Thousands of new apartments aren’t putting a dent in the demand for housing caused by Seattle’s booming economy, according to a new report.
Tom Cain’s Apartment Insights Washington reports that the vacancy rate for 50-unit and larger properties in King and Snohomish counties, excluding new construction, was 3.86 percent in the second quarter, a new low for the region. That figure is down from 4.21 percent last quarter and 4.06 percent a year ago. Including new apartments that opened recently and haven’t filled up yet, the vacancy rate is 5.78 percent, down from 6.3 percent last quarter.
This means there are very few options for renters except for some of the new buildings that haven’t filled up yet, which tend to be more expensive than older apartments.
Average rents rose $64 to $1,549 per month, or $1.86 per square foot in the two counties. That is an increase of 4.1 percent over last quarter and 10.1 percent over last year. These rent jumps buck a national trend that shows increases slowing, Cain said.
“We are in awe about how robust this market is,” Cain said. “One would expect that the massive amount of new units that have hit the market over the past few years would slow rents and cause the vacancy rate to go up. But this is not happening.”
Downtown Seattle is the most expensive neighborhood in the two counties with an average rent of $2,344 per month or $2.92 per square foot. Downtown Bellevue is second at $2,183 per month, or $2.48 per square foot.
Fremont/Wallingford, Bothell and Redmond experienced the highest rent spikes this quarter at around 7 percent.
The least expensive areas in the two counties are the towns northeast of Everett at $1,105 per month, or $1.14 per square foot and SeaTac at $1,098 per month, or $1.40 per square foot.
Cain said 22,300 apartments are under construction, and 57 percent of those are in the city of Seattle. This year, 11,029 units are expected to open in the two counties, and another 13,493 should be done next year.
Counting all apartments in various stages of planning and construction yields a total of 64,359 units. That is 6,100 more units in the development pipeline than there was a year ago.
