Seattle Apartment Real Estate Market Shows 5% Growth


The year 2011 won’t be remembered as anyone’s favorite annum for finances, but it is about to end on a positive note for those in the Puget Sound apartment market.

 According to the December edition of the Apartment Advisor for Puget Sound, the average price buyers were willing to pay for complexes of 5 or more units climbed nearly 7 percent over last year’s average. That translates to an average price of $117,259 per unit, in what is termed the Seattle MSA or Tri-county market (King, Pierce and Snohomish counties.)

 While the uptick is a bright spot in a year that has experienced much challenge, it’s still below what buyers were willing to pay in 2008, a peak time when the average price per unit for the Tri-county market totaled $125,749.

 Nonetheless, the increase should give investors affirmation that Puget Sound’s economy and apartment market is recovering ahead of many other US market areas.

Seattle’s more robust recovery can be attributed to its status as a gateway city and quality of lifestyle. The numerous transportation links, especially air: with Seattle being just nine hours from either London or Tokyo have make it an ideal location for business. We are home to eight Fortune 500 companies, multiple technology and biomedical firms which attract a highly educated workforce. Geographical restrictions, lakes, mountains, the sound and the growth management act all limit our developable land, but enhance our quality of life here in the Pacific Northwest. Add a little congestion to our freeways, great urban amenities, neighborhood redevelopment and you have a formula for sustained in city rental growth.

It helps also to remember that while prices aren’t yet at their peak level, there has been consistent growth in the market over the long term. According to the Apartment Advisor, prices have in fact climbed 5 percent compounded annually over the past 10 years. Broken out, King County has seen a 4.3 percent compound annual increase since 2001, while prices in Pierce County upticked at 3.8 percent per year.

And, on an even more hopeful and surprising note, Snohomish County’s market grew just over 5 percent, compounded annually.

Five percent growth sounds pretty good when bank CD rates are just above 2 percent, but when you consider that returns on real estate investments also comprise of tax savings and sheltering, operating cash flows and equity growth through debt reduction, the total returns stack up much higher.     

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