While home rental price growth has cooled off at the start of the year, the past five months have seen a 4.2% increase in rents throughout the Seattle area. The Seattle rental prices have been experiencing some of the largest jumps in the Nation. The figures for May show a rise in rent by 11%. Overall, there has been a 35% increase in rents since 2011 in the City of Seattle – so the trend continues upwards.
This has led to speculation about a housing bubble for Seattle rental prices, however experts aren’t worried, generally attributing the sustained price rises caused by high demand for housing plus an influx of wealthier renters.
The most recent census data outlines a change in demographics in the city. Higher paying jobs, particularly in the tech industry, have seen an upward trend in the average household income by about $7000 in 2015. Higher household income means more people who can afford the increasing Seattle rental prices.
Many of these younger people in high paying jobs aren’t interested in buying homes yet. A survey released by Zillow, 48% of renters in the Seattle area earning over $90,000 do not anticipate buying within the next five years. The reasons listed include the flexibility of renting and a desire to pay off student loans before taking on more debt.
Looking to capitalize on the upward trend of Seattle rental prices?
North Seattle is one of the more popular investment zones as it’s both convenient and features affordable Seattle rental prices. North Seattle boasts easy access to shopping and works well for commuters via the Rapid Transit system. Property affordability matched with a surplus of renters in the market results in a successful investment property.
If you are interested in longer term investment, neighborhoods like Wallingford and Fremont, Capitol Hill, Greenlake and Queen Anne hold more expensive homes that, in turn, demand a higher rental price and you will also see your property value increase over time. These neighborhoods hold business-friendly communities and are favorable amongst those renters in high-income brackets. An example given by Zillow is that the South Lake Union Tech workers living in Seattle, they concentrate in Belltown at 5.3 percent, Queen Anne at 4.4 percent, and Capitol Hill at 2.5 percent. Those under 30 are more likely to want to live closer to work, in those listed neighborhoods rather than travelling further out. They are also willing to pay higher rents to live closer to work.
The University district is always a safe bet for investments as a turnover of students and staff means renters are constantly in the market.