Rising housing costs have been steadily leading to higher rents in the Seattle area:
After enjoying years of discounts, Seattle-area renters should brace themselves for the thought of opening their wallets a little wider when they see their landlords in 2006.
In a trade-off to a rebounding regional economy, apartment rents are expected to rise as much as 5 percent because of more jobs, more job seekers and a limited supply of rental units.
In its 2006 annual report, Marcus & Millichap outlined those trends and said the average amount a tenant will pay this year will be $813 per month.
Asking rent — or the amount a landlord ideally wants — is expected to climb 2.9 percent to $846 per month. The real estate investment brokerage company defines the Seattle area as King, Snohomish and Pierce counties.
This is a topic that has been touched on many times here already, and this article doesn’t really offer any new insight into the whole thing, but it did bring up a thought I’ve been pondering in the last few days.
Last year, about 3,000 rental units were converted into condominiums, according to Marcus & Millichap.
While new rental units are expected to be ready late this year, experts said there was little new construction or apartment planning during the 2001 to 2003 recession.
That is contributing to the pinch.
So, while we’re just now experiencing the effects of low levels of building from ’01 to ’03, then if the market does slow back down again in the next few years, the building boom of the last few years will turn into a huge excess supply in around 2010 or so, leading to not only reductions in home sale prices, but also some serious discounts on rents. Good news for renters, bad news for homeowners and landlords—if it happens.
(Brad Wong & Angela Galloway, Seattle P-I, 01.20.2006)