Economist says Charlotte apartment market not in current danger of being overbuilt

If you spot a construction crane around Charlotte, chances are good it's being used to build an apartment complex.

While much of commercial real estate has remained relatively stagnant since the financial crisis hit in 2008, the multifamily sector has been running hot. Developers are currently building more than 4,000 units and thousands more are in the works.

The surge has some real estate professionals worrying the market is being overbuilt.

But Kevin Thorpe, chief economist with real estate firm Cassidy Turley tells the Observer he is not worried about the market running too hot.

In fact, he said, he thinks Charlotte needs even more units. Currently, the vacancy rate is 5.2 percent, which he described as "so low."

"There is very, very strong demand," he said. "I know there's a fear about overdevelopment. And this industry has a tendency to do that. But demand for apartment units has exceeded new supply in Charlotte for three years."

Rents are also forecast to grow steadily, a healthy four to five percent a year he said.

There could be some extra supply in 2014 or 2015, he said. But he doesn't see it being a big problem for property owners.

It could, however, provide relief for renters. If vacancy rates rise, some complexes will probably slow their rent growth to 2 percent or 3 percent annually, instead of 5 percent.

As Thorpe said: "Renters could see a little bit of a breather."