As the largest city and economic center in the state of Washington, Seattle is known for its large technology sector and globally recognized companies, which has led to impressive growth of its educated and young population. Seattle’s employment metrics saw positive movement in 2022, with 4.8% year-over-year job growth as of November 2022 versus 3.2% nationally.[1] As of November 2022, Seattle had an unemployment rate of 3.0%, which slightly dropped from 3.1% from November 2021.[2] The sectors of Seattle’s economy showing the greatest year-over-year growth are: 12.7% in professional and business services, 12.4% in leisure and hospitality, and 11.5% in information technology.[3]
RealPage estimates that slightly over 14,900 new apartment units will be delivered in Seattle-Bellevue-Everett in 2023 while also projecting that approximately 11,900 units will be absorbed in that time. This projected shortfall of demand relative to supply will likely result in downward pressure on occupancy. Annualized effective rent growth continued positive movement at 6.1% as of 4Q 2022. Occupancy rates saw a slight decline in 2022 from 96.7% in 4Q21 to 94.9% in 4Q22. RealPage forecasts effective rent growth of 3.4% and occupancy 94.3% for 2023.[4] Seattle’s large technology and aerospace workforce, coupled with continued work-from-home acceptance, should prove favorable for its multifamily market fundamentals, especially in the Seattle suburbs. However, as with many urban cores, downtown Seattle has been slower to recover than its suburbs and will require the return of downtown workers for the office, retail, and multifamily sectors to return to pre-pandemic performance.
Contact us to learn about our Seattle/Tacoma real estate investment strategy. To view our Seattle/Tacoma properties, please visit our affiliated CWS Apartment Homes website.
Disclaimer: The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor. Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.
References:
[1] RealPage 4Q22 Seattle Market Performance Summary (Pg. 3)
[2] https://data.bls.gov
[3] RealPage 4Q22 Seattle Market Performance Summary (Pg. 85)
[4] RealPage 4Q22 Seattle Market Performance Summary (Pg. 1)