What does the future hold for Seattle’s rental market? Crack open the crystal ball of statistics and see what the rental market has in store. Whether you’re purchasing or currently own Seattle houses for rent, you need to know what your existing and prospective tenants will be doing in the months ahead.
Rising Rents in Seattle
In the last few years, Seattle’s rental market has been tight. In July of 2016, the Seattle Times stated that “for the first time this decade, rents in the Seattle area are soaring faster than in any other big city in the country.” The rental housing market has been hot, buoyed by a combination of younger people moving to the city for the tech industry and retirees shifting into new homes.
Higher rental rates have been a boon for landlords who are using rent to pay off a mortgage or support their income. If you purchased a home before the market got more expensive and you’ve benefited from higher rental rates, you’d probably be content if the rental housing market stayed just as it is right now.
Is the Seattle Housing Market Entering the Danger Zone?
Renting is popular for people who don’t want to settle down, but it’s also the only option for many who aren’t able to afford a home in the Seattle area. Seattle houses for rent have been a valuable addition to the city’s housing stock for those who aren’t able to make their budget stretch.
All of this could change if the cost of a mortgage becomes the same or less than the cost of rent. According to The Mortgage Reports, “many professionals say it’s wise for prospective home buyers to think about purchasing relatively soon.” Interest rates are low, while housing prices are rising. With historically low mortgage rates, some tenants may be able to find a property with a mortgage that’s about the same as their rent.
Will You Lose Your Tenants?
What does this shifting housing market mean to landlords? Will your tenants flock to purchase properties of their own? That depends on their motivation. If you’re primarily working with tenants who want to stay mobile in their careers and enjoy the freedom of having someone else manage a property, chances are they’re simply not interested in purchasing right now. If you have many tenants who are biding their time and waiting to get into the housing market for the long term, they may choose to move due to the current market conditions.
According to UrbanLand, “real estate researchers are predicting slower economic growth, slipping real estate fundamentals, and lower returns from both the public and private markets.” A home is still a long term investment, due to appreciate slowly over time. Tenants who want to purchase and then flip a property could be turned off by the slower rise in housing prices.
Should You Add to Your Property Portfolio?
If you’re considering adding properties to your portfolio and you want to take advantage of those same low interest rates, this would be a good time to move into the market once again. Landowners who see property purchases as a long term investment can take advantage of lower interest rates and higher rent prices to add to their property portfolios.
Are you looking for someone who can help you manage your growing portfolio of properties? Turn to Lori Gill and Associates. We have the skills you need to manage your Seattle houses for rent, and we know the Seattle area. Connect with us today.