Last month, we reported on analysis from Zillow that showed that rent was starting to slow down, with a slight decrease in median rent in the metropolitan area year-over-year. The catch: That decrease was mostly concentrated in high-end, already-expensive rentals.
A quarterly report from Realpage released in late September tells a similar story: high vacancy and slowing prices at the top end, with high demand and high prices at the lower end. While Realpage’s report didn’t show a decrease, the annual change from the third quarter of 2017 to the third quarter of 2018 was just 1.7 percent, but again, largely influenced by what’s happening with newer, higher-end apartments.
“Rents for luxury product slipped a little bit over past year,” said Jay Board, content manager at Realpage, over email. “That’s primarily driven by intense apartment construction in the urban core.”
Longtime Seattle renters have likely noticed a whole lot of construction—and a whole lot of apartments aimed at a wealthier clientele. They wouldn’t be imagining it.
“Seattle has been one of the most active markets nationally for apartment construction in recent years, and most of that new product has been luxury, urban units,” said Board.” In turn, you’re seeing occupancy in that luxury segment slip, which is keeping rents from rising to same the degree as older product, which remains very full.”
This tracks with what we’ve been seeing all year long. Back in January, reports showed a dramatic slowdown in rent increases—as around a quarter of downtown apartments, largely new, luxury construction, sat empty. At the time, landlords were trying to fill those units by offering giveaways and temporary deals.
Zillow’s analysis last month showed an even more dramatic slowdown year-over-year within the Seattle city limits; Realpage could not provide us with specific data for the city limits alone.