Development

Forecast: New apartments will slow rent increases in Charlotte – but not much

Work continues at The Gibson along Central Avenue in December.
Work continues at The Gibson along Central Avenue in December. tsumlin@charlotteobserver.com

A new forecast for the rental market this year shows the wave of new apartments coming online might give tenants some relief from rapidly rising rents – but not very much.

Real estate research company Zillow said Friday that it expects the median rent in Charlotte to reach $1,250 by December 2016, up 2.4 percent from the current level. That estimate includes houses and condos for rent as well as apartments.

While Zillow said the new apartment supply – there are more than 12,300 units under construction in the Charlotte region – will blunt rent increases this year, Charlotte’s expected rate of rent increase still is more than double the national average. For the U.S., Zillow is forecasting median rents will rise 1.1 percent, reaching $1,396 a month by the end of the year.

“Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been,” Zillow’s chief economist Svenja Gudell said in a statement. “The slowdown in rental appreciation will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up.”

Other cities still are seeing more rapid rent increases than Charlotte. San Franciscans can expect their rent to go up 5.9 percent this year, Zillow said, and those in Seattle should brace for a 4.5 percent jump. San Jose, Calif., epicenter of the tech boom, will see rents jump 7.8 percent this year, the biggest increase in Zillow’s forecast.

Some cities likely will see declining rent. But that’s not necessarily a good thing: Zillow points out that many of them aren’t seeing people move there because of sluggish local economies.

Indianapolis rents are forecast to fall 3.6 percent, rent in Cleveland could drop 0.6 percent. In Oklahoma City, rents are forecast to drop 1.8 percent.

Ely Portillo: 704-358-5041, @ESPortillo

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