Research firm: Triangle apartment market healthy
Despite what an apartment market research firm called a “new construction boom” in a report released earlier this month, the report said the Triangle apartment market remains healthy, with demand continuing to exceed new supply.
But that’s expected to change. Charlotte-based Real Data said in its “Raleigh-Durham Apartment Index” report that the Triangle apartment supply growth is expected to take off in the latter half of 2013, and to continue at an accelerated pace into 2015.
More than 9,200 apartment units were under construction in the Triangle, Real Data said in the report, which included data from January of this year for Durham, Orange and Wake counties. Another 6,300 units have been proposed, the firm’s report said.
The report said the average vacancy for the Triangle market was 5.5 percent in January, the lowest since 1998.
The average rent for the Triangle market was $868 in the month, which is up compared with the $834 from the month last year.
For a one bedroom apartment in the Triangle, the average rent was $757 per month, according to the report, compared with $884 for a two-bedroom, and $1,091 for a three-bedroom.
The average rent for Durham County was listed at $865, with the highest average in the county in the Southeast at $928 per month, and the lowest in North Durham County at $831 per month.
The report listed 1,452 new apartment units proposed for Durham County, with about 49 percent of that in North Durham County. It also said there are 2,603 under construction in the county, with 56 percent of that number in Southeast Durham County.
Brian Reece, managing partner of the Raleigh-based real estate market research firm Karnes, said he expects apartment rental rates to increase slightly in the next 12 months, and then to come down slightly as the new units are delivered.
“Probably in the end of 2014 and 2015, is where we’re going to start seeing some changes in rates, but again, that’s when we’re going to start seeing this (new) product being delivered,” Reece said.
Reece said he expects factors to impact the apartment market to include the delivery of the new units as well as the housing market, which he said is starting to improve. He said that what to watch will be Triangle’s job market and housing market.
“Right now it’s still a very tight financial market for someone to get a mortgage, and people are just staying put and staying in their apartments, or putting their residential homes -- because they…don’t want to fire sell -- they go ahead and rent that, and then they go out and rent something,” he said. “That’s what we’re seeing right now.”