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Renting in Tacoma’s tight market for apartments

Demand for apartment units remains high in the Tacoma apartment market, even as hundreds of new units have come on the market.
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Demand for apartment units remains high in the Tacoma apartment market, even as hundreds of new units have come on the market.

Rents are still increasing in Pierce County, but at the slowest pace in at least four years.

A typical two-bedroom apartment now rents for $1,543 a month — up 3.1 percent from the same time last year, according to the website Apartment List. By comparison, local rents in 2015 were up 7.5 percent over the year before.

It's the same story elsewhere in state. Apartment List's reported these rental changes:

Olympia's rents increased 2.6 percent compared to 2017, to $1,218 a month.

Bellingham's rents jumped 5.1 percent, to $1,120 for a two-bedroom apartment.

Seattle's rents dropped by 0.8 percent compared to last year, to $1,646.

Statewide, rents increased 1.6 percent compared to last year, to $1,449

Why have rental increases slowed?

Developers are building more housing.

In the first three months of the year, 1,439 apartments opened for rent in Pierce, Kitsap and Thurston counties, according to a recent report by Apartment Insights, which tracks rents of apartment buildings with 50 or more units. The number does not include small apartment buildings.

During that time, renters snapped up available apartments at the fastest rate for a first quarter since at least 2007, the first year Apartment Insights started studying the area market.

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In this 2016 file photo, an approximately 600-square-foot post-renovation one-bedroom suite model at Orion Apartments in Tacoma boats a variety of designer finishes. Chatting in the background is community business manager Kathlyn Muller, right, and assistant Nikki Trimble. Drew Perine dperine@thenewstribune.com

At the same time, the apartment vacancy rate in Pierce County dipped to 4.58 percent compared to the previous quarter. That number is slightly lower than for the same period last year, Apartment Insights reported.

The three-county region as a whole has a lower vacancy rate — 4.55 percent — with Thurston County at nearly 4 percent.

Low vacancy rates mean fewer apartments are available for rent, and that's a signal to investors that they can make money if they build more of them — and build they have.

In 2016, apartment construction nationwide was at the highest level since 1980, with the Puget Sound region as one reason why, according to federal mortgage lender Freddie Mac.

This year alone will see more than 2,145 units open in Pierce County, one apartment rental research firm predicted.

Last year, Freddie Mac said Tacoma would be third in the nation for income growth and touted the city's low apartment vacancy rate. Translation: People with higher incomes are better able to afford new apartments, which traditionally are more expensive.

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If you want to find one of these new buildings, just drive through nearly any Tacoma neighborhood.

The Proctor District's Madison25 building is to open this summer. Stadium Apartments is adding finishing touches for an opening within the next few weeks. Construction on a former parking lot next to the downtown Tacoma library started late last year.

Apartment buildings are also being bought and sold. In some case, the multimillion-dollar transactions are putting residents out on the streets.

Two months ago the city of Tacoma passed a tenants rights code, which requires a 90-day notice to residents asked to leave a property because of a substantial renovation, demolition or change of use. The ordinance doesn't cover substantial increases in rents that force out tenants.

Kate Martin: kmartin@thenewstribune.com, @KateReports
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