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Seattle-area rents drop significantly for first time this decade as new apartments sit empty

Mike Rosenberg, The Seattle Times on

Published in Home and Consumer News

Grant Slemp and his wife moved from Redmond to one of the new South Lake Union buildings last month. "Prices were a little lower than I was expecting, which was nice," he said. Still, they were delayed when the first unit they looked at was rented out by someone else before they could put in an application.

Seattle remains among the most expensive places in the country to rent. The average rent across all unit types is $2,330 in downtown Seattle, $2,180 in West Bellevue, $2,120 in South Lake Union and $2,050 in Belltown, according to Apartment Insights/RealData.

On the other end, rents remain below $1,300 in SeaTac, Des Moines and Tukwila, and below $1,500 in most of Snohomish County.

Amazonia apartment frenzy

The vacancy rate across the region grew 0.8 percentage points to 5.4 percent in December -- the highest since 2010 -- a sign that supply has outgained demand.

In South Lake Union, where developers have been gung-ho about Amazon's rapid growth, so many new apartments have opened up in recent years that the vacancy rate increased from 4.6 percent to 7.1 percent (the figure excludes brand-new buildings just starting to lease up). That's a huge jump that gives the neighborhood the second-highest vacancy rate in the region, behind the Everett/Mukilteo area.

Among the brand-new buildings in South Lake Union, about one-third of apartments are sitting empty. And in the core of downtown, about two-thirds of newly opened apartments are vacant.

The flood of open apartments in South Lake Union suggests many of the thousands of new workers filing into Amazon's campus each year are choosing to live in other neighborhoods.

 

Overall, there are 24,500 apartments under construction now across King and Snohomish counties. There are an additional 35,000 units in the pipeline, although not all of those will get built.

The city of Seattle is getting more apartments this decade than in the prior 50 years combined. For the Puget Sound region as a whole, the current construction frenzy rivals the record apartment boom from the late 1980s, which was centered in the suburbs.

A separate Apartment Insights/RealData report found the average rent across Pierce, Kitsap and Thurston counties was just under $1,200 per unit in the fourth quarter. Rents in those areas were up slightly from the previous quarter and grew 7.8 percent from the previous year, indicating the South Sound rental market is now significantly hotter than King County, even as it remains a much more affordable option.

The rental slowdown runs counter to the for-sale housing market, where home prices continue to shoot up unabated at the fastest rate in the country. A key difference is that there are very few new single-family homes being built in the region, in contrast to the frenzy of apartment construction.

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