Seattle Undergoes Rare Inventory Increase with Relief Expected on the Horizon Amidst a Flurry of New Condominium Projects in the Pipeline
The Seattle area real estate market is in dire need of home inventory and some relief has come for buyers, as the Northwest Multiple Listing Service reported that real estate brokers added 14,524 new listings to the market in May, which was the first time this figure has topped 14,000 since May 2008.
The Seattle Times reported last month that 1 in 6 single-family homes in the Seattle area housing market are actually rented out. The recession greatly affected Seattle area real estate: from 2000-2008 about 13%-14% of Seattle area single-family homes were rented out, but since 2009 roughly 16%-17% of residences are home to renters. That’s an increase of 30,000 single-family homes that were converted from for-sale to rentals, with a total of 145,000 Seattle area homes currently rented.
For years, the Seattle rental market has been fiercely competitive, but now landlords are seeing an increase in vacancy rates. Online apartment ads now feature giveaways of Amazon Echo’s, Amazon gift cards, or even a free month of rent. The apartment-construction boom in Seattle has been immense, as the city added more new apartment units in the past half-decade than in the last 50 years combined. However, it’s estimated that 40% of all brand-new units across the region and 26% of apartments in downtown Seattle are sitting empty.
Will landlords start to sell these rental homes and apartments? This seems to be a valid solution to many of the Seattle area’s housing inventory issues. Condominiums are in high demand in the Seattle area, and it’s easy to see why. They offer everything from a lock-and-leave lifestyle for the baby boomers generation to density and access to all the city has to offer for millennials. Demand for new, attainably-priced condominiums was on full display in February 2018 when a reservation event for 203 KODA Condominiums drew long lines. 95% of the homes were reserved in the first 24 hours, with another 80 reservations in place for second and third positions.
Developers seem to have taken note of this condo trend. Ten known high-rise condominium buildings are under development or planned throughout downtown Seattle neighborhoods and are set to deliver between 2018 and 2022. Roughly 21% of these 3,000+ units have already been reserved. Condominiums are an important yet relatively underserved component of Seattle’s housing market. With the announcement of several new projects in the pipeline, it is clear that a new condominium cycle has arrived and that developers need to catch up to demand.