|By David Bracken, The News & Observer, Raleigh, N.C.|
|McClatchy-Tribune Information Services|
So far this year 35 Triangle apartment buildings have sold for a total of
And that number could end the year even higher given the recent spate of sales. Just this week, the
Transaction volumes in 2011 are up 60 percent from last year and 238 percent from two years ago. That rise is raising questions about whether the apartment sector is experiencing the kind of inflation in valuations that proved so disastrous during the credit bubble that drove up single-family home prices.
Investors are being drawn to apartments both by their steady cash flow and their improving fundamentals. The turmoil in the residential housing market has increased demand for apartments as more and more people lose their homes to foreclosure or find that they can no longer qualify for a mortgage.
"There aren't as many units being delivered in the next two to three years to keep up with demand," said
The apartment vacancy rate in the Triangle was 6 percent in September, the lowest it's been in more than a decade, according to data from the
The average monthly rate in September for a three-bedroom apartment was
Growth like that is drawing the attention of deep-pocketed pension funds and other institutional investors. Institutional investors were the buyers in many of the biggest apartment deals this year, including
The sector's strong performance also means that new apartment complexes are among the few real estate projects that can get financing.
There are currently about 100,000 apartment units in the Triangle, with an estimated 8,000 new units proposed in the Triangle, according to
"I think we're going to be at somewhat of an equilibrium," he said.
The market isn't likely to overheat unless the Triangle starts seeing 5,000 or more new units come online per year, said
Anthony said there are some parts of the Triangle, such as the Brier Creak area in northwest
"If you put 2,000 more units out at
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