It’s a Great Time to Rent

Here’s another new site to add to your list of where to search for rentals in Seattle: Zillow. Zillow announced yesterday that they have added rental listings to their site.

Since this is a brand new feature, and they apparently have not made any partnership deals to pre-seed it with data, there aren’t currently any listings in the Seattle area, but once this starts to get some traction, I think it has some great potential. Right now the most comprehensive way to search for rentals continues to be Craigslist, which has a frustratingly limited interface for this kind of search, and is constantly plagued with misleading ads.

Another great feature that they announced in conjunction with their rental search is the ability to directly compare monthly costs for rentals and for-sale homes in your search region.

We are also proud to offer an innovative search comparison in which home shoppers on Zillow can now search for both rental and for sale homes in their area and compare monthly costs. This new, monthly payment search filter allows shoppers to compare rental and for sale homes side-by-side based on a monthly payment they can afford, and decide what the best solution is for them.


As long as we’re talking about renting, I thought I’d mention a Seattle Times piece from the weekend that I posted earlier on Twitter: Good news for renters, buyers, but tough times for landlords

When Jennifer Worick, a 41-year-old Seattle social-media consultant and author, began window shopping for a new apartment in July, she had an ambitious wish list: She wanted a place bigger than her 650-square-foot Wallingford studio, she wanted to live in a walk-friendly neighborhood near public transportation and she wanted to lower her $1,050 monthly rent.

Typically, moving into a better apartment and paying less for it is improbable. But these aren’t usual times for the Puget Sound apartment market.

Mike Scott, of Dupre + Scott Apartment Advisors, says that landlords are facing the worst market they’ve seen in three decades. Excessive new condo inventory, job losses and home prices falling to levels comparable to rent have pushed the Puget Sound vacancy rate to 7.2 percent, up from 4.8 percent a year ago, according to Dupre + Scott data.

And rents that fell 4 percent during the 12 months through September to an average of $959 per month are expected to fall another 8 percent during 2010 and another 1 percent in 2011 before slowly turning around.

Excess inventory and falling home prices are combining to force down rents. This is pretty much exactly what I predicted would happen once the market cooled off, although the trend is definitely being exaggerated by the brutal economy. In 2007 when the local press was pushing reports about rentals being “increasingly scarce and more expensive,” warning that “rents are rising steeply and vacancies are few,” and claiming that the “housing slowdown is expected to send rents higher,” this site was alone in calling for rent increases to taper off.

It is interesting to compare the above article about the rental market to this one from just over a year ago: Demand from Puget Sound area renters sustains a ‘landlord’s market’

Despite the slightly lower prices investors have been willing to pay for apartment properties here and elsewhere of late, Hart said, it would take a real economic calamity to significantly diminish renter demand.

Seattle’s Dupre+Scott Apartment Advisors reports that rents have just about hit the highs reached before the Sept. 11, 2001, terrorist attacks helped spawn a four-year slide. The firm is projecting that King-Pierce-Snohomish rents will rise 8 percent this year, following a roughly 7.5 percent gain in 2007.

I was critical of those forecasts at the time, and nobody even had to pay me $495 to find that out.

(Chloe Harford, Zillow, 2009.12.14)
(Jane Hodges, Seattle Times, 2009.12.12)

0.00 avg. rating (0% score) - 0 votes

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.


  1. 1
    DavidB says:

    “I was critical of those forecasts at the time, and nobody even had to pay me $150 to find that out.”

    Another example of how the media simply reports industry press releases without any critical analysis of the information.

    I heard a so called financial planner on the radio last week (KOMO) advising people that now is the time to buy a home so they could take advantage of the tax buyer credit. Of course she didn’t say anything about the possibility that home prices continue to decline.

    Whatever happened to nonbiased balanced reporting?

  2. 2
    explorer says:

    I took your analysis seriously, The Tim. Dupre & Scott don’t take rental house or multi-units under 20 into consideration in their surveys, and that is a major driver of rental prices as well.

    The corporate REITT buildings are not the only game in town. This coming spring and summer should be very interesting. I’m probably not the only one who negotiated their lease renewal to expire in that time period.

  3. 3

    RE: DavidB @ 1

    Tax Credits to Home Buyers a Failure

    Article in part:

    “…The National Association of Home Builders said Tuesday its housing market index fell by one point to 16 this month, reflecting concern that job losses and a slow economic recovery will continue to stifle demand for new homes despite the extension of a federal tax credit for buyers….”

  4. 4
    DavidB says:

    Softwareengineer @ 3

    It’s good to see a report by an industry group that’s not proclaiming a turn around of the housing industry. We certainly don’t see any balanced reporting by the NAR Lawrence Yun.

  5. 5

    Foreclosed Home Demand Dips

    Article in part:

    “…U.S. home buyers are less willing to buy foreclosed properties than they were six months ago, citing risks like hidden costs…”

    Another good reason to keep renting.

  6. 6
    mukoh says:

    Try as well. theirs is pretty good.

  7. 7
    Urban Artist says:

    Most of the articles seem to focus on apartments not rental homes, which are still expensive in the Seattle area. Renting is fine if you’re single but if you have a family it is a pain. Don’t even get me started on landlords/slumlords. Right now renting makes the best financial sense but renting being desirable not so much.

  8. 8
    HappyRenter says:

    By Urban Artist @ 7:

    Most of the articles seem to focus on apartments not rental homes, which are still expensive in the Seattle area. Renting is fine if you’re single but if you have a family it is a pain. Don’t even get me started on landlords/slumlords. Right now renting makes the best financial sense but renting being desirable not so much.

    What about rental condos? They tend to be pretty confortable, too. As long as you don’t plan more than 1-2 kids.

  9. 9
    Rick says:

    Since selling my Mercer Island home Dec 2005 I’ve been renting usually at about 25% of the homeowners mortgage costs, currently I’m renting a brand new $3.8 mil seattle condo for $6k a month and have about a year left on my lease.

    The highend rentals have been hit hard, and I’ve never seen so many available on the MLS in the area before.

    I’ve found all of my rentals by contacting sales listing that have been on the market and offered to rent them for 18 months with 6 months upfront, I also check their last mortgage statement to make sure they are not behind, I don’t care after that as it should take 9+ months to get tossed out if they don’t pay.

    I see lower rates at least until 2011 with no chance they will recover for at least 10 years.

  10. 10
    Urban Artist says:

    I had a friend that tried to find a condo that would work for a family and they found that most condos are not set up for families they are set up for singles, couples or retired people. They were looking in the Ballard area and they found only one or two 3 bedroom units and there were no amenities for families. They ended up buying a house.
    My brother lived in a big apartment/condo in New York that had all kinds of additional amenities for families, like play areas indoors and playgrounds outside. You don’t find that in most condos here in Seattle.

  11. 11
    wreckingbull says:

    RE: Rick @ 9 – While I don’t rent the kind of palaces you do, my last two rentals have been from real estate agents. I find this works well. Real estate agents usually buy nice places, put way too much money in them – thinking that prices will go up forever, then get caught with their pants down. This allows me to come in with an ‘insulting’ monthly offer that they end up taking. I’ll probably do the same thing for my next rental.

  12. 12
    HappyRenter says:

    By Urban Artist @ 10:

    My brother lived in a big apartment/condo in New York that had all kinds of additional amenities for families, like play areas indoors and playgrounds outside. You don’t find that in most condos here in Seattle.

    It’s kind of boring. Why is that? Too much space? Everyone wants a house with a backyard. Sooner or later, we will run out of space even here in the Northwest and they will start building condos for families like on the East Coast or Europe.

  13. 13

    RE: Urban Artist @ 10
    I have seen condos with family amenities like pools and playgrounds and basketball courts, but all of them in places like Issaquah, Des Moines, etc, not Seattle. In Seattle, they believe that children hurt property values?

  14. 14
    b says:

    By Urban Artist @ 10:

    I think the problem is that they were looking for a family-oriented condo in Ballard, which is akin to looking for a hipster shitbox walking distance to a bunch of trendy bars in Bellevue.

  15. 15
    Hugh Dominic says:

    As a hipster shitbox owner, I got a kick out of that reply.

  16. 16
    HappyRenter says:

    RE: Ira Sacharoff @ 13
    I have seen that kind of condos on Sand Point Way. There was a swimming pool and a tennis court. But all of this is not free. We saw there a spacious 2 bedroom condo for 400’000$ and over 500$ HOA.

  17. 17
    Mike2 says:

    Condo for families = townhouse. Well, not some of the crappy bubble townhouses crammed in 4 to a lot on a busy street, but some of the older townhomes are family friendly.

  18. 18
    David-2 says:

    RE: Rick @ 9 – That’s good advice. A question for you: How do you check their last mortgage statement? I’m also interested in other ways of checking out a potential landlord, if you know of any. I’m interested in renting something nice but would like to have at least a few months in the place before it gets foreclosed out from under me :-)

    And a question for anyone: What do you think of renting from a builder who has had townhouses on the market that haven’t sold, but is now going to rent them “until the market is better”? (I’ve seen places like this come up recently.) Would this be more risky or less risky, do you suppose, than renting from an underwater individual condo owner?

    — David

  19. 19
    fabuladocet says:

    Life is like a box of shit.

    Interesting word replace, Tim.

  20. 20
    Urban Artist says:

    The house they bought is one of those Ballard expensive hobbies. You know the house that hasn’t been updated since 1940. The crazy thing is they aren’t do it yourself types. I hardly see them any more I think they are overwhelmed with home ownership. It strikes me as odd that condos in Seattle had so few units for families. At some point a lot of those condo owners may have kids. Where did Seattle planning think all those people would go. I agree with Happy Renter, space is limited in the city. I also agree that looking for rentals on Craigslist leaves a lot to be desired.

  21. 21
    wreckingbull says:

    RE: Urban Artist @ 20 – Craigslist downright sucks for rentals. Too much greed and delusion going on. The best thing you can do is to make your own deal out of thin air. Approach someone and make them an offer, even if their home is currently on the market. I have been surprised at how well this has worked for me.

  22. 22

    RE: wreckingbull @ 21 – Why would you want to rent a house that is on the market? Would your offer be contingent on it being removed from the market?

    I would also ask the same thing of the seller. Houses that are both for sale and for rent often do neither.

  23. 23
    Haybaler says:

    RE: Rick @ 9

    I’m very interested in the strategy you imagine that you would use succesfully to remain in a rental for 9 months in the event the unit goes to Foreclosure.

    Would you please elaborate on that “blow by blow”?

  24. 24

    RE: softwarengineer @ 3

    Old News is Used by the Pink Pony Media

    If this month’s news contradicts last month’s old news, the Hades with it they say.

    Yesterday Home builders were seeing depression for Dec, now today’s news rehashes home building hogwash optimism from last month….LOL

    Is there any good/relable news source out there on RE, besides Seattle Bubble and equivalent type websites?

  25. 25

    RE: softwarengineer @ 24 – It’s really just the spin and the fact that they don’t give you enough information to form an opinion on your own. If you’re lucky you’ll get the stats for the past two months and one month for the prior year. Given the variation in stats from month to month, that doesn’t really tell you much, and often you don’t even get that much information.

    For example, in the article you linked, they said: “The Commerce Department says construction of new homes and apartments rose 8.9 percent in November to a seasonally adjusted annual rate of 574,000 units.” Is that 8.9% from the prior month or the prior year? Either way it’s only one or the other, when at a minimum they should give you both, and a lot more.

  26. 26
    Rick says:

    RE: Haybaler @ 23

    From my reading it will take at least 4-6 months of no payments before a notice of default will occur, give a 30 day period for all the paper work to get done, then you would get a notice of trustee sale, which you will then have 60-90 days to leave the property, so thats about 7 months on the low end and 10 on the high side if they can sell the property that is.

    I could be wrong but I can’t see how I could get kicked out in the first six months if they are current with their mortgage at the start of the lease.

  27. 27
    Rick says:

    RE: wreckingbull @ 11RE: wreckingbull @ 11

    We live in crazy times, we have to have deflation in home prices while at the same time we will likely see inflation in most everything else in the coming years.

    I just don’t need to see to own, I might consider it when rent prices equal 1% of the home value on a monthly basis, but when I can rent a $3.8 mil place (sales price not real value) for $6k instead of $38k which should be the rental price, which I could not afford.

    I’m seeing more and more high end fully furnished rentals now on the market, $6 mil homes for $11k a month fully furnished, in 9 months it will be $8k a month or less.

    There is a rental in the seattle four seasons residences which was $15k a month 6 months ago today you can rent it for $9k and likely it will drop again.

  28. 28
    Haybaler says:

    RE: Rick @ 26

    I was thinking you had a system for staying beyond the Notice to Vacate received after the Trustee’s Sale…..

    Of course, the new Housing Affordable Mortgage Program does have some protections for tenants who can now benefit from bonafide fair market rate leases…

    In your case, at your price point, I suspect a good attorney could extend the eviction process and get you a check for your trouble (from the bank).

    Hey!….When you are ready to relocate again I have a place I’d like to move you into with a pre-paid 6 month term…..:)

  29. 29
    CCG says:

    By Rick @ 9:

    Since selling my Mercer Island home Dec 2005 I’ve been renting usually at about 25% of the homeowners mortgage costs, currently I’m renting a brand new $3.8 mil seattle condo for $6k a month and have about a year left on my lease.

    Your mortgage was $24K/month? Golly, as we say around here.

  30. 30
    seattle says:

    So what is the incentive for a landlord to rent out his property if he is losing money? I can understand if someone is renting out a property that was bought 5 years prior or more. But those who got into landlording after that must be losing a lot of $$.

  31. 31
    Rick says:

    RE: David-2 @ 18

    Be upfront and ask them for the statement, then call and verify payment using the account number info with the lender.

    Not sure about checking on a construction loan by a builder but I’m sure it would be just as simple.

  32. 32
    Rick says:

    RE: CCG @ 29

    25% of the home owners mortgage I’m renting from, I didn’t have a mortgage on my home.

  33. 33
    wreckingbull says:

    RE: Kary L. Krismer @ 22 – No. In both cases the home was taken off the market as part of the lease agreement. Both owners saw it as an opportunity to “wait until the market recovers” (their words) My current landlord finally is starting to see the light, so I may consider a lowball when my lease expires.

  34. 34
    shane says:

    Just renewed my lease for 8% less, and we didn’t really negotiate too hard.

  35. 35
    Bilo says:

    RE: softwarengineer @ 3

    How did you conclude and state that “Tax Credits to Home Buyers a Failure” based on the article?

    The article actually states “New home sales got a lift this year from low mortgage interest rates and an $8,000 federal tax credit for first-time homebuyers. The incentive was set to expire on Nov. 30, but Congress extended it through April and expanded it to include $6,500 for existing homeowners”.

    Maybe 1st time homebuyers who took advantage of the tax credit didn’t stop the higher end of the real estate market from coming down (and shouldn’t), but that doesn’t mean that it was a failure. Was the tax credit supposed to do that?

  36. 36

    RE: Bilo @ 35 – Locally the tax credit got some projects that had been stalled out building again.

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.