Rents across Seattle grew an average 6.3 percent in the past year — but most of that increase was because of pricey new buildings. Rents in older apartments are up just 4 percent.
Seattle rents are rising at their slowest pace in more than five years and the slowdown is likely to continue as a record number of new apartments open, a welcome change for renters dealing with years of hefty cost increases, a new survey shows.
Still, the average two-bedroom apartment in the city topped $2,000 a month for the first time, while rents continue to zoom up in the suburbs south of the city, according to the report from Dupre + Scott, which surveys landlords every six months.
Rents across the Puget Sound region are still rising faster than the historical norm, and the market remains hotter than most other U.S. cities. But the most punishing rent growth is likely behind us.
Some hot neighborhoods have cooled way down. In Ballard, rents are up just 2 percent over the past year — the smallest increase in at least a decade. Capitol Hill’s average rents are up just $35 from a year ago, about the same as inflation. And Rainier Valley rents dropped a bit since the spring.
The report lays out how the market, which has long favored landlords, is finally starting to shift toward giving more power to renters.
Seattle has opened more new apartments in the past five years than in the previous 25 years combined. But until recently that surge hadn’t affected rents, as all the expensive new buildings were quickly snatched up by the many people moving to the region.
That story is changing. The number of new renters has begun to drop considerably, and the number of new apartments continues to grow, with another record-setting year for construction set for 2018.
“Investors should plan for higher vacancies and fewer rent increases,” Dupre + Scott wrote in its report.
In Seattle, average rents went up 6.3 percent in the past year, the slowest growth since spring 2012 and down from double-digit increases in recent years. And when excluding new apartments, the actual rent increase faced by Seattle tenants is more like 4 percent.
Across all unit sizes, the average rent in older buildings is about $1,460, and it’s above $2,000 in new apartments, which usually come with fancy amenities.
At the same time, two other market signs are moving in the right direction for renters: The vacancy rate has grown again, while the average concession offered by landlords (like a free month’s rent) was worth $921 this fall, double the rate from four years ago.
For many renters, however, the damage of constant cost increases from the past several years has already been done. In all, Seattle rents have soared 65 percent since 2010. The typical Seattle renter now pays about $21,900 for rent over the course of a year, up from $13,200 at the start of the decade.
Brenden Martin and his wife pay $2,295 a month for a 2-bedroom on First Hill that has had constant break-ins recently. They both work and make good money, but with child-care expenses and student loans and car debt to pay off, they can only save about $500 a month.
Their options: move an hour away — north to Marysville or south to Tacoma — for something cheaper, or stick it out.
“It’s a real unfortunate situation all around,” Martin said. “We have looked at leasing elsewhere in Seattle but coming up with security (deposit) and first and last month’s rent just isn’t realistic either.” Neither is buying a home: “How are we ever going to save up for a down payment of 20 percent on a half million-dollar home?” he said.
Raven Campbell and her husband cram into a 550-square-foot box in Beacon Hill for $1,400. But with a rent increase likely coming and the couple thinking about having kids, they’re looking to move to Everett, which is much cheaper.
“I really don’t want to leave Seattle. I don’t want us to withdraw from social activities we’ve built up here because of the distance from Everett.” Campbell said. But the reality is, “If you find a two-bedroom in Seattle that takes pets for less than $1,800 a month, you’re very lucky.”
In Seattle, average rents are at an all-time high for each unit type, and have roughly doubled in the past decade.
The average studio now rents for just under $1,400. The typical one-bedroom is $1,770 and a two-bedroom, one-bath runs for $2,010.
Rents are still soaring in many neighborhoods and cities, though the biggest increases are in the outlying parts of the region, where rents are more affordable.
In Southern King County, rents are up nearly 10 percent in the last year, to a new average of $1,380 across all unit types, with especially large increases in Burien and SeaTac. Pierce County rents are also up nearly 10 percent, to $1,130.
Elsewhere, Beacon Hill rents are up 14 percent, to $1,350. Rents in the pricey West Bellevue market grew 11 percent to a new average of $2,380.
Even with the market slowdown, Seattle still has among the fastest-growing rents in the country.
The most recent data from Zillow shows rents in the Seattle metro area are soaring three times faster than the national average. But just a few months ago, local rents were growing eight times faster than the U.S. average.
Altogether, developers are on track to build 46,000 units across the region between 2017 and 2019, increasing the total rental housing stock by 17 percent, according to Dupre + Scott.