Seattle Multifamily Report – Summer 2020
- Oct 23, 2020
Seattle’s multifamily market finds itself in a precarious position. Rents have held steady at $1,908, falling only 0.1 percent on a trailing three-month basis through August. However, investment volume took a dive to $670 million in the first eight months of the year—its lowest level in nearly a decade and close to $2 billion less than the total during the same period in 2019. Although the pandemic has left a large mark on the metro, other factors—most notably a hefty property sales tax increase in January—have compounded the market’s challenges.
The Emerald City’s economy has struggled due to the pandemic, with gross business revenues down by $13.4 billion in the first half of 2020. With all employment sectors registering heavy job losses, unemployment soared to 16.1 percent in April before falling below the national rate to 8.5 percent in July. Seattle’s tech giants are thriving, as both Amazon and Microsoft have reported record profits through the pandemic. However, other sectors face significant challenges ahead, as hospitality and aerospace jobs will likely be impacted even more.
Development slowed across the metro, with fewer than 4,200 units completed through August. Though 22,356 units were underway, we expect some 2,800 units to deliver before year-end. As occupancy softens, rents will likely fall by 2.4 percent by the end of the year.