Market Breakdown - Seattle is a great city with some attractive macroeconomic factors for rental property owners. Here's an overview!
As most of you know, Seattle is an amazing city. Easily one of the most beautiful cities in the country, Seattle is surrounded by mountains, the Puget Sound, lakes, rivers, and of course wonderful people. Seattle has changed considerably over the last decade or two - a large influx of people, it's become an international technology hub, the list goes on. And did we mention the COVID-19 pandemic? All this change has made a significant impact on real estate and operating rental properties. That said, let’s dive into why Seattle is an attractive place to be a landlord.
In this article we’re going to look at the macroeconomic factors driving the rental market in Seattle. Keep in mind each neighborhood (and even each street) will vary and have it’s own microeconomy.
A 1-bedroom apartment in Seattle is now renting for $1,595 per month - this compares to a median of $1,339 across Washington state. The 2-bedroom apartment median currently sits at $2,095 per month. These rents reflect an 11% decrease YOY. Why the decrease? The main culprit is the coronavirus pandemic which brought with it:
Restrictions on rent increases
Decreased demand for apartment living
Employers not requiring employees to be in the office
The average home value in Seattle is about $831,000, according to Zillow, which is an increase of 10.7% YOY. While that is a very strong increase, $831,000 is a pretty steep entry point. Here’s a glance at some other markets across the Puget Sound region:
Tacoma average home value: ~$430,000
Bellevue average home value: ~$1,144,000
Kirkland average home value: ~$932,000
Lynnwood average home value: ~$631,000
Based on the above data, you may be thinking, “Why would I want to own a rental in Seattle?”. Well, there are some important factors that make Seattle unique and good place for landlords:
Amazon employs about 75,000 folks in Seattle alone (with average salaries well north of $100,000)
Microsoft employs about 57,000 folks in the area and Seattle is home to many additional tech companies and corporations paying high salaries
There are several colleges in Seattle (University of Washington, University of Seattle, Seattle Pacific, and more) with student populations who rent
The population of Seattle has increased by roughly 24% over the last 10 years and in 2020 it was the fastest growing city in the US (according to the US Census Bureau)
In general, people are moving to the state of Washington (almost a 15% population increase over the last 10 years according to the US Census Bureau)
Household income has also climbed recently in Seattle. The American Community Survey conducted by the US Census Bureau in 2020 reported a median household income in Seattle of $102,500 - an increase of about 9% over the previous year. This is very strong growth and an indication that many renters in Seattle can afford higher rents.
A question mark for Seattle moving forward will be whether employers start requiring workers to come back to the office once the COVID-19 pandemic is under control. There has been a trend of folks moving out of cities to suburbs and more rural areas, but the incredibly strong economy of Seattle should provide an ample supply of renters for years to come.
On that note, it’s important as a landlord to remain up to speed with all things pandemic and moratoriums. A great resource for the latest is the Rental Housing Association of Washington - check out their COVID-19 page here.
Contact us if you’d like to discuss the services we provide landlords in the Seattle area - happy landlording!