SEATTLE APARTMENT MARKET SHOWS NO CLEAR TREND
Seattle, WA -- (April 23, 2002) -- Apartment rents in Seattle have risen by just $4 since the beginning of the year. A March survey just released by RealFacts, the multifamily data specialists, shows that the average rent in March was $864 a month, compared to a December figure of $860. In an area that has been suffering from one of the highest unemployment rates in the nation, that is a surprisingly strong performance due in part to the lease-up of new high-rent units. And although first quarter 2002 reverses a 1.2% decline in fourth quarter 2001, rents are still higher than they were in June 2001. Rents for individual unit types currently range from $715 for a studio to $1250 for a three-bedroom townhouse.
In contrast to virtually unchanged rents, occupancy declined significantly in the first quarter of 2002, dropping from the previous level of 93.1% to the current figure of 92.4%. Occupancy may be where the effects of unemployment are being felt, as people without jobs move out of the area or into the homes of friends and family. Seattle continues to be favored by both developers and investors because of favorable long-term factors, such as Pacific Rim trade, excellent natural resources, and a belief in the underlying importance of the computer industry. Thus investment in both new and existing complexes continues to be strong in Greater Seattle, with record per unit sales prices being paid and large numbers of new units being built. Major players in the multifamily industry such as AvalonBay, Archstone, and BRE continue to commits funds to Seattle, and other firms are expanding there. For example, California-based Sobrato Development recently cashed in a Silicon Valley office building and spent part of the proceeds buying two apartment complexes in the Seattle area.
An interesting change in the Seattle rental market is a significant reversal of the traditional move to the suburbs. In the past, complexes with the highest rents were in the suburbs with the best job markets, such as Issaquah, Bellevue and Redmond. But new development has increased the stock of housing in downtown Seattle, and now some of the highest rents in the CMSA are found in that area. A recently launched marketing effort by Legacy Partners and Equity Residential, among others, to promote the concept of downtown living may also have helped make it a more desirable choice for renters.