Apartment buildings in downtown Seattle by the waterfront.
A For rent sign
Sunset over Seattle’s downtown.
Rents in Seattle are climbing back to where they would be if the pandemic-related slowdown had never happened.
A new market report from Seattle-based Zillow found that typical rent in Seattle rose to $2,125 in July, marking a 6.2% increase year over year. The company estimated that typical rent would have been $2,194 if pre-pandemic trends had continued.
Rising rental prices are being felt across the country as the economy continues to slowly recover from the impacts of the pandemic. Nationwide, Zillow found that rents rose to $1,843 in July, up a total of 9.2% — or $156 — from the same time last year.
Despite the current increase in COVID-19 cases being experienced in Washington and nationwide, experts noted that the current increases are erasing any small affordability gains renters made amid the pandemic. During the height of the winter surge last year, rents in Seattle saw dramatic declines and dropped by 20% year over year, but began to stabilize earlier in the spring.
“With the economy continuing to reopen, employees receiving more long-term guidance on remote work, and as students find their way back to college campuses, the rental market is picking back up,” said Nicole Bachaud, Zillow economic data analyst, in a news release. “As high demand puts pressure on rents and incomes are unable to keep up, affordability will become more of a challenge in the coming months.”
Rents for single-family homes are at a 16-year high according to another study, with prices increasing by 7.7% in the Seattle area in June compared to the same time last year. The average renter living in a single-family home in the Seattle metro area now pays $2,833 per month.
But some experts are predicting that the housing market may begin to cool down heading into the fall months, providing some relief for those looking to buy a home. The Northwest Multiple Listing Service (NWMLS) found that competition for homes in Seattle eased slightly in July, with brokers adding more listings and less homes going under contract.
Zillow also found that home inventory in Seattle was up 4.6% in July from the previous month, but still down 6.7% compared to July 2020.
“All signs point to the likelihood that the housing market is beginning to ease off the gas pedal,” said Bachaud.
While inventory appears to be increasing slightly, home values are continuing to soar. The average home value for the Emerald City was priced at $670,473 last month according to Zillow, up 2.6% from June and a staggering 22.7% compared to the same time last year.
Another study estimated that prices would soar by 18% in Seattle over the next year driven by historically low inventory. And it’s not homes in the city that are seeing increases in prices: suburban counties along the Interstate 5 corridor have also seen sharp jumps in price.
“Prices in Lewis County are up 54.2% from the July 2019 level, Snohomish County is up 40.6%, and Island County is up 44.3%,” said James Young, director of the Washington Center for Real Estate Research at the University of Washington. “The search for value in the suburbs with sharp price increases suggest households are making their housing preferences known. They want to own rather than rent.”