Q4 Market Update Post

Alright, let’s break down the Charleston multifamily market as we close out 2024 and look ahead to what 2025 might bring.

Apartment leasing in Charleston is heating up as we edge into 2025. We hit a net absorption of 3,639 units for 2024, making it one of the strongest years ever for the market. Despite a whopping 6,000 units flooding the market this year, a robust spring leasing season helped us absorb more units than were supplied in the second quarter of 2024—this hasn't happened since '22 during Q2! It's a good sign that demand is not only holding up but actually outpacing the influx of new units.

Yet, this influx pushed vacancy rates to a cool 12.0%. Sounds high, right? But it's just back to the historical average for the area. Rent growth, meanwhile, kept its head above water at a modest 0.1% year-over-year increase. That's a stark drop from the heady days of 17% growth back in '21, but, it's still growth.

Economically, Charleston's been on a tear, fueled by expansions in blue-collar and white-collar jobs alike. Big names like Boeing and Volvo are beefing up their presence, and the Port of Charleston is busier than ever, pumping up logistics and warehousing jobs. This economic vitality is directly fueling the rental market's resilience.

Looking into 2025, the construction conveyor belt is slowing down. With just 3,000 units underway, we’re seeing a significant pullback from the peaks of early '23 through now. This slowdown should help alleviate some of the recent supply pressures, stabilizing or even potentially reducing vacancy rates if demand holds strong or increases.

As construction taps the brakes, expect the vacancy turbulence to smooth out. And with less pressure on the supply side, rent growth could find its footing again and start climbing. Given Charleston’s draw—not just its economy but its lifestyle, attracting retirees and remote workers—the city's multifamily market is poised for a rebound.

Investment-wise, keep your eyes peeled for opportunities in burgeoning submarkets like North Charleston and Summerville/Goose Creek/Moncks Corner. These areas are ripe with economic activity and could see appreciating rental rates and property values as the market starts to tighten up again. As we roll into 2025, strategic bets in these zones could be particularly savvy.

In short, 2024's been a year of adjustment, but 2025 is shaping up to be a year of opportunity. If you’re playing the multifamily game in Charleston, the coming year could be a great time to make your move.