The Puget Sound Business Journal recently wrote an article on Nat Bosa’s choice to build a 41-story condo building in the Denny Triangle. I think the Seattle real estate market is able to handle a new condo high rise project, especially with it being two blocks from Amazon. We have hundreds of professionals a week relocating here for work. A lot of these professionals are moving here to work for Amazon and Microsoft. This influx in hiring is creating a demand for homes and rentals which in turn is causing rental rates to rise and home prices to rise. This project will create more supply of homes in a very desired area, which we need with so many transplants. I feel this is a great opportunity for the developer and also for the Seattle market.
It has always been my assumption that as the home sales market weakens for various reasons–interest rates, inflation or an economic recession–the rental market quickly strengthens. It just seemed like common sense; people may not be buying, but they will always need somewhere to live! But it was all just an assumption on my part, until the hard data that came out this week confirmed the theory.
Home prices have been continuing to fall, but new data shows the rental market is finally strengthening. Analysts are saying this could be an early indicator that housing on the whole may be headed into recovery.
Fueled mainly by the foreclosure crisis, we have seen the number of renters increase, many with less than perfect credit records; this slows their becoming homeowners again. Additionally, the current difficulties in getting a mortgage are adding to the number of renters.
Even with this added demand, inventory has stayed relatively constant, as many investors are buying up foreclosures and converting them to rentals. According to Zillow, median rents rose 3% from January 2011 to January 2012 nationally, while home prices declined 4.6% during the year.
So while it may take a bit more time for the housing market to recover, we know we can count on the rental market in the meantime–it’s become the dependable housing model for the 21st century.
If you are looking at a home or condo that is individually owned, most often the term required is a 12 month lease. Apartment complexes can vary a little more, since these look to avoid a glut of openings in any particular month. They may offer a small break on rent due to this, or a varying grid of choices over a certain time span, and signing a 9 month or 14 month lease, for example, may have a slight benefit.
When considering how long a lease is right for you and whether you should consider signing a lease longer than 12 months, there are two factors to be mindful of: 1) Will rent prices rise in the future, and 2) Can you get a break on rent by signing a longer term lease?
First, we continue to see vacancy rates trend lower, increasing rent prices. As housing programs continue to fail, many are forced to rent their homes instead of sell them. Also, homeownership is near all-time lows, which means more and more people are renting and will continue to do so. These factors will continue to push rent prices higher in the future. If you sign a 12 month lease, there is a solid chance in a year that market prices will be higher, and you may be required to pay more rent just to stay in the same place. Signing a longer term lease can help avoid having your rent increase in a year.
Second, it’s important to consider whether it is possible to get a break on the rent price by signing a longer term lease. That can vary from place to place, but generally speaking, it is in to the benefit of the owner, whether individual or corporate, for you to sign a longer term lease. Even if rent prices rise, turning over a rental is costly for the owner. There are commissions to a realtor or property manager, there are cleaning services and there may be small damages or simple wear and tear to repair. Signing a longer term lease is a benefit to the owner, and most often you can negotiate a lower rent price by offering longer than 12 months.
Not everyone can sign a longer lease. Many may stay longer than a year, but the uncertainty of life may not be worth the risk of being locked into lease, no matter how likely it is that you will stay. However, if you can sign an 18 month, 24 month, or even longer lease, you may be able reap the benefits of not having your rent hiked in a year, as well as negotiate up front a lower rent price. The cumulative benefit could very well save you thousands in rent!
It may be cold and gray out there right now, but the rental and relocation market has been anything but chilly. As a result, our relocation team has been staying busy this year–even during these winter months.
In the past, we’ve often seen a dip in new hires during the winter. But this year, hiring at companies like Microsoft, Amazon and Google has kept going strong, which means there’s a continued market for the rental housing units we represent at Seattle Rental Group.
Our agents are out every week, scouring Seattle for the perfect home for new residents. Recently, we’ve had a lot of young professionals interested in 1-2 bedroom apartments or condos in the Seattle area. With all these new hires, rental units are often only sitting on the market for a week or two, meaning it’s a great time to be a landlord!
After reading this article, it looks like Ballard might be the new place to live!
Currently Avalon is constructing a new large building in downtown Ballard and now Equity is breaking ground. We are seeing construction all over this city but I believe Ballard is the place to keep an eye on.
Additionally, condo sales are doing pretty well in Ballard these days. There are some new buildings, as well as great deals on buildings that are a couple years old. There are already a bunch of new restaurants and lounges flocking to Ballard, and with all this new construction I believe we will see a lot more growth in the months to come.
Plans for a 40-story residential tower at 2116 4th Ave in Belltown are moving forward as the window for appeals on the current plans close tomorrow. The plans were approved by the Seattle Department of Planning and Development earlier this month.
The mixed-use tower will have nearly 3,000 sq. ft. of retail space the ground level and parking for 329 vehicles. The building will incorporate art into public spaces on the ground level and when it was first announced, plans included a large, outdoor movie theater.
It will also have 365 residential units and it is unclear yet whether the building will be completed as an apartment or a condominium building. Do you think that it can be completed quickly enough to meet the growing need for rental units before the market becomes over-saturated? Tell us your thoughts on Facebook, Twitter or in the comments below.
Currently there are only a handful of condo projects in any stage of development. One of the few projects out there however is the Joseph Arnold Lofts, which was assessed by the Downtown Design Review Board on Tuesday night.
The project, which is located at the corner of Elliott Ave and Cedar St, will feature a community roof top deck with barbeques and sweeping views of the water and city and also a small dog park for the convenience of owners. It will also have two levels of garage parking and retail space on the ground level. On several floors there will be private terraces for residents.
The building will have a modern design with exposed concrete and metal throughout and wood accents. You can view the projected design here.
On average, these properties move 19-25 days faster than regular listings. The difference between the average length of time on the market for Bank Owned and Short Sale listings versus regular listings is skewed by the fact that higher-end listings, which are not usually Bank Owned or Short Sale listings, typically take longer to sell, thereby driving up the average length of time of regular listings on the market.
Bank Owned and Short Sale properties are popular right now for investors and home buyers with cash in hand because there are more opportunities to capitalize on special deals. For home buyers who are looking to put the standard 5% down on a purchase, Bank Owned and Short Sale listings are no different in value than regular listings.
Zygna, the creator of popular social games such as FarmVille and Mafia Wars, will be moving into a new engineering center in Downtown Seattle. The company, which has experienced explosive growth in the last year, will be moving into their new Pioneer Square home sometime in the next two months.
The location was chosen to accommodate the growth Zygna is expecting as they continue looking for top engineers and developers to join their team.
The story was first covered by GeekWire here and contains more information.
Seattle’s rental market is a dynamic entity that is constantly evolving. Here are a few updates on local changes:
-Plans have been filed by a company from Vancouver, B.C. to build a six-story mix-use building in lower Queen Anne. The building will feature units above commercial space. More here.
-MSN featured an article about the transformation of Seattle’s Columbia City neighborhood. The article highlighted the revitalization of the area by the influx of artists and other people drawn by the classic homes at cheap rates. Now note-worthy restaurants and charming boutiques are common place and Columbia City has transitioned from down-&-out to up-&-coming.
-Local blog CHS recently wrote an article about how being close to public transportation can protect home values against the drop off in real estate prices. That’s good news for properties on Capitol Hill close to the construction site of the new light rail station.