Curbd Seattle has the roundup of rental listing prices for November. Overall, it looks like rent is up a bit year-over-year and flat or slightly down as compared to September, which is in line with a lot of what we’ve seen over the course of the last year. Despite the slower, flatter rate of rents this year, the effects of rent increases are still being felt across the city, including a uptick in homelessness. If rents remain relatively flat this may wind up easing some of the pressure on the purchase market’s inventory by allowing potential buyers to continue renting rather than enter the market. It’s not the best way to correct the market, and it isn’t enough by itself, but it’s something that could have enough of an impact to be worth watching.
And the market is in need of some correcting. The sellers have all the advantages in this current market, with a continuing trend of quick sales and rising prices. I’m going to take the 11% year over year increase in inventory and cling to that as some good news. Realistically, most sellers are buyers, too, so a balanced market will make everybody happy.
The NWMLS numbers are out, and the exciting news from last week was real. Inventory in June really truly did go up. Now, let’s all cross our fingers for a a repeat performance in July.
Data from the large rental listing sites on July rent changes in the area is out, and Curbed has handily compiled it here. Most of the numbers are comparing median one-bedroom rent listing prices to the same for July of 2016, and saw increases from 4-6%, but one of the sites actually reported a decrease of 17%. Because nothing is every quite as straightforward as you might hope.
Speaking of straightforward, the city of Seattle has passed an income tax on high-earners, to be implement in income earned beginning January of 2018, collected in April of 2019. The tax is intended to, in part, lower the burden of property taxes, which is good news for a lot of people. Rules around the tax are still in development and should be released in November.
If you’re a data nerd at all, you should probably be reading the Seattle Bubble on your own regularly, because their analysis is great. For example, they dug into the January data from the Case-Shiller index and look at more than just price growth in Seattle, but give good context for how it compares to other rapidly growing metropolitan areas including, important to the Seattle market, San Francisco. With as much interest as we get from Bay Area investors, a softening in the market there is likely to have an impact on the Seattle market (though probably not a huge one unless it was part of something bigger) so it’s something worth keeping an eye on.
There’s more evidence that trends in rent prices from the last several years might be shifting. A slow down in increases isn’t remotely the same as rents going down, but it’s still good news as far as I’m concerned. With upzoning approvals around the city already rolling in, and plenty more in the pipeline, hopefully the next few years will bring a slow down in rent hikes across the city. We’re at a place where rents are high enough to keep the market happy to build new inventory for quite a while; stabilizing things will let buyers be more thoughtful about their choices in jumping ship to buy, hopefully easing some of the inventory trouble we’re having and shoring up against the kind of frenzy that would tilt us toward a burst-ready bubble. (I started in the industry right after the last bubble burst. It was fun to be a buyer’s agent then, but I’m not eager to go back to it.) In summary: Yay, less exorbitant rent hikes!
Speaking of pipelines: Bertha made it! Yo go, you tardy, over budget girl. I must confess, I was one of those, “That’s never actually getting done,” doubters. It got done. Finally. Being a doubter doesn’t make me less proud of that giant drill that eventually could.
As promised, we’ve got stats. For the most part, they just confirm that we’re seeing more of the same. Inventory is down and prices are up. Mix in the first increase in interest rates in a decade that looks like it might be more than an temporary blip, and the situation is getting rough for buyers. My hope is that if interest rates do stay up, it’ll be balanced by a slow down in price increases.
What I’m finding interesting are the details behind the headline on the trends for rent prices. One bedroom rents are up, but studios and two bedrooms are showing signs of softening. Anything that helps buyers save for a down payment or gives them a good alternative in the face of low inventory is good news to me. I’ll be keeping an eye on it that.
If you’re looking for a breakthrough, you could hang out with Bertha. After a break for a quick course correction the drilling is moving into its final stretch. The tunnel is starting to look like it might actually be finished some day.