What 2018 Holds For Seattle’s Residential Rental Market
Seattle’s 2017 was a year of many construction projects, consistent office demand from tech firms, and increasing multifamily rentals. These real estate trends were driven by the short supply as more people migrate to the area. Today’s post will share the forecast’s and data considered by RPA concerning Seattle’s residential rental market in 2018.
Seattle Could Be The #1 Emerging Trend In Real Estate
In 2017, PwC and the Urban Land Institute rated Seattle as #4 in overall real estate prospects to watch in the Emerging Trends report. Among the big drivers of its real estate boom are the rise of tech firms and population growth. But this year, the forecast places Seattle at the top.
The forecast marked a positive outlook for all residential sectors, specifically single-family housing. Among Seattle strengths include a growing population, diverse economy, and massive capital. The challenges will be the overall costs and availability of construction manpower.
This is good news for homeowners but not for the potential homebuyers and renters. While homeowners can sell their house at a high price and enjoy a high return, potential homebuyers and renters will suffer.
Trends That Will Influence Seattle Real Estate In 2018
Seattle’s 2017 was dominated by many construction projects, increasing multifamily rents, and consistent office demand from tech firms. The biggest driving force is the short supply as more people live in the area. Here are some trends that will influence the real estate in 2018.
- Growing Interest Of Investors On Secondary Markets
Secondary and smaller markets, in the Seattle area, are predicted to attract even more real estate investment in 2018. This is due to the large pool of a young, skilled workforce available in the city. Also, Seattle is considered a top market in the nation based on its living costs, labor force, and tech industry.
- Rising Population
The population growth of the city will lead to opportunities as well as challenges. Among the opportunities include the development of transits and provision of more housing to address the growing population. In the third quarter of last year, the average home price was reported to have increased to $446,500.
The challenges that come with population growth include increased traffic and unavailability of affordable housing. The increased labor force will make continued challenges in terms of housing and congestion.
Slow Seattle Rent Forecast
Seattle rents are increasing at their slowest pace in over five years and the slump is likely to keep going as many new apartments open. This benefits renters who have had to deal with years of large cost increases, according to the report from Dupre + Scott.
Still, a regular 2-bedroom apartment in Seattle topped $2,000 per month for the first time. Also, rents keep increasing in the suburbs south of the metro. The fastest rent increase occurred across the Puget Sound region while some of the recent hot neighborhoods have slowed down.
This report is great news for the renters because the shift of power starts to shift towards them. The opening of new apartments in the past five years hadn’t affected rents until recently as all the pricey new buildings were immediately occupied by people moving to Seattle. Recently, the number of new renters has started to decline considerably but the number of new apartments will keep growing during 2018.
Two further market signs that work well for the renters are increasing vacancy rate and high concession rate. For the past several years, the constant cost increases have already hurt many renters. Seattle rents have increased 65% since 2010.
Low Inventory Increases Home Prices
From 2012 to 2017, the housing inventory in Seattle has dropped remarkably. As a result, the housing demand has started to surpass the available supply. This created a favorable seller’s market conditions across the Seattle area.
The city’s real estate market is still very dense, and home prices are predicted to keep increasing steadily as a consequence. As reported by the national real estate brokerage Redfin, Seattle has a low inventory which makes it one of the densest housing markets in the nation. Given this situation, the house values in the area could surpass the nation over the next months.
Strong Housing Market Forecast
For 2018, the Seattle housing market is forecasting additional price gains given the recent supply situation and the high level of demand in the area. The real estate research team at Zillow predicts that the average home price will increase by 5.5% from June 2017 to the summer of 2018.
Local real estate agents are suggesting that home buyers need to be open-minded given the high level of competition in the housing market of the city. Home buyers may have difficulty finding an affordable house due to high competition.
2018 Might Be Good For Sellers
The 2018 real estate market is looking very positive for sellers. House prices could increase and fewer resale houses will be for sale due to imminent labor shortages, increasing mortgage rates, and higher lumber costs. New home sales have been swift as reported by the Commerce Department.
Most real estate experts are also forecasting a stronger year ahead for US housing. While this might be good for sellers, shopping could be tough for investors and home buyers.
We hope that the information found in today’s article beneficial to you. We also invite you to call us or visit the Real Property Associates website to learn more about RPA’s property management services.