The apartment industry continues to be the “not so little engine that could” in the real estate sector, both nationally and locally. Due to a confluence of factors, including a tight single-family home market, strict lending standards for mortgages, and young professionals’ desire to retain mobility at a time when job changes often mean moving hundreds or thousands of miles, demand for apartments remains higher than supply so apartment managers are enjoying an extended period of low vacancy and rising rents.

Lofts at Little Creek (Hanes Mall Blvd)

Real Data, a company that surveys market-rate apartments in metro areas throughout the southeast, recently released it’s April 2018 report and the numbers show that the local apartment industry remains very strong. (It’s important to note that we are referencing market-rate apartments with 5+ units only and a relatively few apartment communities that accept housing vouchers; the data does not include the housing authority, SFH rentals or senior housing).

According to Real Data’s survey results, average rents in the Piedmont Triad have grown 4.2% in the past 12 months and vacancy has fallen from 6% to 5.5% in the same time frame. Average rents across all apartment types – class, and number of bedrooms – are now $842 and the average rent per square foot is up from $0.844 to $0.888 in the last year.

Lofts at Little Creek (Hanes Mall Blvd)

In Forsyth County, Real Data reports 23,035 apartment units with a vacancy rate of 4.8%, an average rent of $827 and an average rent per square foot of $0.867. The strongest submarket in Forsyth is downtown, with vacancy there at 4.5% and average rent at $962 and rent per square foot at $1.107.

Downtown is also where a large majority of apartment construction is happening, with 573 of the 813 apartment units under construction in the county being built there. While that could lead to a short-term spike in vacancies and a flattening of rent growth as those units come online, it should not have a long-term negative effect on vacancies or rent.

One relatively new change to the local apartment industry is the entry of companies from outside the region. The Triad apartment market has traditionally been dominated by “homegrown” companies, but now that the larger metro markets like Charlotte and Raleigh have been saturated with new development, apartment investors and developers are looking at smaller markets like Winston-Salem because they are finding greater returns here. As a result, our rent and occupancy rates are expected to outperform those of the rest of the southeast, which is a change from the past.

Overall, the local apartment market is expected to remain strong for the foreseeable future. In 2017 the National Apartment Association released a study that showed the Piedmont Triad will need to add over 19,000 new apartment units in the next 12 years. Combine this increased demand with our currently well-balanced supply and the future looks bright for the local apartment industry.

Jon Lowder is the Executive Director of the Piedmont Triad Apartment Association, a trade association that represents 140 companies that own and manage 65,000 apartments throughout the Triad, and 20,000 units in Forsyth County alone. Contact Jon.

The Chamber’s Keep it Local initiative promotes community support for local business ventures. Spending locally creates a strong economy and a sense of place which gives our town its unique lifestyle. The Keep it Local campaign will feature a different segment of businesses each month in 2018. May is Real Estate Month.