Rental
Markets
|
Director, Washington
Center for Real Estate Research
Washington State
University
One-third of Washington
households live in rental housing, yet the primary attention of industry
analysts and the media is on statistics of home sales and home purchase
prices. To be sure, these are important
measures of the economic health of the state and its communities, but it is
also important to monitor the housing choices available for those who either
cannot purchase a home, or choose to rent their abode.
For many years the apartment
market in the Central Puget Sound region has been monitored by Dupre + Scott
(formerly with Cain and Scott). Since
1996 WCRER has conducted similar studies of apartment vacancies and rents in an
ever-increasing number of communities around the state. For the September 2002 study data was
available for 219,294 apartment units in 18 Washington counties, representing
approximately 95 percent of Washington’s apartments (housing units in
structures containing at least 5 units).
WCRER conducts its study quarterly, while D+S collect their data every
six months. Of course, many renters
live in single family homes, duplexes, or smaller multifamily structures, but
the magnitude of the research effort required to evaluate vacancy and rent
conditions in that fragmented market is beyond the scope of our research. Based on national statistics, vacancy rates
are lower in those structures
For the state of Washington
6.6 percent of apartment units were vacant in September. The greatest vacancy was identified in
Snohomish County (8.5 percent) while the lowest vacancy was reported in Whitman
County (1.6 percent). The higher
vacancy rates in Snohomish and King counties can be attributed to the
combination of fewer employment opportunities attracting new residents coupled
with low interest rates attracting former renters to homeownership. While the unemployment contributor is a
greater issue in Washington than in most other parts of the county, the
conversion to homeownership in the current environment of affordable mortgage
rates has helped boost homeownership and increase apartment vacancies in most
parts of the county.
It is important to put
current data into perspective. After
many years of very low vacancy rates, we may have forgotten that 6-8 percent is
considered a normal vacancy in most parts of the county. Nationwide statistics for the time period
consistent with the local data reported here prepared by the Census Bureau
indicate that 10.4 percent of apartment units were vacant in September. This reflects an increase in the national vacancy
of nearly a full percentage point over the last year.
Vacancy rates only tell part
of the story. The survey also collects
data on rental costs for these apartments.
The average rent on all apartment units in the state was $759 in
September, down $3 from the same time last year. Eight of the 18 counties studied reported lower average rents
than a year ago, but most of the changes were very small. The range of averages from community to
community was very large, with the Yakima market reporting the lowest average
apartment rent of $446 and the King County market the highest at $866, nearly
double the prevailing rent in Yakima!
For more detail on local
apartment markets go to WCRER’s web site at
and click on <Market Data>.
Statistics on Washington’s
housing market and other useful information are available on WCRER’s Web site:
www.cbe.wsu.edu/~wcrer. For other information on real estate markets around the
State of Washington, or general information about the real estate industry in
the state (excluding legal questions), readers can reach the WCRER at
1-800-835-9683.
January, 2003