Seattle Apartment Vacancies Hit 11 year low - Demand Stronger than Ever.

Two separate articles were recently published detailing the particular scenario in which Seattle’s housing market finds itself, one by Geekwire and one by the Puget Sound Business Journal. Both articles come in the wake of a recent market study published by Apartment Insights Washington, which puts Seattle’s housing market at 3.86% vacancy this quarter, the lowest since the company began tracking the market in 2005. But, as each article points out, and as every Seattleite knows all too well, development here is surging.

LET’S LOOK AT THE NUMBERS

The low vacancy rate in Seattle is just one piece of the puzzle. To understand what’s really going on here, there are two other figures you need to look at:

• The amount of new apartments currently being built 
  According to Apartment Insights, there are 21,633 units currently under construction in King County, with 13,140 slated to open in Seattle by the end of 2016
• Recent changes in average rent
  Also from Apartment Insights, average rents increased 1.7% since last quarter, and 10.7% in the last year

Demand for a Seattle Apartment has never been stronger

Many have thought that more apartments would mean more vacancy, which it traditionally has, and that rent would subsequently be driven down. It’s basic supply and demand: the more available apartments there are, the cheaper they become. But, this isn’t the case.

Even though there are nearly 15,000 units set to open in the city by the end of the year, rents continue to rise, and vacancies continue to drop, which means that demand is stronger than ever.

As our friend over at the Puget Sound Business Journal so succinctly put it, “If you thought the Puget Sound region's flurry of apartment construction would drive rents down, you were wrong.”

Why such demand?

In two words: job growth. Another useful statistic included in Apartment Insight’s study stated that the number of job openings within the greater Seattle area had increased 3.85% month-over-month in February with no sign of slowing up.

Just take a look at Amazon’s new headquarters currently under construction in South Lake Union. That type of structure, which serves as a workspace housed within an actual indoor greenhouse, is wholly indicative of the demographic that’s moving into Seattle right now. 

Thanks to the influx of workers coming to take advantage of Seattle’s advantageous job market, the city’s economy and housing market both continue to grow, and it’s difficult to say when the vacancy rate will rise again.

 

For now, though, this robust demand will keep developers busy with the building, leasing manager busy with leasing, and marketing teams busy with the advertising of lifestyle communities all across the city.

From the perspective of the public, rising rents costs alongside continual development may seem surprising. But renters aren’t the only ones affected. In the last year the average price of a home in Seattle has risen 24%, and the average price of a condo has risen a whopping 33%.  
Sure, the hard data may seem staggering, but at Leased Up, we’re not entirely surprised, and here’s why:

• The Current Average Absorption rate for newly built apartment buildings is 18 units/month.

• Our recent Seattle clients have doubled and in some cases tripled that number.

• “In the 6 months since we opened our doors, we’ve had no problem reaching 99% occupancy” - Kathy Klingele, Principal at Mack Urban

These numbers from Apartment Insights don’t surprise us because we see evidence of them every day in our work helping clients lease up their buildings. The demand is certainly high, but competition between individual apartment communities is even higher.

So, how do newly built Apartment Communities stand out?

To stay competitive in an ever-growing market like Seattle, you’ve got to leverage to best, most current tools to capture the attention of potential lessees. Just as real estate developers don’t have the time or resources to manage and lease individual units, property and leasing managers don’t have time to market their building and engage with the public. And that’s where Leased Up comes in.

Leased Up has the expertise and combined experience to act as your apartment community’s fully outsourced marketing department. We can engage with the public, get you noticed, and get your building leased up whether you’re in a densely competitive market like Seattle, or anywhere else in the country.

If you’re interested in the different ways in which Leased Up can help you lease more apartments sooner, we’d love to hear from you.