Weekend News Roundup – Rents Flattening, Development Halting

I was out of town all weekend in SF (driving back yesterday was not particularly fun, I assure you). Here’s a roundup of some of the local and notable national real estate stories that were waiting for me in my inbox upon my return this afternoon:

First up, a blog post by P-I real estate reporter Aubrey Cohen: Apartment market not so hot, report says

Dupre + Scott forecast in September that market vacancy (not counting new construction in lease-up) would rise from 4.8 percent this fall to nearly 6 percent by early 2010. They now say it will peak at 7.3 percent in June 2010 but won’t get back into balance until early 2012.

“Except for properties still catching up to the market, we expect no rent growth in 2009 and 2010,” they said.

Note that 17 months ago in response to one of the all-too-common rent-increase scare-mongering articles, I made the following prediction:

…rent increases will have tapered off significantly by this time next year.

Looks like I was a few months early, although I was predicting that increases would continue (rather than drop to zero), just at a lower rate more in line with incomes. Looks like a wash to me.

Also of note is this piece from the Seattle Times: Quadrant development at standstill

Washington’s largest homebuilder, Quadrant Homes, has stopped building and selling new houses at one of its developments, at least in part because of slow sales.

Quadrant’s move to halt work at The Ridge at Gig Harbor, a 120-lot project, may be the first work stoppage at a major subdivision in the Puget Sound area since the housing market turned south last year, several industry officials said.

It’s another sign of the downturn’s severity, they added.

Construction at the Gig Harbor development began last year. Streets and utilities are in place, and about a dozen houses have been built or are under construction.

Quadrant President Peter Orser characterized the Gig Harbor decision as “a suspension, not an abandonment,” and said it would be temporary. The company has suspended work on developments at other times during his 21 years with the company, he said, “but probably not to this degree.”

I mentioned this on the forum a month ago, but was unable to obtain the specifics of the situation.

Here are a few other local headlines:

Seattle P-I: Timber, but no homes, on 45,500-acre swath
Seattle Times: Vulcan buys another South Lake Union parcel
Seattle P-I: Navy buys 155 lots in Snohomish County

And just for good measure, here are a couple major national stories that folks emailed me over the weekend:

USA Today: Why home values may take decades to recover
CBS News: A Second Mortgage Disaster On The Horizon?

(Aubrey Cohen, Seattle Real Estate News, 12.12.2008)
(Eric Pryne, Seattle Times, 12.12.2008)
(P-I Staff, Seattle P-I, 12.10.2008)
(Seattle Times Staff, Seattle Times, 12.10.2008)
(Eric Nalder, Seattle P-I, 12.10.2008)
(Dennis Cauchon, USA Today, 12.12.2008)
(CBS News, 12.14.2008)

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.