Apartment Rents Keep Dropping—And Not Just in Seattle

The income situation for apartment owners in the Seattle area continues to deteriorate. And, of course, renters are getting a break for the first time in years. Conditions vary around the region, but rents in the more expensive markets are mostly dropping.

Figure 1 shows median rents for one-bedroom apartments in sub-markets around the Puget Sound area for September 2019 and September 2020, and year-over-year change.

The most expensive area, Bellevue, saw a small drop, while the next three most expensive saw significant drops. Otherwise, it is difficult to see much of a pattern: Burien is up sharply while neighboring Tukwila is down sharply. Markets farther from Seattle have seen rising rents, but not in every case. Caution is advised when looking at markets like Lakewood, Bremerton and Oak Harbor, where shifts in military populations can have a major impact on rentals.

Nationally, the Seattle market continues to have among the largest rent drops. Figure 2 shows rental changes in the nation’s most expensive apartment markets for October, and Figure 3 shows the markets with the largest drops. Both figures are taken from data on 101 U.S. markets, some of which are in the same metro area.

Seattle’s drop in October is even larger than in September and is right up there with the markets feeling the most pain. As with the regional data, it is difficult to see any national pattern. Yes, the expensive coastal markets are seeing rent drops, but so are lower cost markets in Texas and the southeast.

Figure 4 shows the larger markets that have seen the largest rent increases in the past year.

We can see a bit more of a pattern here, with mostly lower cost areas in smaller markets seeing the big increases. Some larger cities that have been slower growing, like Baltimore, Cleveland and Cincinnati, have also seen strong rent increases.

Looking Ahead

It would be easy to draw conclusions from this data and to attempt to predict future directions for markets based on anecdotal evidence about pandemic-related moves. But this would be premature. There are too many factors in play right now, with some markets just naturally overheating, some over-built, and some hitting a normal cyclical downturn. This is one more instance of the pandemic watchwords: wait and see.