Raleigh-Durham Multifamily Market Insights: Attractive market fundamentals lure increased development activity

Highlights:

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• Property fundamentals in the Raleigh-Durham multifamily market softened somewhat during the third quarter, with vacancies rising as the pace of construction accelerated. Demand drivers remain strong, suggesting absorption should gain momentum in the coming quarters.
• Vacancy in Raleigh-Durham pushed higher in recent months, rising 20 basis points during the third quarter to 5.3 percent. Year over year, the rate is up 180 basis points. Prior to recent increases, the local vacancy rate had been trimmed nearly in half from 2020 to mid-2021.
• Year over year, asking rents have jumped 9.3 percent, ending the third quarter at $1,603 per month. Since the beginning of 2021, local asking rents have spiked more than 30 percent.
• Total transaction activity in the third quarter was nearly identical to levels recorded in the second quarter. Prices have increased, as the median sales price reached $264,800 per unit, up 32 percent from 2021 levels.

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