Despite rapid growth of new housing from Tacoma to Snohomish County, rents and home price continue to climb, largely because the construction hasn’t kept pace with job and population gains.
We know about Seattle’s construction boom — but how does the region’s growing supply of housing stack up against other big hubs?
New Census data shows the Seattle metropolitan area doled out permits for 25,516 new housing units in 2016, the seventh-most in the country. That’s not bad at all considering we’re the 15th-biggest metro area in the nation. All the places that built more housing than Seattle last year are far bigger than us.
The Dallas area led the country with twice as many new housing units as Seattle last year (although it is twice our size), followed by Houston, New York, Atlanta, Los Angeles and Phoenix.
Seattle also ranks near the top for building apartments. About 63 percent of the housing units that were built in the area last year went into multifamily buildings — the seventh-highest rate in the country among big regions.
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Most of the places that built more housing than Seattle last year did so largely by adding tons of new single-family houses across wide swaths of land, which isn’t an option in urban places like Seattle that have run out of room to build new tract communities. Only New York, Dallas and Los Angeles built more multifamily units than Seattle last year (the vast majority being apartments).
The city of Seattle is expecting a record number of apartments to open this year. The real estate firm Marcus & Millichap projects the Greater Seattle region as a whole will be the 5th-busiest market in the country next year for apartment construction, dragged down partially by slower apartment growth in local suburbs.
The Greater Seattle region did have thousands of new single-family homes built last year, but most were outside the city. The metro area covered in the report spans from Tacoma to Snohomish County.
A big reason is that all that new housing isn’t keeping up with all those new jobs driving demand for homes.
The website employmarket.com crunched the housing construction data along with employment numbers from last year and found Greater Seattle last year was actually slightly below average for new housing construction when adjusted for job growth.
The Seattle area was tied for second in employment growth last year, behind Orlando but even with Salt Lake City and San Jose. Seattle has also been among the fastest-growing cities in the nation for population for several years now.
With demand and supply both growing rapidly, demand is winning. Apartment vacancy rates and the number of homes for sale are both historically low, driving up prices.
The Marcus & Millichap report forecasts Seattle to be tied with Salt Lake City for third in employment growth in 2017, behind Orlando and Fort Lauderdale.
So how does the current housing construction surge compare to the region’s past? It depends on what kind of housing.
Overall, the number of housing units getting built now in the Puget Sound region is roughly equal to the housing that went up during the boom in the middle of last decade.
But construction of single-family homes from Tacoma to Snohomish County is way down — to nearly half the levels seen during the few years leading up the recession last decade, and well below the number of new houses built in the late ‘90s.
Apartment construction, on the other hand, is way up: The number of multifamily units permitted last year was nearly double the average from the previous two decades. Experts are hoping this will finally slow down rent growth in 2017.
Overall housing construction has been rising for seven straight years, and the number of new units has tripled since the depths of the recession.
Here’s one last eye-popping number from the Census report: $5.3 billion. That’s the value of all the housing built in the Seattle region last year, up from $1.4 billion during the recession.