Even as national economic growth is expected to moderate this year, a Wells Fargo economist predicts that Charlotte’s development boom isn’t slowing down any time soon, particularly in the suburbs.
During the Greater Charlotte Apartment Association’s annual multifamily industry forecast breakfast, Mark Vitner, managing director and senior economist at Wells Fargo Securities, said Charlotte’s continued employment and population growth are fueling development.
Meanwhile, the national economic picture is more modest. Vitner predicts the short-term economic boost from the 2017 tax reform will begin to wane, and consumers will end up with smaller tax refunds.
Charlotte was the sixth fastest-growing metro area in the country in 2017, behind Raleigh, which ranked third. The question, Vitner said, is whether those who are moving will stay put.
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“Where millennials land today is not necessarily where they’re going to settle,” he said to the crowd. “They’re a restless generation.”
And developers are building at a rapid pace to meet that demand. Charlotte’s apartment market has grown close to 31 percent since the end of the recession, according to a 2018 report from apartment analysis and property management company RealPage. That’s the highest percentage growth of any city in the U.S.
Vitner said there’s some concern that there’s not enough demand for the scores of apartments being built. Vacancy rates in Charlotte are now 7.5 percent, up from a year ago, according to his report.
“It’s really hard to avoid having periodic overbuilding because the economy generally doesn’t slow gradually,” he told the Observer.
Vitner said growth is picking up in the suburbs, largely due to the lack of affordability in uptown and its surrounding neighborhoods. He pointed to areas like south Charlotte’s Waverly, where developers are turning what was once a golf course and farmland into a mixed-use development.
“It’s only been in the last couple years that we’ve seen the suburbs begin to come back in a meaningful way,” he said in his speech.