Every little bit helps: For the first time in 11 years, Charlotte rent prices tick down
Charlotte renters have shouldered the burden of steadily rising rent prices — until now.
Data released by commercial real estate analytics firm CoStar show a 0.328% decrease in Charlotte market rent rates from this time last year. That number represents a decrease from $1,605 in the second quarter of 2022 to $1,600 in the second quarter of this year.
Chuck McShane, CoStar’s market analytics director for the Carolinas, said a drop in demand for rental units was the largest factor in prices being lower this year. Supply will be the biggest driver of future rent prices because there are tens of thousands of units under construction, McShane said.
Average Charlotte rents last decreased in 2008 in conjunction with the Great Recession. Ever since middle of 2011, Charlotte rents have been higher than the year prior. Though, there have been some quarter-to-quarter improvements in price.
During the recession-induced rent decline, prices dipped from $1,059 per unit to a low of $961 per unit, according to CoStar data, which draws on Apartments.com and numbers collected by its own research team.
Still higher rents than pre-pandemic?
The decline in Charlotte matches up with a national trends showing year-over-year declines, according to a Rent.com report released this month. That report showed prices across the country rose almost 20% during the previous two years before the recent decline.
But news about a $5 decline in average Charlotte prices may be cold comfort for renters because pandemic spikes were so large. Two years ago, the average asking price per unit was $1,406. From then to now, several quarters registered double digit increases in year-over-year prices.
But McShane said demand fell rapidly from record highs in the second half of 2022 as recession fears and inflation “kept people in place.” Rents decreased by 0.7% in last year’s third quarter and 1.6% in last year’s fourth quarter, according to CoStar’s data.
Will prices keep falling?
McShane says rent prices are likely to be flat.
Developers have added about 11,680 units in the past year. An additional 33,547 units are underway, which are scheduled to expand inventory by an additional 16% over the next two to three years.
This story was originally published July 12, 2023 at 6:00 AM.
