Seattle Multifamily Report – July 2023
The Puget Sound is ready for better days after a slow first half.
The Seattle multifamily market has taken a hit due to the overall deteriorating economic landscape, increasing cost of capital and ongoing layoffs in the tech sector. The metro’s rent movement turned negative on a year-over-year basis as of May, at -0.9 percent. That was far below the 2.5 percent U.S. rate of rent growth. Demand was fairly robust in the metro, with occupancy remaining at 94.9 percent.
After returning to pre-pandemic values in November of last year, Seattle’s unemployment rate kept improving, reaching 3.0 percent in April, according to preliminary data from the Bureau of Labor Statistics. The job market expanded 3.8 percent year-over-year as of March, adding 64,300 new jobs. Leisure and hospitality, which was one of the hardest-hit sectors during the pandemic, gained the most new positions (16,100).
Developers only delivered 1,582 units in Seattle in 2023 through May, 0.6 percent of total rental inventory. After delivering a record 12,400 units in 2022 and nearly doubling the 2.4 percent U.S. rate of delivery, the percentage of stock in Seattle was in line with the U.S. through the first five months of 2023. The number of construction starts also declined from last year, with only 3,385 units breaking ground this year. Per-unit prices are still among the highest in the nation and well above the national average, although they dropped 21.2 percent from 2022 averages, to $307,247 this year.