As we enter the second quarter of 2019, Seattle renters find themselves in a uniquely favorable situation, while homeowners scramble to keep up with an increasingly competitive market.
As the Pacific Northwest’s largest housing market, here is the land of tech and real estate, with Google, Facebook, and GeekWire all finding a home within Seattle’s rainy landscape. These companies have all served to reinforce the local economy and keep the housing market strong.
While Seattle is not an area known for its affordability, a recent housing slump is suddenly opening the market to new buyers and renters who were previously priced out of these elite neighborhoods.
2019 marks a key time for both new and experienced investors and homeowners to enter the Seattle rental housing market.
At Onerent (now Poplar Homes), we carefully monitor the changing trends within the Western housing market, and Seattle has captured our attention for some time now.
Seattle is home to more than 700,000 residents, and Zillow reports a home value index of $729,400.
Seattle itself is much more expensive than the metropolitan area, which includes surrounding areas Tacoma and Bellevue.
Rent is about $2,250 in the metro area compared to Seattle’s almost $2600. Seattle also averages $521 per square foot, while the metropolitan area is around $277 per square foot.
That’s a huge difference. And yet, there’s less than a $5,000 difference in the sales price between the two areas.
That means that homeowners are the real winners here, buying properties at super affordable prices and then charging sky-high rent.
But first, you have to get tenants in the door, a growing feat as more Seattle homeowners take notice.
Vacancies were widely reported at the beginning of the year, with several media outlets reporting that 1 in 10 apartment units sat empty. There’s a growing issue of oversupply within the rental housing market, and landlords are becoming increasingly creative in their efforts to gain prospective tenants.
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Housing advertisements abound, offering perks like free rent and parking or generous gift cards in exchange for a standard rental lease.
Landlords may be faced with a creative marketing challenge, but it only proves that the Seattle housing market is alive and well as we enter the second quarter.
So, what does this mean for new, burgeoning investors that are interested in entering the rental market? Is the market stable, or will it crash like some experts predict?
Let’s look at the facts.
Zillow predicts several foreclosures within the coming years, particularly in Seattle itself where homes are so much more expensive, and residents have so much more to lose.
All of those residents will need somewhere to go after their foreclosures, likely entering the rental market in the near future.
The Seattle Times also reported that Seattle “had the fourth-most multifamily units approved for construction in 2018, according to Census figures.”
The 2010 census estimated just under 310,000 housing units, which grew to over 350,000 by 2017.
The presence of many powerhouse companies in town continues to guarantee demand, even in a climbing market.
Amazon’s growth has been an incredible boost to the Seattle housing market. Despite climbing housing costs, it continues to drive – and maintain – new residents to the Seattle area.
Amazon, Microsoft, and Costco also call Seattle home.
Many companies come to Seattle from California, running from stifling business regulations and California’s exorbitant income taxes, the highest in the country.
California’s pitfalls guarantee a healthy influx of regular newcomers to the Seattle area, all of whom will need to rent or buy a home for their family.
It’s a good thing, too.
Renters dominate the Seattle market; half of Seattle residents rent compared to the national average of one-third.
With a younger and more transient demographic, renting simply makes more sense.
Seattle boasts the largest school district in the state and several top-rated school districts, attracting students from all over the world – all of whom also need a home.
Millennials make up a majority share of the rental market. Onerent found that 34 percent of renters want to buy a home in their area in the near future. 35 percent do not, while 31 percent is not sure.
Rent control is also a non-issue within the state, now that Washington has protections in place.
Landlords are free to price their properties according to market demand, and there are additional provisions in place to ensure each lease.
The rental market is simply too attractive, and with a healthy availability of properties, renters have no reason to uproot their lives and move to a long-term mortgage.
Seattle continues to enjoy a healthy and thriving real estate market, particularly within the rental housing market.
An impressive return on investment, combined with growing demand and property prices, guarantees Seattle’s place amongst the top housing markets in the country.
At Onerent, we can help arm you with all the tools you need to enter and conquer the Seattle rental housing market. As the bridge between landlord and tenant, we can connect you with tomorrow’s renter.
Get a free rent estimate for your rental property in Seattle from our real estate experts at Onerent.