Thanks, giant new apartment buildings!
Shortly after I started this blog in 2012, I wrote that increasing the supply of housing in Seattle was likely to stabilize, or even lower, rents. Now, just under 18 months later, the good news has arrived: in the fourth quarter of 2013, rents in the Seattle metro not only stabilized, but actually fell (by 5 bucks!).* And with 14,140 more units under construction -- 9,700 of them planned to open in 2014 -- I think the city can expect to hear more good news in the coming quarters.
As I wrote just yesterday, this all comes down to staying ahead of the market. Specifically, it's about getting out of the way enough to allow developers to build enough housing to actually meet the demand for it. It's what places like San Francisco have failed to do, and it's heartening to see that Seattle isn't falling into the same housing affordability death spiral. By building more units they've managed to turn the corner on a constantly declining vacancy rate, putting more power into the hands of renters. Now property managers are forced to compete for tenants, rather than the other way around.
*If the numbers don't take into account inflation this is especially good news, because it means that rents are dropping even more in real terms. A one-percent reduction in rents with a two-percent inflation rate is, in real terms, a rent reduction of 3 percent.