Changing Demographics Shape Charleston, SC Multifamily Market
- Charleston, South Carolina’s multifamily market continues to improve, supported by new jobs, a growing retiree population and shifting demographic profiles.
- Millennials and Empty Nesters are the target renters shaping the market with new developments aiming to meet residents’ changing needs.
- Construction activity is at record highs. Rental rates continue to climb. Residential growth driving suburban developments.
- Demand is expected to remain strong, but short-term absorption may not keep pace with unit deliveries. Occupancy is projected to remain high despite additional supply.
Activity was strong for Charleston’s multifamily market throughout 2014 and the momentum is expected to last through 2015. Occupancy rates and rent growth are on the rise indicating healthy market conditions, but as additional units deliver to the market, occupancy may rise if supply out-paces future demand.
The economy is improving as major investments and job announcements continue. Recently, two major announcements came from Volvo and Mercedez-Benz, which are collectively investing $1 billion and creating 3,300 jobs. As of April 2015, approximately 9,200 non-agricultural jobs were added to the Charleston-North Charleston, SC MSA, a 3.0% increase over a 12-month period, a growth trend expected to continue. The unemployment rate remains low and was down to 5.2% in April 2015 from 5.9% in January 2015.
While traditional renters fall in the 20- to 34-year-old age group, a group of older Empty Nesters continue to enter the pool of local apartment renters. Millennials, making up a greater component of the renter pool, are opting out of home ownership, and Empty Nesters, aided by an improving housing market, are selling their suburban homes and moving to the city. The flexibility of apartment life allows job mobility, appealing to young residents, while allowing older residents to vacation without the worry of home maintenance.
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