Apartment Complex Sale Prices Soaring

As has been pointed out on this blog in the past, it isn't just the personal residential real estate market that's in bubble territory in Seattle. Huge corporations have been buying and selling entire apartment complexes at record rates, resulting in (of course) dramatically increasing prices:

For anybody who's lost a bidding war for a house in Seattle, here's a small consolation: Some of the biggest real-estate magnates in the world are enduring the same experience as they try to buy into the region's hot housing market.

In what brokers are calling "a perfect storm" of economic circumstances, investors from Australia to Bellevue are pouring money into Seattle-area apartment complexes, breaking sales records and driving up prices because they see rents about to take off.

Some $2.1 billion worth of apartments have changed hands in the Seattle metro area this year, triple the level of two years ago, and the traditional year-end flurry of sales hasn't even happened.

Considering that rents have been increasing at a much slower pace than real estate prices, I just don't see where the return would be.

(Tom Boyer, Seattle Times, 11.03.2005)