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Report: Puget Sound Apartment Market Shows Signs of Stabilization
Rents across Puget Sound are up slightly year-over-year, as the Seattle area apartment market shows signs of stabilization. According to a recent report by Kidder Mathews, vacancy rates are holding around 7%, and cap rates in most submarkets appear to be settling in the low-to-mid 5% range.
Investors cautiously returned to the market in Q3, with sales reaching $983 million across 60 transactions, up 83% and 46% year-over-year. The average cap rate was 5.1%, unchanged from last year and down 30 basis points from the previous quarter.
With higher interest rates and construction costs slowing new development, vacancy is expected to decline as current supply is absorbed. Most Puget Sound submarkets saw modest rental rate growth, around 1% year-over-year, with a continued, gradual increase projected.
“As we enter the fourth quarter, it’s clear that the market gained footing over the summer with rental rates holding firm and the investment market returning,” said Dylan Simon.
