Ken Szymanski, Executive Director of the Greater Charlotte Apartment Association, joined our sales meeting today to dropped some serious knowledge on the current Charlotte Apartment Boom, and here’s what we learned:
As we mentioned before, the apartment market in Charlotte is booming. There are 12,000 units under construction and another 12,000 in the planning phase (75% of which will likely be built) in Mecklenburg County. (See the map above) That’s 3-4 times the long term average, but it ranks just 17th nationally. New communities are leasing up in just 9-months — an extraordinary pace — and rent rates are increasing by 4.5% per year. Clearly, demand is high, but why?
Well, in a word, demographics. There are more people moving to Charlotte each year (70,000) than moving away (54,000), and those folks, along with current residents, are more likely to rent than ever. Ken attributes this trend toward renting to two things: 1. the perceived lack of appreciation potential in the housing market after the crash and 2. millennials’ (of course) emphasis on mobility, flexibility, and walkability when choosing housing.
So is this the new normal, or will the pendulum swing back towards homeownership? Time will tell, but our bet is on the latter. We think people will regain their confidence in housing as a solid investment, and we do not believe millennials aspire to live the nomadic lifestyle forever, just maybe a little longer than their parents.