Expect ‘new highs’ for Seattle apartment rents
Puget Sound Business Journal
Date: Friday, May 13, 2011, 9:27am PDT
The 645-unit Shorewood Heights apartment complex on Mercer Island sold for $109,927,500 in September 2010.
Apartment building owners in the Seattle area will be raising rents to “new highs,” according to a new apartment study.
A hiring surge by local companies, coupled with the apartment building cycle winding down, will contribute to a tightening apartment market and higher rents, according to Marcus & Millichap’s Apartment Research 2011 Market Outlook.
The report indicates that employers in the Seattle area will hire 36,000 new positions this year, up 2.2 percent from last year. Construction will slow to just 915 new apartment units this year, down from 4,800 apartments delivered last year.
Vacancy rates will slide downward to 4.9 percent, and rents will go up an average of 3.9 percent to an average of $1,026 per month.
“As job growth and conﬁdence in a sustained economic recovery restored rental household formation to a more normalized pace last year, the Seattle-Tacoma apartment market began a swift recovery, posting the largest inﬂux in occupied stock in two decades. Leading job creation through 2011 will be tech ﬁrms such as Amazon, Isilon and Salesforce.com, which will fuel apartment leasing activity primarily in the Downtown/Capitol Hill/Queen Anne submarket. Expanding head counts at Google, meanwhile, will drive renter demand for Class A units in both Fremont and Kirkland, especially with soft housing conditions marketwide encouraging many residents to consider rentals,” the report noted.