SkyHouse apartment tower in uptown Charlotte. Observer archives
SkyHouse apartment tower in uptown Charlotte. Observer archives

Business

Charlotte’s average rent is up, again. Here’s how much – and four other key facts

October 05, 2017 08:08 AM

UPDATED October 05, 2017 11:41 AM

If you’re looking for an apartment in Charlotte, get ready for sticker shock: The average rent is up again, even as thousands of new units hit the market.

Apartment rent across the whole Charlotte region jumped almost 6 percent from a year ago, hitting $1,115 a month in August. That’s up from $1,052 in August 2016, according to the latest report from Charlotte-based Real Data, which updates its extensive collection of facts about the local market every six months.

“The rent index continues to rise at a much faster rate than the wage index,” Real Data analysts wrote in the report. But that doesn’t mean rents are likely to come down anytime soon: The company is forecasting rents will rise another 2.5 to 3 percent next year, driven by continued population growth and strong demand.

$1,115Average apartment rent in Charlotte

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Here are five key facts from the Real Data report that help explain Charlotte’s ongoing apartment boom:

▪ The number of vacant apartments isn’t budging, even as new apartments open their doors at a record pace. Charlotte’s vacancy rate, the percentage of unoccupied apartments, was basically flat from a year ago, at 5.8 percent in August, down 0.1 percent. That’s even though almost 9,500 new apartments opened across the Charlotte region in that time, bringing the number of apartments to 130,000.

That means Charlotte is absorbing all of those new apartments, instead of seeing the market swamped. And as long as people keep renting the new units as fast as developers can build, the apartment boom will keep rolling.

▪ Rents vary dramatically throughout Charlotte. The highest rents are in the uptown area, where the average apartment will set you back $1,860 a month. The crop of new high-rises tricked out with ultra-luxe amenities like as rooftop pools and valet parking, such as SkyHouse, Ascent and the Museum Tower apartments, have pushed those rents higher and higher.

A balcony view from one of the model units in Museum Tower on Tuesday, June 20, 2017.
David T. Foster III dtfoster@charlotteobserver.com

North and east of uptown, however, in a submarket that includes higher-poverty areas around Statesville Avenue and North Graham Street, the rent averages $747 a month - the city’s lowest.

▪ But the highest-rent part of Charlotte also has the highest vacancy rates. Uptown’s vacancy rate of 21.6 percent is more than three times that of any other Charlotte submarket. That’s largely because of the big wave of new apartments to open there recently, totaling more than 1,000. Those new apartments have increased the number of units in uptown by about 25 percent, and many of them are still vacant as leasing managers work to find tenants.

▪ There are still almost 12,000 apartments under construction and yet to be completed in the Charlotte region, with just under 13,000 more proposed or on the drawing board that haven’t broken ground. That’s a slight increase from the same time last year, further evidence that the boom isn’t yet slowing.

Rendering of the Montage apartments under construction on Stonewall Street.
Courtesy Proffitt Dixon

The growth is especially pronounced in the submarket that includes South End and SouthPark, where more than 2,600 apartments are under construction. That’s the most in any part of Charlotte.

▪ The newer an apartment is, the more you can expect to pay – and you might be paying a lot more. According to Real Data, Charlotte’s newest apartments, those that just opened and are still in the “lease-up” period, average $1,471 a month. Apartments that are 16 to 30 years old, however, average $1,048. Apartments older than 30 years rent for an average of $873, making them an important reservoir of affordability in a fast-growing city.

But that last group is also slowly shrinking, as more older apartments are demolished or redeveloped. While just under 4,000 new, pricey apartments have been completed and hit the market in the past six months, Real Data reported that the supply of apartments older than 30 years shrank by 40 units.

Ely Portillo: 704-358-5041, @ESPortillo