Seattle's Rentals and What You Can Expect...

How will this year’s apartment building boom in Seattle affect rent rates?

Rent rates in Seattle were among the fastest growing in the country in 2016. The average rental increase for new occupiers grew by approximately 10 to 12% over the year, but forecasters predict growth to be halved in 2017.

The predicted fall in rental costs are entirely down to the increase in apartments becoming available this year. The magnitude of building works expected to be completed in 2017 is nothing short of remarkable. Close to 10,000 market-rate apartments will be open this year in the area; this is almost twice as many as in any other year. You don’t have to be an expert to forecast the downward effect that this will have on rental price increases.

As mentioned above, gross rental increase is expected to be around the 5 to 6% mark. With so many apartments being made available due to what some call the Amazon effect, analysts are predicting rent increases to fall again in 2018.

There is doubt however as to whether all of the planned projects will come to fruition. Many construction companies and investors have taken advantage of the rule changes that allow higher densities of housing; the fact that construction costs have soared by around 35% in the last five years mean that profitability is an issue. That tied in with a potential over-supply of housing stock may cause some projects to be delayed or even cancelled.

What it all boils down to as far as the rental market is concerned, is when will this period of building growth end? One thing that isn’t in doubt is the fact that Seattle remains a very strong city compared to others in the country.

As we have mentioned previously, local knowledge is key to making a wise investment for existing and potential property owners. The building boom will affect some areas more than others; also, most of the scheduled apartments are in the luxury bracket, thereby giving opportunities for property owners to invest in the lower ends of the market.

If you would like to discuss opportunities for investing in property, then please don’t hesitate to call us; we hope that we can pass on our local knowledge and expertise.