Though not nearly at the break-neck speed of housing, it appears that the cost of renting is slowly creeping up in Seattle:
As the regional economy picks up and people from outside the area arrive for jobs, the overall demand for rented housing is increasing. In the Seattle area, rental rates have climbed by as much as 6 percent since last year, according to Global Real Analytics of San Francisco.
Of course, rental prices can’t take off in as wild of an increase as ownership prices, otherwise a large segment of the population would be unable to afford any kind of housing (I talked about that here). Even with Seattle’s high home prices though, many people are still exiting the rent scene to buy their own home.
While some U.S. cities are seeing an apparent trend of people remaining in rentals to avoid expensive home prices and rising mortgage rates, experts in the Seattle region do not believe this is occurring on a large scale. That’s despite the fact that condo prices rose 6.9 percent and single-family home prices were up 13.7 percent in King County in the past year.
People buying for the first time right now are crazy, if you ask me. Well, maybe not crazy, but it just doesn’t seem like the best plan to me. The smart money is still on renting in Seattle:
Rents have come down about 20 percent since 1998, when vacancy rates hovered under 3 percent, she said. Then vacancies soared to between 12 and 18 percent after the dot-com bust.
Vacancy rates are now about 7 percent, just higher than the optimal rate of about 5 percent, she said.
Of course, I would venture to guess that supply is increasing nearly as fast as demand. On one side of the house I live in there is a nearly-complete 30-something unit apartment complex is having the finishing touches put on it, and on the other side there’s one of those big “Notice of Proposed Land Use Action” signs notifying us of the plan to build 6 townhomes and a 22 unit apartment building. Plus I think there have been at least 3 new apartment buildings that have opened in the last year within a 1 mile radius of us. Anecdotal evidence of course, but that’s the feel I have.
All I really know is that my rent is staying rock steady at $0 a month.
(Brad Wong & Carol Smith, Seattle P-I, 08.26.2005)