Seattle-area apartment market in equilibrium for first time in years

​By Marc Stiles  – Staff Writer, Puget Sound Business Journal

The rate of apartment rent growth across the four-county metro Puget Sound region area is neither super high or super low, and the vacancy rate is similarly on an even keel.

That's according to Seattle company Commercial Analytics' report, which found that the vacancy rate in March was 2.75 percent while rents grew by 2.28 percent over the preceding six months. During the height of the boom rents were much lower and rent growth was off the charts.

"The market is fundamentally in equilibrium. I haven't seen that since the crash," said appraiser Brian O'Connor of O'Connor Consulting Group, a Commercial Analytics co-founder. "It's like we are in this Goldilocks moment."

The results varied by county, with rent growth ranging from 1.6 percent in Snohomish, for all sizes of apartments. One bedrooms there rented for an average of $1,379. Overall rents rose 8 percent in Kitsap, where the average rent for one bedrooms was $1,336.

King County rents increased 2.2 percent for all sized apartments, with the average one-bedroom rent at $1,873. There was a 2.3 percent rent increase in Pierce County, where the average one-bedroom rent was $1,190.

The Eastside showed a much stronger pattern of rent growth than any other King County submarket, with an increase of 4.1 percent versus 1.35 percent in Seattle. "The Seattle market is clearly beginning to show signs of the significant new supply of units," O'Connor wrote in the report.

Rent growth in downtown, South Lake Union and Belltown was 1.35 percent. Most everywhere in Seattle, rent growth was under 2 percent, with the University District and Northeast Seattle seeing a gain of nearly 1.1 percent. The lone exception was 4.4 percent in West Seattle.

Developers continue to build. Region-wide, 15,500 apartment units are under construction, up 10.3 percent, according to Commercial Analytics. Four-fifths of the units are going up in King and Snohomish counties, and two Vancouver, Canada companies, Onni Group and Westbank, lead the way with a total of 2,300 units.
Developers are homing in on sites around transit stops, and they're becoming more and more loath to building in Seattle with the city's higher "mandatory affordable housing," or MHA fees compared to other cities.
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O'Connor, who advises developers, said builders have taken a shine to Shoreline. Ask why, and "the first words out of their mouths are no MHA fees," he said.