It would appear that rents in the Seattle area really are going up, though still at nowhere near the same rate of alleged home appreciation.
Snohomish County's apartment market is feeling the squeeze, with the second-quarter vacancy rate dropping from 5.6 percent in the first quarter to 4.6 percent, according to apartment research firm Cain Inc.With interest rates on the rise, and year-on-year home appreciation still in the double digits, renting still looks like a much better deal to me. I've been reading anecdotal tales of commenters here of rent increases anywhere between 4% and 10% in their latest lease renewals. In Monday's open thread Peter Taylor made the following comment:
The Seattle-based firm attributes the healthy rental market to continued job growth, inmigration and housing costs.
"The widening housing affordability issue caused by higher interest rates and surging home values is making renting the only housing option for more and more people," the company said in its quarterly report. "Yet, since the rental market has been flat for the past five years or so, renting is attractive and affordable to many."
While Snohomish County's vacancy rate of 4.6 percent bettered King County's 4.8 percent, King County enjoyed a dramatic decrease in concessions, from $18 to $9. Snohomish County's declined from $12 to $9. At this rate, overall concessions should disappear by the end of the year, according to Cain.
Throughout Snohomish and King counties, a total of 223 newly constructed units were added to the inventory during the second quarter of the year. At the same time, however, 401 units were removed from the inventory through condo conversions in Everett, Kirkland, Issaquah, Seattle and Federal Way.
"We anticipate that the 2 percent quarterly increase in rent levels that we have experienced this year will continue through the remainder of the year," according to Cain.
Housing isn't affordable in King County, period. Renting is getting more expensive and home prices are bordering on insanity. Personally, I'll wait it out a while longer but if there's no change in the next year or so I'll be pulling up stakes and finding a job and a home in a more affordable area of the continent. Maybe even another continent.I wonder how many people in the Seattle area feel the same way. I wouldn't say I'm quite to that point yet, but if the affordability level of Seattle continues to get worse, I can easily see getting there. Why pay luxury prices for slightly above-average goods?
Seattle's quality of life isn't so great that I'd pay outrageously to live here. There are those that will, however, and I have no intention of competing with them to see who the bigger fool is.
P.S. (For those of you keeping score at home, five out of the fourteen paragraphs in the linked article end with the same phrase: "according to Cain." That's a 35.7% "according to Cain" usage rate, according to Cain.)
(SCBJ Staff, Snohomish County Business Journal, 08.01.2006)