Is Charlotte building too many apartments?

Real estate analysts say Charlottes apartment building boom could oversaturate the rental market this year, possibly prompting free-rent offers and other concessions as leasing competition intensifies.

Developers, however, say the long-term outlook for the Charlotte apartment market remains bright.

Much of the new apartment growth is coming in and near uptown Charlotte, in areas such as the South End, SouthPark, NoDa and Elizabeth neighborhoods, according to research firm Real Data, which tracks the multifamily rental market.

In its most recent twice-yearly report on the Charlotte market, Real Data in September characterized the citys apartment development pipeline as very active, with more than 8,100 units under construction and nearly 12,000 more proposed.

Supply is expected to exceed demand within a year, the report states.

You can expect to see communities of all ages offering one to three months rent-free in the months to come, in reaction to increased competition, Real Data analyst Engle Addington wrote in an email to the Observer last week.

Frank Warren, a real estate analyst with engineering and land-planning firm Kimley-Horn, said Charlotte is building more apartments than can typically be absorbed in a year. But he added: I am fairly convinced demand is going to remain strong and any oversupply will be of a limited duration.

Developers believe favorable demographic trends and pent-up post-recession demand will cushion them against a possible multifamily market bubble or the need for steep rent concessions.

Lennar, a major single-family homebuilder, is developing Astoria at Metropolitan, a 261-unit complex in midtown, and has two other projects under contract, said John Gray, director of investments with Lennar Multifamily Communities.

Charlottes healthy job and population growth make such projects good bets, he said. Vacancy rates are at about 5 percent, according to Real Data, well below the 7 to 8percent that Warren calls an equilibrium point.

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Is Charlotte building too many apartments?