According to a new study by the National Multifamily Housing Council (NMHC) and National Apartment Association (NAA), the greater Seattle area will need over 98,000 new apartment units by 2030 to keep up with projected demand.
The report is based on research from Axiometrics, a market research company which has reported average annual construction of 5,884 units for the past five years. That number would need to increase by about 19 percent in order to meet demand.
Demand will be determined by changing demographic factors in Seattle including an aging population, a decline in home purchases, and rapid stream of newcomers to the area, the report said. Nationally, the authors found that Seattle is ranked 11th out of 50 metro areas in terms of projected apartment demand by 2030.
“We’re experiencing fundamental shifts in our housing dynamics, as more people are moving away from buying houses and choosing apartments instead. People moving to the area continue to outpace natural population growth as the source of new renters for the Seattle metro area,” says Jim Wiard, executive director of The Washington Multifamily Housing Association in a statement reported by DJC.
Many Seattle dwellers are “choosing” to rent instead of buy because the housing market is now the most competitive in the country. According to Redfin data, Seattle had the highest rate of bidding wars of any city Redfin tracks, which includes major markets like Denver, Boston, Austin, Washington DC, San Francisco, Oakland, Los Angeles and Portland. Over the last two months, about 90 percent of houses for sale in the city of Seattle spurred bidding wars, reports Redfin. That’s the most since records began at the start of this decade.
The houses that exist on the market are incredibly expensive. According to the Northwest Multiple Listing Service, Seattle’s new median price for a single-family house is $729,000. That’s up a full $7,000 from a month ago and up 13.7 percent from a year earlier.
As more Seattle residents give up on homeownership and turn to renting, the prices increase. The average rent for the Seattle market, from luxury to older budget properties, is now around $1,860, estimates Axiometrics.
In its last quarterly report, Axiometrics forecast 3.3 percent rent growth for the rest of the year.