Seattle Apartment Market Softens In 2018 After Long Run Of Growth

Multifamily property sales in urban King County, which includes the Seattle area, softened slightly in 2018 despite setting a record for price per square foot, according to Colliers International’s 2019 Apartment Market Study done by Colliers Multifamily team members Dylan Simon and Jerrid Anderson. The transaction volume remained below the peak of the market cycle due to fewer listings and fewer closings as both buyers and sellers grappled for the upper hand.

“After a long run of consistent growth and good news in Seattle’s apartment market, 2018 marked a year of uncertainty for investors,” Simon said in a statement. “To match the dynamism of the market, we are releasing multiple market studies this year, beginning with an analysis of nearly every 2018 apartment sale in Puget Sound — as well as trends for the last 15 years.”

Regionally, the market experienced a decline of 20% in transaction volume from the peak sales year of 2016. However, price per unit and price per square foot were both up.  

The market remained stable in north King County, but that area lacked demand so the rental rates and apartment values did not increase. Properties in east and south King County remained desirable to investors due to growing employment centers, transit expansions and rent-rate growth.

Pierce County’s price per square foot grew 270% in 2018. Job growth and income growth are driving rental-rate increases.

"While the region may be slowing down from the peak of sales activity in 2016, not all locations and building classifications should be treated equally as owners and investors plan for 2019 and beyond,” Simon said.