Is your rent falling? Probably not if you’re in a committed contract. In general though, there are signs that Seattle’s rapidly rising rents may finally be peaking, and maybe even falling, believe it or not.
Take a look at Zillow’s Rent Index for the last five years: October 2011, $1,747; October 2016, $2,555. Either see it as a 46 percent increase or an extra ~$800 per month and see why the city’s become less affordable to many. Since June 2015 it’s up less than 1%, a much more reasonable rate.
But, is that a sign a slowing, or merely a plateau before yet another increase? The Seattle Times and Apartment Insights Washington make a case for decreases. The more expensive neighborhoods like Downtown Seattle, Queen Anne, the U District, Bellevue, and Kirkland have all seen rents drop by about three percent in the last quarter. Across King and Snohomish Counties, incentives like a month’s free rent are up from twelve percent to twenty percent of rentals.
A region is more than just a few neighborhoods. Some will continue to rise for a while, particularly those that are pulling in people displaced from pricey places. The average annual increase remains high at 7.9 percent for King and Snohomish County.
The driving function is vacancy rates. New construction started after the Great Recession is being completed, opening new supply. Supply and demand continue to rule.
Rent decreases may not just be a Seattle thing. New York City is also experiencing the completion of new construction, and they, too are seeing falling rents.
What’s happening in your neighborhood? Is this a mathematical abstraction, or is your rent check actually getting smaller?