Raleigh’s Multifamily Market in 2025: A Neighborhood-by-Neighborhood Investment Guide

In the competitive landscape of real estate investment, identifying markets with the right balance of growth potential, economic stability, and favorable supply-demand dynamics is crucial for success. As we navigate through 2025, Raleigh, North Carolina, continues to stand out as a premier destination for multifamily investors, despite some near-term supply challenges that create strategic entry opportunities.

At PrimeX Capital, our analysis of the Raleigh market reveals a compelling long-term investment thesis, particularly for Class B and C multifamily properties in strategically selected neighborhoods. This comprehensive guide examines current market conditions and spotlights the neighborhoods offering the most promising investment potential for both seasoned and first-time multifamily investors.

Raleigh Multifamily Market Overview – 2025

The Raleigh-Durham multifamily market presents a nuanced picture in 2025, with strong fundamentals tempered by recent supply expansion. According to the latest Yardi Matrix report, average asking rents stood at $1,520 as of December 2024, reflecting a 0.6% decline on a three-month basis and a 3.1% year-over-year contraction. This temporary softness contrasts with the national average, which saw a modest 0.6% expansion during the same period.

What makes this rental correction particularly noteworthy is that it occurs against the backdrop of exceptional employment growth. The Research Triangle recorded a 2.4% employment expansion through November 2024, with a net gain of 22,600 jobs over 12 months—nearly double the 1.3% U.S. average. The education and health services sector led this growth, adding 10,200 jobs, underscoring the region’s economic diversification beyond its traditional technology base.

The primary factor influencing current market conditions is the unprecedented delivery of new inventory. Raleigh-Durham saw 12,002 units completed in 2024, double the previous five-year average and representing a decade high for the market. The construction pipeline remains robust, with another 20,272 units under construction at the beginning of 2025.

This temporary supply-demand imbalance has impacted transaction volume, with multifamily sales reaching $1 billion in 2024, down significantly from $1.8 billion in 2023. For strategic investors, this market correction creates a window of opportunity to acquire quality assets at more favorable valuations than were available during the previous market peak.

Why Raleigh Remains a Top Multifamily Investment Market

Despite near-term supply challenges, Raleigh’s fundamental advantages as a multifamily investment market remain compelling and position it for strong performance over the medium to long term.

The region’s economic diversity provides crucial resilience against industry-specific downturns. The Research Triangle Park hosts over 300 companies spanning technology, life sciences, and advanced manufacturing sectors. Recent economic development wins include Amgen’s $1 billion expansion at its North Carolina location, which included unveiling a new drug substance facility in Holly Springs and a partnership with Wake Tech Community College to spur employment in biomanufacturing.

Population growth continues to drive housing demand, with Raleigh experiencing a remarkable 23% population increase since 2010. This growth significantly outpaces the national average and shows no signs of abating as Americans continue to seek affordable, high-quality living environments with strong employment prospects.

Perhaps most importantly, Raleigh maintains a crucial affordability advantage. Housing costs remain 15-20% below comparable growth markets like Austin, Nashville, and Denver. This creates a sweet spot for real estate investors: strong demand fundamentals without the compressed cap rates found in overheated markets.

The current supply pipeline, while creating near-term pressure on occupancy and rents, is disproportionately focused on luxury Class A properties. This creates a significant opportunity in the workforce housing segment (Class B and C properties), where development has been limited but demand remains robust.

North Carolina’s landlord-friendly regulatory environment provides another advantage for investors, with reasonable property tax structures and balanced landlord-tenant laws compared to many other growth markets.

Neighborhood Spotlight: Downtown Raleigh

Downtown Raleigh represents the urban core of the market and continues to evolve as a vibrant, mixed-use district attracting young professionals and empty nesters alike.

Market Characteristics: Downtown Raleigh is characterized by its walkable streets, diverse dining options, and growing arts scene. The area has seen significant transformation over the past decade, with numerous adaptive reuse projects converting historic buildings into modern residential and commercial spaces.

Recent Developments: The Warehouse District has emerged as a particular hotspot, with the completion of The Dillon, a mixed-use development featuring luxury apartments, office space, and ground-floor retail. The nearby Glenwood South district continues to expand its entertainment offerings, further enhancing downtown’s appeal.

Rental Performance: Average rents in downtown Raleigh premium properties reach approximately $1,850 for one-bedroom units and $2,400 for two-bedroom units, reflecting a premium over the market average. While Class A properties have seen some softening due to new supply, well-positioned Class B buildings have maintained stronger occupancy, typically above 94%.

Investment Outlook: The most promising investment opportunities in downtown Raleigh are found in older buildings (15+ years) that can be strategically renovated to offer modern amenities at a price point below new construction. Value-add investors should focus on properties within walking distance of major employers and entertainment districts, where rent premiums for renovated units can exceed $200-300 per month.

Notable Transactions: A 124-unit mid-rise property in the Warehouse District traded for $32.5 million ($262,000 per unit) in Q4 2024, representing a 5.1% cap rate—a slight expansion from the 4.7% cap rates seen for similar properties in 2023

Neighborhood Spotlight: North Hills

North Hills has transformed from a traditional suburban shopping area into one of Raleigh’s premier mixed-use districts, offering an attractive blend of urban amenities in a more spacious setting than downtown.

Market Characteristics: Located just inside the I-440 beltline, North Hills features a walkable core surrounded by established residential neighborhoods. The area attracts a diverse demographic, from young professionals to affluent empty nesters, drawn by its upscale shopping, dining options, and convenient access to major employment centers.

Recent Developments: Kane Realty’s continued expansion of the North Hills innovation district has added significant Class A apartment inventory, including The Eastern, a 376-unit luxury community completed in 2023. The ongoing development pipeline includes additional residential, office, and retail components scheduled for delivery through 2026.

Rental Performance: Class A properties in North Hills command rents averaging $1,750 for one-bedroom units and $2,200 for two-bedroom units. Occupancy in newer buildings has dipped to approximately 92% due to recent deliveries, while established Class B properties maintain stronger occupancy around 95%.

Investment Outlook: The most attractive investment opportunities in North Hills are found in Class B properties built between 1990-2010 that can be strategically upgraded to capture renters priced out of new construction but seeking the North Hills lifestyle. Properties within a 1-2 mile radius of the core North Hills development, particularly along Six Forks Road, offer strong value-add potential.

Notable Transactions: A 210-unit garden-style community built in 1998 sold for $42 million ($200,000 per unit) in Q1 2025, representing a 5.3% cap rate on existing operations with significant upside through strategic renovations.

Neighborhood Spotlight: Brier Creek

Brier Creek offers a strategic location near the Raleigh-Durham International Airport and Research Triangle Park, making it particularly attractive to professionals working in these employment hubs.

Market Characteristics: This master-planned community features a mix of residential, retail, and office components, with the Brier Creek Country Club providing an upscale anchor. The area attracts a high concentration of technology and healthcare professionals, with average household incomes exceeding the Raleigh MSA average by approximately 20%.

Recent Developments: The area has seen moderate multifamily development activity, with approximately 800 units delivered since 2022. The Arboretum at Brier Creek, a 297-unit luxury community, represents the newest addition to the submarket, featuring resort-style amenities targeting upper-income renters.

Rental Performance: Class A properties in Brier Creek achieve rents averaging $1,650 for one-bedroom units and $2,000 for two-bedroom units. Occupancy has remained relatively stable at 93-94%, outperforming the broader market due to the area’s proximity to major employment centers.

Investment Outlook: Brier Creek offers particularly strong opportunities for investors targeting properties built between 2000-2015 that can benefit from strategic upgrades to common areas and unit interiors. The area’s strong employment base and limited developable land create favorable long-term fundamentals for multifamily investment.

Notable Transactions: A 276-unit garden-style community built in 2008 traded for $58 million ($210,000 per unit) in Q3 2024, representing a 5.2% cap rate on in-place income with value-add potential through unit renovations.

Neighborhood Spotlight: Midtown Raleigh

Midtown Raleigh, centered around the North Hills area but extending further north along Six Forks Road, has emerged as a dynamic submarket blending commercial and residential uses.

Market Characteristics: Midtown offers excellent accessibility via major thoroughfares and attracts a diverse demographic ranging from young professionals to established families. The area features a mix of housing types, from garden-style apartments to mid-rise communities, catering to various price points.

Recent Developments: The Midtown East development has expanded the district’s footprint, adding retail, office, and residential components. Approximately 1,200 new multifamily units have been delivered in the broader Midtown area since 2023, with another 800 units under construction.

Rental Performance: Average rents in Midtown Raleigh range from $1,550 for one-bedroom units to $1,950 for two-bedroom units in Class A properties, with Class B communities typically commanding $1,350-$1,650 for comparable units. Occupancy in stabilized properties averages 94%, slightly outperforming the market.

Investment Outlook: Midtown offers compelling opportunities for investors seeking properties with strong cash flow potential and moderate value-add components. Older communities (pre-2010) with dated amenities but solid locations present particularly attractive acquisition targets in the current market.

Notable Transactions: A 320-unit community built in 2005 sold for $64 million ($200,000 per unit) in Q4 2024, representing a 5.4% cap rate on existing operations with potential to achieve a 6.5%+ cap rate through strategic renovations and operational improvements.

Neighborhood Spotlight: Cameron Village/Oberlin

The Cameron Village/Oberlin area represents one of Raleigh’s most established and desirable neighborhoods, offering a blend of historic charm and modern amenities.

Market Characteristics: Located just west of downtown, this area features the Cameron Village shopping center (recently rebranded as Village District), one of the oldest shopping centers in the Southeast. The neighborhood attracts a diverse demographic, from students at nearby NC State University to affluent professionals and empty nesters.

Recent Developments: The area has seen limited new multifamily development compared to other Raleigh submarkets, with approximately 500 units delivered since 2022. This constrained supply pipeline has helped maintain the area’s rent stability relative to other submarkets.

Rental Performance: Class A properties in Cameron Village/Oberlin achieve rents averaging $1,700 for one-bedroom units and $2,100 for two-bedroom units. Class B properties typically command $1,400-$1,600 for one-bedroom units and $1,700-$1,900 for two-bedrooms. Occupancy has remained strong at 95-96%, outperforming the broader market.

Investment Outlook: The limited development potential in this established area creates favorable supply constraints for existing properties. Value-add opportunities exist in older communities (pre-2000) that can be strategically renovated to capture renters seeking the area’s lifestyle advantages at a discount to new construction.

Notable Transactions: A 165-unit mid-rise property built in 2001 traded for $38 million ($230,000 per unit) in Q2 2024, representing a 5.0% cap rate—among the lowest in the market, reflecting the area’s strong fundamentals and limited new supply.

Investment Strategy for Raleigh’s 2025 Market

The current Raleigh multifamily market presents a strategic opportunity for investors who can navigate the temporary supply-demand imbalance while positioning for the market’s strong long-term fundamentals. We recommend the following approach for multifamily investors considering the Raleigh market in 2025:

1. Focus on Value-Add Opportunities in Class B/C Properties: The most compelling risk-adjusted returns are found in properties built between 1990-2010 that can benefit from strategic renovations to unit interiors, common areas, and amenity spaces. These properties can capture renters priced out of new construction while offering significantly higher yields than stabilized Class A assets.

2. Target Submarkets with Limited New Supply: While downtown and North Hills have seen significant new deliveries, areas like Cameron Village/Oberlin and parts of Midtown have experienced more constrained development pipelines. These areas offer stronger near-term rent growth potential as the market absorbs new inventory.

3. Implement Strategic Renovation Programs: In the current environment, we recommend targeted renovation programs focused on high-ROI improvements rather than comprehensive luxury upgrades. Kitchen and bathroom renovations, upgraded flooring, and washer/dryer installations typically deliver the strongest returns on investment.

4. Optimize Operations for Maximum NOI: With rent growth temporarily constrained, operational excellence becomes even more critical. Implementing technology solutions for leasing and management, optimizing utility billing systems, and strategic amenity enhancements can significantly improve property performance.

5. Structure Acquisitions with Flexible Financing: The current interest rate environment requires careful attention to capital structure. We recommend securing financing with prepayment flexibility to allow for refinancing as interest rates potentially moderate and property performance improves through value-add execution.

6. Plan for Medium-Term Hold Periods: The optimal strategy in the current market involves a 5-7 year hold period, allowing time for the market to absorb current deliveries, for value-add business plans to be fully executed, and for the market’s strong fundamentals to drive appreciation.

Conclusion: Raleigh’s Compelling Long-Term Opportunity

While Raleigh’s multifamily market navigates a temporary period of supply-driven softness, the region’s exceptional economic and population growth fundamentals position it for strong performance over the medium to long term. The current environment creates a strategic entry point for investors who can identify the right assets in the right submarkets.

The neighborhoods highlighted in this analysis—Downtown, North Hills, Brier Creek, Midtown, and Cameron Village/Oberlin—each offer distinct advantages and investment opportunities. Understanding the unique characteristics of each submarket is essential for developing a successful investment strategy in Raleigh’s diverse multifamily landscape.

At PrimeX Capital, we specialize in identifying, acquiring, and optimizing multifamily properties in high-growth markets like Raleigh. Our focus on Class B and C properties with value-add potential allows us to target investments with both strong cash flow and appreciation upside.

Ready to explore multifamily investment opportunities in Raleigh? Contact us today to schedule a consultation and discover how our approach can help you achieve your investment goals. You can reach our investor relations team at [contact information] or visit our website at https://1primexcapital.com/ to learn more about our investment strategy and current opportunities.

Stay tuned for our upcoming analysis of Charlotte’s multifamily market, where we’ll provide a similar neighborhood-by-neighborhood guide to one of the Southeast’s other premier investment destinations.

This article is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Investment in real estate involves risk, and past performance is not indicative of future results. Potential investors should conduct their own due diligence before making any investment decisions.