Renters filling up apartments, paying more
A tightening apartment market is leading to higher rents, especially in downtown areas of Seattle and Bellevue.
Seattle Times business reporter
Apartment vacancy rates in King and Snohomish counties fell for the second straight quarter, fueled by tech workers coming from outside the Seattle area, according to a research firm.
Those new apartment dwellers also paid more as the average monthly rent continued to climb after dropping slightly at the end of last year.
Tom Cain, of the research firm Apartment Insights Washington, said both trends will likely continue into the next quarter as Amazon.com, in particular, keeps growing. Vacancy rates dropped 0.38 percentage points from the first quarter to 4.83 percent among complexes with 50 or more units, Cain said. A year ago the vacancy rate was lower, at 4.69 percent, but more renters have been moving out into their own homes, Cain said.
The monthly average rent increased 2.8 percent, up $31 from the first quarter to $1,125.
The Seattle and Bellevue downtown markets experienced sharper vacancy declines and stronger rent increases than the average. Seattle's vacancy rate fell 0.74 percentage points to 4.8 percent this quarter, and Bellevue's rate fell 0.35 percentage points to 4.09 percent, according to Apartment Insights. Both areas saw rent increases above $100 a month.
These areas are also in the midst of a construction boom.
Of the 10,206 units under construction in King and Snohomish counties, 1,976 are in downtown Seattle and 223 are in downtown Bellevue.
Bob Wallace, CEO of commercial real-estate firm Wallace Properties, said developers are interested in the downtown areas because of several factors, primarily job growth and the popularity of apartments.
Companies such as Microsoft, Amazon and Boeing are adding employees, making construction in downtown Seattle and Bellevue attractive, Wallace said.
"There's a very direct correlation between demand for apartments and employment growth," he said.
Construction under way in King and Snohomish counties could alter vacancy rates as new apartment complexes open, but Cain said the numbers likely won't change until the end of next year.
Latisha Coulter, community director for Twelve Central Square apartment complex in downtown Bellevue, has seen many people new to the area move in during the last few months, even after the complex increased its monthly rent by $200.
A large number of them work in technology, Coulter said, and have a move-in allowance, so price isn't as important a factor.
"They want to be close to their companies," Coulter said.
With all the construction, Wallace said people have begun to worry about overbuilding. "We're just kind of in this perfect storm where there's a lot of demand and not a lot of supply ready to be delivered," he said.
Connor Radnovich: 206-464-2718 or email@example.com