The Carolinas Have Become a Major Multifamily Market

There are at least two different ways to make money in a business. One is to enter a tight market and sell your wares at a high price, depending on an imbalance of demand over supply to protect the pricing strategy.

The other is to look for a robust market with many people who need a product and adequate space to increase supply and satisfy everyone.

In multifamily, the first approach can offer profit if people don’t get tired of being unable to find a place to live and if workers and suppliers don’t use market conditions themselves to strengthen their own pricing. The second approach is what might work in North and South Carolina.

According to RealPage blog, the two states last year were at the top of apartment unit absorption relative to existing units.

“Apartment demand in North Carolina and South Carolina ranks as the strongest in the nation, indexed by relativity,” they wrote. “The Carolinas garnered apartment demand for 2.5 times more than the share of existing local stock in calendar 2023, topping every other region for the measure.”

The markets punched above their weight. The two states together represent 4.2% of existing multifamily units in the U.S. But with annual absorption of 24,949 units, they were 10.3% of U.S. total unit absorption.

Compare that to Texas, with 18.6% of all units and 11.7% of absorption, giving the sate a relative index of 1.6. Florida, with 12.7% of units and 8.1% of absorption also has a 1.6. The mountains and desert region had a 2.0 score. Southeast, 1.5; Mid-Atlantic, 1.1; Lower Midwest, with about the same percentage of units as the Carolinas, had an index of 0.8 while Upper Midwest was at 0.7. West Coast came in at 0.3.

Within the Carolinas, markets differed widely, RealPage separately said. “In Wilmington, the number of renter households grew by over a quarter (25.2%) from 2020 to 2023, which marked the highest rate in the nation, according to data from RealPage Market Analytics,” they wrote. “Naturally, the list of markets with the biggest growth in renter households virtually mirrors supply trends, as areas with more supply are going to naturally see more absorption. And apartment absorption in the Carolinas has been prolific of late. Among the nation’s 150 largest markets, the Carolinas contains six metros within the top quartile nationally for renter household growth. Only Greensboro, Columbia and Fayetteville rank outside of that top 25% of markets.”

Multifamily Spring:

Multifamily Spring is coming to New York City this April 18. This year’s program will bring together the industry’s most influential and knowledgeable real estate executives from the multifamily sector for 5 hours of face-to-face networking and over 5.5 hours of can’t miss sessions. Learn more or register here.