April Market Watch: Seattle Multifamily Market Poised for Growth in 2011

The Seattle metro area has one of the strongest multifamily markets in the nation, and a number of recent reports have focused on the market’s strength.

The Seattle apartment market has rebounded from the deepest recession in recent memory more quickly than many expected. At the height of the recession in fall 2009, vacancy rose to 7.2%, according to Dupre + Scott Apartment Advisors’ March 2011 Apartment Vacancy Report. Today, vacancy has fallen to 4.6%, and the company expects it to continue to decrease in the coming year. The market is showing other signs of stabilization: landlords are offering fewer concessions, and rents have begun to rise, though they haven’t yet gotten back to peak levels.

The Dupre + Scott report theorizes that persistent weakness in the single-family housing market is discouraging many from purchasing a house or condominium, which is one reason the apartment market is thriving. They expect that during 2011, apartment vacancy will continue to fall, rents will continue to rise, and concessions will essentially disappear.

Apartment Insights’ First Quarter Report provides similar predictions about the strengthening apartment market in 2011. It expects just 1,866 units to come online in 2011 and only about 2,000 in 2012. So development will ramp up during 2011, and many more units will deliver in 2013 and after.

The Seattle metro area placed fifth on Multifamily Executive’s list of the Hottest Multifamily Markets for 2011, or those where they expect the most development to occur. 3,692 multifamily permits were issued in Seattle in 2010, an impressive 57% increase over 2009.

NBS Financial Services not only arranges financing for multifamily properties, but can also secure financing for any type of commercial property, including office, industrial, retail, self-storage and hotel. In the past few years Fannie Mae & Freddie Mac have been most competitive on multifamily financing. More recently, life insurance company lenders’ spreads have compressed to be competitive with Fannie and Freddie rates. NBS Financial Services has lending relationships with life insurance companies, Fannie Mae, Freddie Mac, FHA, banks, credit unions, structured finance and specialized providers of mezzanine bridge and equity capital. With low interest rates and strong market fundamentals, now is a good time to refinance any commercial building.