The trends to start the year out in Charlotte, North Carolina's multifamily segment were mixed. But one thing's for sure — the influx of supply could cause some challenges.
More than 4,700 units alone were delivered in the first quarter, according to a market report from Marcus & Millichap. That's more than threefold the median since 2000.
While vacancy dropped by 80 basis points year-over-year in the first three months of 2025 and declined for three straight quarters — that isn't expected to continue. Marcus & Millichap projects the category will rise by 40 basis points to 6.9 percent by the year's end, citing the "unprecedented" level of product on the market.
"This wave of deliveries will continue in the near term, with over 10,700 additional units to be completed this year," the CRE firm said.
"Elevated deliveries could begin pressuring vacancy, particularly in the Huntersville and Cornelius areas, where total inventory is on track to expand more than 20 percent by year-end."
That said, rents are expected to reverse the trend after hitting a three-year low in the first quarter of $1,540 per month. Marcus & Millichap is calling for a 1.2 percent increase overall in 2025 due to "peak deliveries in the rear view."
Still, the brokerage touts Charlotte's strong labor market, which is helping drive net absorption. Plus, transactions were "steady" in the first quarter, according to Marcus & Millichap. Overall, despite supply and vacancy challenges, things look stable for multifamily in the city.
"Charlotte also ranked second nationally for inbound U-Haul moves in 2024, highlighting the metro’s continued population growth," it said.
"Coupled with elevated barriers to homeownership and a slowing delivery pipeline, these factors should continue to support a resilient rental market. Mid-tier properties remain well positioned, posting the sharpest vacancy declines and smallest rent drops last year."
Currently, Marcus & Millichap noted that investors are exploring suburban areas in Charlotte because they have "stronger demographic momentum and tighter fundamentals." Particularly, the firm listed Gastonia as a target, which holds the lowest vacancy rate currently in all of Charlotte's submarkets.
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