I’m Sean Reynolds from Summit Properties Northwest and Reynolds & Kline Appraisal. This is a quick video on a topic we haven’t talked a lot about and that is rent. And rent in the Seattle market, kind of in the general Puget Sound area, King, and Snohomish County recently had a little bit of a price drop and that has been kind of against the grain of everything we’ve seen over the last five, six, seven years. Rents have just been going up, up, up, up, and right now you’re seeing in last December 2017, we saw a little bit of a drop. And so in King and Snohomish counties, they dropped about 3 percent in average. Um, so in, in those areas it was about a $50 a month drop. And in Seattle, Seattle proper, Seattle address that amounts to about $100 drop. And so not huge, but also not going the other way either.
Rents aren’t going up and down just a little bit. And so the outlook for renters has gone from being like extremely depressing where you’ve seen just constant march up in your pricing to a little bit of a reprieve, not a lot, but just a little bit. Over the past five years, renters in the Puget Sound area have seen their rent go up by about 50 percent and what this comes out to is about $550 per month their rent has gone up. So what’s driving the forces behind having a little bit of a price reduction in rents? Well in the last seven years we’ve built more apartment homes in Seattle that we have in the last 50, so more in the last seven in the last 50 combined. That’s a huge number of apartment housing that have recently been built and what you’re seeing is the effects of a little bit of an over supply and some of that has to do with the local freeze by Amazon on employment and kind of the trickle down effect that has in general with jobs.
So you’ve got slightly fewer jobs coming in and you’ve got a ton of inventory of apartment rentals and rental housing coming online. And so there’s a little bit of an imbalance. And an example of this oversupply is the South Lake Union neighborhood. That has got a seven percent vacancy right now. That is the second highest of any apartment rental market in the Puget Sound area and that’s because we’ve had fewer jobs come in and massive oversupply of apartment building. I think another thing that you are seeing happen is that landlords jacked up their rents too hard, too fast, and now you’re kind of seeing the free market economies bring things down. There’s more space available than there is tenants at the moment and so pricing has got to come down and that’s what’s happened. So what can we look forward to moving forward? Are rents gonna just dive, no, I don’t think so.
I think you’ll have the number of jobs kind of equal out to the level of housing that’s out there. There’s always kind of this imbalance between housing and employment and people moving into the area. And it’s hard for everybody to get it just right. So right now you’ve just got kind of an economic situation that’s favoring renters. So renters take advantage of that. Uh, because I don’t think you’re going to see that long term. I think you’ll see rents kind of march back up as they have in every city that has a big tech sector as their employment center. Again, I’m Sean Reynolds, the owner of Summit Properties Northwest and Reynolds & Kline Appraisal. I would like to get your feedback on whether you think that rents in the Seattle market are going to drop or if they’re going to keep going up. I’d love to have you comment like, share and subscribe down below. Again, thanks for watching the video. Bye.