Conversions and Rental Market Report
Dupre + Scott Apartment Advisor has reported on the rental market for King County and Seattle for March 2008. Here are some interesting highlights from their report.
- In March, 4.1 percent of King County apartments and 3.1 percent of those in Seattle were vacant, only up a smidgen from March 2007 when vacancies were at 3.9 percent in the county and 2.8 percent in Seattle and still less than half of the 2003 vacancy rates.
- One big reason vacancies have started increasing is that the housing slump has dramatically slowed down new conversions of apartments into condominiums.
- 2006 conversion bonanza: conversions hitting the market went from 900 in 2003 to 1,800 in 2004; 3,600 in 2005 and more than 6,000 in 2006 -- fueled the drop in the vacancy rate during those years. But conversions fell to 2,800 last year (subtracting 1,200 units that started to convert, then reverted to rentals) and just 168 units have converted or are scheduled to convert so far this year.
- Conversions in the past three years outpaced new development by a total of 5,400 units.
- Apartment rents averaged $1,026 in King County and $1,071 in Seattle in March 2008, up about 8.5 percent in both cases from March 2007.
Overall, this is good news for condo owners who are already renting out their units or considering renting them out in the near future. For renters, it appears that while rents won't be going down anytime soon, they are not likely to be continuing to increase as much as they did last year.
