Seattle Multifamily Sees Slowest First Quarter Since Great Recession
ONE OF THE WEAKEST BEGINNINGS TO THE YEAR SINCE 2009
LOW APARTMENT DEMAND
The Seattle metropolitan area experienced low apartment demand in the first quarter of 2023, mirroring a nationwide trend. The net absorption, which tracks the change in the number of occupied units over a specific time, was only a few dozen units. Despite being a slight improvement from the previous quarter, it marks one of the weakest beginnings to the year for Seattle's apartment market since 2009.
REASONS FOR SLOWDOWN IN APARTMENT ABSORPTION
ECONOMIC UNCERTAINTY | INFLATION | SLOWDOWN IN TECH JOBS
There could be various reasons for the overall slowdown in apartment absorption. One potential explanation is the increase in evictions. Data from the King County Bar Association indicates that evictions surged in 2022, particularly in the areas that witnessed the most significant negative absorption figures over the past year.
The low apartment demand in the Seattle metropolitan area may also be attributed to various other factors, such as the economic uncertainty caused by the rapid surge in inflation and a slowdown in the growth of tech jobs in the region.
Graph & Data Source: CoStar
HOUSING COMMITMENTS & FINANCIAL DECISIONS AFFECTED
A PERSISTING TREND
Last year, inflation rates across the country soared to a level not seen in 40 years, and this has affected household financial decisions, including those related to new housing commitments. As a result, people may choose to remain in shared living arrangements with family or friends for more extended periods, as they reassess their housing options in the face of rising prices.
Seattle's apartment demand has historically been bolstered by the presence of tech jobs, especially in the newer, highly amenitized communities. However, the overall growth of jobs in the region has recently decelerated, and as of the beginning of 2023, the year-over-year growth of tech jobs turned negative. This trend may persist as several companies in the area have announced plans to lay off workers, potentially adding to the negative impact on future apartment demand.
For more information on Seattle Real Estate or how to navigate the market please contact AGM Real Estate Group.
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