When graduate student Bri Butz was looking for a new apartment in North Seattle this year, she was surprised at just what her money would buy. Or wouldn’t buy.
“It was like over $1,000 to have 200 square feet,” said Butz, who was searching urgently for a place when she needed to move out of a group housing arrangement. “There were very few choices and they had a high price tag.”
As the pandemic upended life last spring, pricey cities like Seattle made headlines for an unusual trend: Rents were dropping. Tenants went in search of lower rents or more space and demand spiked in outlying areas. Landlords in upscale neighborhoods like South Lake Union offered special deals like a free month of rent to try to attract new tenants.
Now, rents are beginning to tick back up. For the second month in a row, median Seattle rents for new leases increased from February to March, inching up 2.2%, according to the rent-tracking firm Apartment List.
And while Seattle rents are down by double-digit percentages from this same time last year, a split continues between the most and least affordable apartments. In neighborhoods like Central Seattle, including Capitol Hill, rents dropped for luxury apartments but stayed flat for the most affordable units.
“There were plenty of expensive options and for me I just can’t do that,” said Butz, who is relying mostly on loans while studying naturopathic medicine.
As she searched, Butz said, she fell victim to a Craigslist scam, in which a supposed landlord interviewed her for a basement apartment but said she couldn’t tour it in person because the tenants were vulnerable to COVID-19. After Butz paid nearly $2,000, the person interviewing her said they had to leave town. It turned out the apartment was never really for rent, Butz said.
Eventually, she found a studio for $1,095 a month.
Citywide, median rent for a one-bedroom apartment in March was $1,397, according to Apartment List. Across the metro area, including Bellevue and Tacoma, the median one-bedroom cost $1,337.
Seattle ranks third among major cities for the year-over-year drop in rents and No. 6 for month-over-month growth, said Apartment List economist Chris Salviati.
A similar rebound is playing out in other cities like San Francisco, indicating that “the days of plummeting rents in pricey coastal markets appear to be over,” according to Apartment List.
The biggest rent drops across Seattle have been in the most expensive apartments, according to data from CoStar, another rent-tracking firm. For more affordable units, rents on new leases have stayed flat, dropped less dramatically or in some cases even increased, depending on the neighborhood.
In West Seattle and North Seattle, rents for the lowest-cost apartments increased between 1 and 2% while falling about 9% for the highest-end units, according to another rent-tracking firm, CoStar. In South Seattle, the most affordable apartments were almost flat, rising .2%, while rents for the most expensive apartments fell by 7%.
In Central Seattle, including Capitol Hill, rents for the most affordable units were flat at the start of this year compared to a year earlier while rents for mid-tier apartments fell about 3% and the cost of the most expensive apartments dropped 10%.
Outside Seattle, rents are up even among more expensive units in cities like Auburn and Everett. That’s a sign of “stronger demand in outlying suburbs during the pandemic,” said CoStar analyst Jared Kadry.
“To the extent that remote work is a factor leading to falling demand in markets like Seattle, that’s something that’s being disproportionately driven by folks at the high-end of the income distribution,” Salviati said. “Meanwhile, the economic disruption of the pandemic has disproportionately impacted folks in low-wage service occupations, and so I suspect that demand for affordable housing hasn’t taken the same hit.”
Among Class A apartments in the Seattle area, which includes most new construction, nearly a third of properties offered concessions like a month of free rent during the early months of the pandemic, more than double the rate a year earlier, according to a July report from HUD. Nearly half of Zillow rental listings in the Seattle area were offering promotions last month.
Rent-tracking firms like CoStar and Apartment List can overrepresent large apartment buildings and higher-end units.
As remote work and social isolation drag on, demand is high for single-family house rentals, keeping prices up, said Cory Brewer, vice president of residential operations at Windermere Property Management / Lori Gill & Associates. The property management company manages about 1,650 rentals, most of them single-family houses throughout King County.
“If a house is in good condition and if it’s priced appropriately, we have a line of people around the corner who want it. The demand for a single-family house in Issaquah — that’s what people want right now,” Brewer said.
For the condo rentals the company manages, interest is starting to return for two-bedroom spaces but is still low for smaller units, Brewer said. “If it’s a small unit in downtown, Belltown, Capitol Hill, it’s been very difficult to find someone who wants to lease that.”
As Washington state continues its eviction moratorium, an estimated 112,900 households, or about 14% of renters across the Seattle-Tacoma-Bellevue area, are not caught up on rent, according to early March survey data from the U.S. Census Bureau. The moratorium is set to expire June 30.
The pandemic-era rent decline contrasts sharply with prior years. Across the Seattle area, median monthly rent increased 64% from 2010 to 2019, according to HUD.
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