Seattle-Tacoma Multifamily Investment Forecast
Transplants and Rising Home Prices
Strengthen Rental Demand in the Puget Sound
Deliveries reach a record high. Seattle's diverse economy is attracting residents to the metro, underpinning rental demand in the Puget Sound, especially in suburban neighborhoods. The rise in population coupled with the addition of 118,000 jobs last year contributed to the largest spike in net absorption over the past two decades. As a result, vacancy contracted nearly 200 basis points to near a historical low, despite deliveries reaching a 20-year high in 2021. Expectations for robust employment growth this year will continue to stimulate in-migration, further bolstering apartment demand. Additionally, many prospective homebuyers are opting to delay homeownership, as single-family home prices rank among the highest in the nation. Limited housing options will steer these individuals to the rental market, prompting developers to ramp up construction. Deliveries will surpass last year's record supply wave, resulting in a modest uptick in vacancy this year. However, the rate still remains below the 10-year-trailing average.