Huge 2017 Apartment Boom Should Soften Housing Market

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Good news for renters (and maybe hopeful home buyers, as well): 2017 should see the beginning of relief for the Seattle area’s crazy rental housing market. The infamous $750-a-month 130-square-foot ‘prison cell’ apartment just might have marked the market peak. According to the Seattle Times, Seattle’s record apartment boom is ready to explode.

And not a moment too soon. The last few years have seen some serious imbalance in housing supply and demand in the Seattle area:

Seattle Area: Yearly Addition of Housing Supply & Demand

Here’s the same data, but with the imbalance between supply and demand shown more directly:

Seattle Area: Yearly Balance of Housing Supply & Demand

In 2015 and 2016, the Seattle area added 23,800 more new households than housing units. That’s nearly twice as large as the next-largest deficit we’ve seen since 2000.

Meanwhile, after bottoming out in 2013 and 2014, occupancy rates are rapidly climbing in all three counties:

Seattle-Area Housing Occupancy Rates

According to the Seattle Times, nearly 10,000 new apartments are expected to come on the market in the city of Seattle alone this year, followed by another 12,500 in 2018. If we see a similar trend across the whole Seattle metro area, we can expect to see a lot more balance in the rental market soon. When you combine that with an increase in mortgage interest rates, it’s entirely possible that we will also see the local real estate market start to soften in 2017.

Hit the jump for additional individual charts of housing supply and demand for King, Snohomish, and Pierce counties.

Seattle Area: Housing Supply and Demand added since 2000

King County: Yearly Addition of Housing Supply & Demand

Snohomish County: Yearly Addition of Housing Supply & Demand

Pierce County: Yearly Addition of Housing Supply & Demand

Seattle-Area Housing Supply and Demand


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

259 comments:

  1. 251
    justme says:

    RE: Bob @ 242

    >>Trump wants this market to crash because he knows it’s unavoidable, and he’d rather see it happen now so Obama takes the blame.

    Good point, Bob. Trump wants markets to crash for multiple reason. One is to avoid/deflect blame. The other is to get himself some sanely priced real estate.

  2. 252
    Walter says:

    By Kary L. Krismer @ 226:

    By Walter @ 223:

    RE: Kary L. Krismer @ 204

    I-35, I-135, and I-70 are tolled through most of Kansas. While part of the Interstate system, they are owned and operated by a private partnership the Kansas Turnpike Authority.

    I’m sure there are other stretches of interstates elsewhere that are similarly tolled.

    Has that been just since 2014?

    RE: Kary L. Krismer @ 226

    It’s been that way since 1956.

  3. 253
    Walter says:

    By softwarengineer @ 233:

    RE: Kary L. Krismer @ 226
    Tolled Roads in Kansas City?

    I travel Kansas City [all freeways], even I-70….no recent tolls anywhere to my knowledge. Also the roads have no traffic, even rush hour [like Seattle in the 70s]…IOWs, you can easily take a parallel alternate route even if there were tolls.

    its paradise IOWs….LOL

    Property tax is cheap too, albeit they do have an income tax and sales tax.

    I-70 Tolling starts west of Kansas City, KS at Exit 236 and continues east to Topeka, KS at exit 183. I’ll agree that traffic in the KC Metro area is nothing to complain about compared to Seattle.

    KCMO has a 1% income tax, in addition to a combined city+state sales tax of 8.35% (this includes groceries), and a state income tax. That city income tax is due if you live or work in KCMO, so even people living in the Kansas suburbs can be liable for it.

  4. 254

    By Walter @ 252:

    By Kary L. Krismer @ 226:

    By Walter @ 223:

    RE: Kary L. Krismer @ 204

    I-35, I-135, and I-70 are tolled through most of Kansas. While part of the Interstate system, they are owned and operated by a private partnership the Kansas Turnpike Authority.

    I’m sure there are other stretches of interstates elsewhere that are similarly tolled.

    Has that been just since 2014?

    RE: Kary L. Krismer @ 226

    It’s been that way since 1956.

    Here’s the explanation. It pre-dates the Interstate system and was apparently just blended it. But it originally may have just been one of the many toll roads back east–I remember them when I was a kid around 1970.

    https://en.wikipedia.org/wiki/Kansas_Turnpike

  5. 255
    N says:

    http://vancitycondoguide.com/flip-flopping/

    Vancouver Reverses Foreign Buyers Tax for Foreigners with Work Permits

  6. 256
    Blurtman says:

    Price/sqft: $406 on a very “large” 7177 sq ft lot. Buy now or be priced out forever!

    http://www.zillow.com/homes/1530-246th-Ave-NE-.num.-56,-Sammamish,-WA-98074_rb/

  7. 257

    A comment above about the exciting issue if Kansas tollways is being held in moderation due to too many copy/pastes. Anyway, apparently that part of the highway was built as a tollway before the Interstate system, and then blended into the system. So the tolls remain.

    https://en.wikipedia.org/wiki/Kansas_Turnpike

  8. 258
  9. 259
    justme says:

    RE: Kary L. Krismer @ 257

    You’re going to need a lot of Russians to counteract the general downdraft in the Miami condo market.

    http://www.heraldtribune.com/news/20170128/foreign-buyers-passion-fades-in-florida

    “International buyers still love Florida real estate, but their passion is fading. Foreign buyers spent $4.3 billion less on residential real estate in the Sunshine State last year, an 18 percent plunge. With shrinking buying power, foreigners are spending less here. The average price they paid for a Florida residence dropped from $539,000 in 2015 to $412,000 last year.”

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