New survey finds apartment rents are rising sharply
Seattle Times business reporter
Seattle and Snohomish County apartment dwellers will really have to dust off their memories to recall anything like they've gone through this past year: Rents in those two areas have climbed 12.2 percent annually — the highest increase anywhere in the central Puget Sound region.
"In the past dozen years there's been nothing like that," says Mike Scott, co-author of the just-released Dupre+Scott Apartment Vacancy Report.
King County's Eastside isn't far behind, posting a 10 percent annual increase. Spurring those increases has been a steadily shrinking apartment availability. Six months ago the regionwide vacancy rate stood at 4.3 percent.
Today's 3.8 percent "is not the lowest rate we've ever seen, but vacancies weren't lower very often in the past 20 years," observes the semiannual report's co-author Patty Dupre.
The situation is even tighter in North King County, from the Ship Canal to the county line where the vacancy rate is 2.6 percent.
A 5 percent rate is considered a balanced market, and anything above it puts renters in charge. That supply-and-demand situation explains why rents are what they are.
"Seattle and the Eastside and Snohomish County are areas that saw the most new construction coming into the market in 2000 and 2001 — just before the area got clobbered by a recession," Scott notes. Those factors combined to cause the vacancy rate to jump.
In early 2002 it was 8 percent or higher in King and Snohomish counties and, rather than raising rents, landlords were lowering them, recalls Scott.
"Now they're playing catch-up," he says.
Indeed, while Seattle saw rents rise 12.2 percent the past year, over the past six years it was up 16 percent, from $1,006 in the fall of 2001 to the current $1,169. This is for all sizes of apartments combined and represents less than a 3 percent annual increase.
The average rent throughout King County is $1,001. In Snohomish County it's $912. Pierce County is $771 while Kitsap is $802.
Landlords told Scott they anticipate raising rents about 4 percent in the coming six months as vacancies continue to be tight.
The region's strong economy is the biggest factor affecting this, he says, citing "strong job growth and in-migration. Without a strong economy it would hurt housing overall."
Apartment conversions also have played a significant role.
In the past six months developers have opened 1,250 new apartment units regionwide, but "that's not a lot," Scott says. "Condominium conversion has taken more units out of the market in the same period."
Finally, the current turmoil in the housing market is causing some renters to stay put, he says. That, too, is having an impact on apartment demand.
Dupre+Scott's Apartment Vacancy Report is based on a fall survey involving 20-unit or larger apartment complexes throughout the Puget Sound region.
Elizabeth Rhodes: firstname.lastname@example.org
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