long periods of time due not being able to find housing,” said Moore.