Seattle Multifamily Report – Winter 2021
Mirroring most expensive coastal markets, rates in the metro continued to drop, clocking in at -6.2 percent year-over-year.
Following several years of consistent performance, Seattle’s multifamily market ended 2020 in a difficult position. Rents declined by 1.1 percent on a three-month basis through December, to an average of $1,797, with the drop expanding the gap between the local and national average to 100 basis points. On a year-over-year basis, rents in the Emerald City contracted by 6.2 percent in 2020, the fourth-largest dip among major U.S. metros.
Employment posted an 8.1 percent decline last year, underperforming against the -7.3 percent U.S. rate. Although the leisure and hospitality sector lost a third of its workforce, construction, financial activities and professional and business services added a total of 5,800 jobs. As the main driver behind Seattle’s growth over the past decade, technology remained healthy last year, contributing to the metro’ overall economy. Despite embracing a remote-work model, Microsoft Amazon and Facebook all expanded their local footprints.
Multifamily development was stymied by the pandemic, with only 7,806 apartments coming online in 2020, after four consecutive years of deliveries averaging 11,344 units per year. Following 2019’s cycle peak of $5.9 billion, transaction volume slowed and only $1.6 billion in multifamily assets changed hands. Yardi Matrix expects rents to increase by 0.9 percent in 2021 as restrictions slowly start to lift and COVID-19 vaccines become widely available.