Moderating Rents, Solid Demand
Seattle’s multifamily fundamentals began moderating in response to the deteriorating economic landscape. Rent growth turned negative in September, and by December, it had posted a 0.6% decline on a trailing three-month basis, outperformed by the 0.2% U.S. rate contraction. Robust stock expansion has played a role, but demand is fairly robust, as the average occupancy rate in stabilized properties declined just 50 basis points year-over-year as of November, to 95.4%.
Seattle’s unemployment rate reached pre-pandemic values, at 3.4% in November, outperforming both the state (4.0%) and the U.S. (3.6%), according to preliminary data from the Bureau of Labor Statistics. The job market expanded 5.5%, having added 82,600 jobs in the 12 months ending in October, above the 4.1% U.S. rate. Although leisure and hospitality led gains, up by 14,100 positions, professional and business services and information were not far behind, with 12,800 and 11,800 jobs, respectively.
Developers delivered a record 12,400 units in 2022 and had another 26,400 units underway. Still, the number of construction starts declined from the prior year. Meanwhile, investors traded $4.4 billion in multifamily assets, which was fairly evenly distributed throughout the year. In addition, the average perunit price rose 6.1% year-over-year, to $392,968, well above the $215,719 U.S. figure.
Read the full Matrix Multifamily Seattle Report-February 2023