Rents in Washington show signs of stabilizing

Apartment construction in the Alderwood Mall area.

As apartments built over the past few years open to tenants rent prices across Washington are leveling off, a new analysis of the state’s rental market found.

The average apartment rent statewide between July and September was $1,763 – a 0.6% increase over a year earlier, according to the Washington Center for Real Estate Research’s quarterly apartment market report. Compared to the second quarter of this year, rents in the third quarter decreased 0.6%. That marks the first drop since the last quarter of 2022.

Still, the number of people behind on rent remains high, worrying advocates who say more is needed to help keep tenants in their homes.

University of Washington professor Steven Bourassa, director of the Washington Center for Real Estate Research, said it’s hard to say exactly why rent growth is easing, but it’s likely because of new apartments that became available over the past three to four years.

But while apartments are opening up, especially in the Puget Sound region, Bourassa said demand is not necessarily increasing. The percentage of empty units statewide is hovering near 5%. This follows two years of rising vacancy rates, after the state hit a low of 3.6% apartment vacancy in the fall of 2021.

“The market is saturated at the moment,” Bourassa said.

Rents in the Puget Sound region rose by just 0.4% compared to last year, according to the report, though they still remain some of the highest in the state. In King County, where Seattle is located, average rent for all apartment types was $1,997 while in Snohomish County it was $1,864.

Yakima and Whitman counties had the lowest rent prices, at $934 and $1,052, respectively.

Though the statewide average is flattening, some regions have seen significant rent spikes. Grant County saw the highest year-to-year, with the third quarter average rent for all apartments increasing by 6.2%. The average rent there is $1,172.

Bourassa said recent trends in vacancy rates and rent prices both reflect a lack of demand. As vacancy rates go up, rents go down.

At the beginning of the pandemic, he said vacancy rates dropped as demand for apartments increased. Since then, developers built more apartments.

‘Alarming’ tenant data

Despite rents stabilizing, housing advocates say many tenants in Washington are behind on rent.

In fact, over the summer, the number wasn’t far off from historic highs seen during the pandemic, Michele Thomas, director of policy and advocacy at the Washington Low Income Housing Alliance, told the Senate Housing Committee this week.

“The data is alarming,” she said.

The number of Washington renters self-reporting that they’re behind on rent was between 6% and 10% between June and early October, according to the U.S. Census Bureau’s Household Plus Survey. During the peak COVID years, the statistic was between 5% and 13%.

Households earning less than $75,000 annually and households of color are more likely to be struggling.

Pandemic rental assistance has dried up, leaving “very few resources available” to help tenants, Thomas said.

In contrast to the UW report, she said many tenants are reporting increases of over $100 a month and that these increases are happening in all corners of the state.

Thomas called on lawmakers to look at policies to limit landlords’ ability to sharply jack up  rent and to invest more in permanent affordable housing.

Bills to limit large rent hikes failed to pass during this year’s legislative session, but some lawmakers have indicated they plan to bring up those proposals again in 2024.

“It’s going to be another session on housing next year,” Senate Housing Chair Patty Kuderer, D-Bellevue, said Tuesday. “We’ll see what comes out.”

by Laurel Demkovich, Washington State Standard

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