Gone are generous incentives and stalled rents. Instead, rents are going up in many places. The average rent in the region stretching from Snohomish to Pierce counties rose nearly 8 percent, to $952, during the past year, according to Dupre + Scott Apartment Advisors.
Why are more people renting? Continued low unemployment and higher barriers to first-time homebuyers with questionable credit, thanks to the mortgage industry meltdown.
"As long as there are jobs and job growth, it will stay strong. And when the housing market becomes more difficult for people to access, people become renters," said Tom Hoban, chief executive of Everett-based Coast Real Estate Services, which manages rental properties around the Northwest.
Not only are jobs plentiful in the region, but people keep moving here as well, said Mike Scott, co-owner of Dupre + Scott, which tracks the rental market. Despite that, construction of new apartments has been at its lowest ebb since 2005, as developers focused until recently on building more condominiums and single-family homes.
In the early part of the decade, vacancy rates locally topped 10 percent for many properties. That has changed dramatically. The countywide vacancy rate for apartments stood at 4.8 percent as of March, Dupre + Scott reported. That's about as low as it gets, Hoban said.
No longer are property managers and apartment owners offering hundreds of dollars, free TVs and other perks to attract new residents. Three years ago, just about two-thirds of rental properties offered incentives, according to Dupre + Scott. Now, less than 15 percent do.
At Copperstone Apartment Homes, just south of W. Casino Road in Everett, a manager said there's no need for incentives. That property, which underwent a partial renovation in 2007, offers one-bedroom units starting at $715 a month, well below the average for apartments near Paine Field.
North and east of Everett, it's an even tighter market for renters. In the area stretching from Marysville to Monroe, only 1.5 percent of units were vacant last month, Scott said.
Hoban attributes that to more people looking to rent in less expensive communities and the greater restrictions on developing apartments in those areas.
"We're doing a greater job of protecting the environment, which is a noble goal, but it's making it harder to build affordable apartments," he said.
Scott pointed out the main reason the regional vacancy rate isn't lower has to do with the slowdown in the housing market. Unable to sell single-family homes or condos at the prices they want, more owners are renting out those properties in the meantime, creating competition for apartments.
That, along with the possibility that the uneasy economy will start shedding jobs in the Puget Sound area, could lead to more empty apartment units. Also, developers are building new units again. In downtown Everett alone, two large developments -- Library Place and Potala Village -- could add several hundred apartments to the market in the next two years.
Reporter Eric Fetters: 425-339-3453 or email@example.com
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