Raleigh’s apartment market is experiencing a slight shift as vacancy rates decline for the first time in nearly three years. After reaching a record high of 12.6% earlier this year, the vacancy rate fell to 11.9% in the second quarter, indicating a continue surge in demand that outpaced new supply for the first time since 2021, according to CoStar data. This decline contrasts with the national trend, where vacancies have continued to rise, reaching 7.9% at the end of the second quarter. Raleigh’s recent trough vacancy rate of 5.1% back in the third quarter of 2021 was driven by surging demand amid limited new construction during the pandemic. However, as developers responded with a construction boom, vacancies soared as demand cooled down in 2022.
Now, Raleigh is seeing slight signs of market balance. In the second quarter, net absorption totaled over 2,800 units, while fewer than 2,300 new apartments were completed, resulting in the drop in vacancy rates. Despite this positive momentum, over 11,500 apartments are still under construction, suggesting that the vacancy rate may remain somewhat elevated in the medium term and expected rent concessions as new apartments are delivered in late 2024 through 2025.
However, longer-term trends are promising, as construction starts have slowed dramatically in recent quarters. With fewer than 2,500 units breaking ground so far this year, Raleigh’s supply pipeline is expected to slow considerably by 2026. By late 2026 the market is expected to see continued stabilization which should gradually ease vacancy rates and lead to increased rents over time.
Win is a graduate of East Carolina University where he received his bachelor’s degree in finance. He holds both North Carolina and South Carolina Real Estate Licenses and was awarded the prestigious CCIM (Certified Commercial Investment Member) designation in 2008.
Win served on the board of directors of The Triangle Apartment Association (TAA) where he co-chaired The Independent Rental Owner’s Council (IROC). He is a member of the International Council of Shopping Centers (ICSC), the Triangle Commercial Association of Realtors (TCAR) and the Raleigh Kiwanis Club.
While a specialist in site identification, evaluation and acquisition for investors and businesses, he also has extensive experience in brokerage, leasing, property management and investment sales.
Win assists in managing The Coleman Group, LLC, which owns a portfolio of investment properties, and he is a member of our acquisitions committee. He has lifelong experience and love for historic properties including the one he restored and where he resides in Historic Oakwood in Downtown Raleigh.
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