Is Seattle rent actually starting to fall?

After years of rising rent costs, could things get a little easier for Seattle renters? A new report from real-estate group Zillow shows that for the first time in years, rent not only didn’t increase in the Seattle metro—it showed signs of reversal.

In the Seattle area, which includes Tacoma, Everett, and Bellevue, there’s not too much of a difference from August 2018 and August 2017—just a 1.1 percent decrease in median rent, according to the report. But that’s still a gigantic difference over the previous year; between 2016 and 2017, rent increased 5.4 percent. It’s an even more dramatic change compared to our fastest growth period, clocked at 9.8 percent year-over-year in July 2016.

While a 1.1 percent decrease may not seem like much, the difference is more dramatic in Seattle proper. Median rent decreased a full 4.5 percent within the city limits. That’s not to say rent isn’t more costly, even unattainable, than longtime Seattleites are used to: Median rent is $2,481 across home sizes. But it’s more than notable; rent actually decreased over the past year more than it increased (4 percent) the year before.

While Zillow is just one source, this is starting to be corroborated by data from other sources. Apartmentlist, for example, found a 2.4 year-over-year decrease in the Seattle city limits over the same time period.

This data shows signs of a tipping point for Seattle rentals that’s been on the horizon for a little while. Back in January, reports showed a dramatic slowdown in rent increases. Landlords, increasingly, tried to entice prospective tenants with giveaways and short-term deals, but at the time, the rent itself wasn’t decreasing yet.

Zillow senior economist Aaron Terrazas attributes the change to a dramatic increase in inventory. In the metro, rental housing supply grew a whopping 32.9 percent over the past year.

“The boom in multifamily building after the housing market crashed is catching up, with new units coming online and adding to the supply of rentals in Seattle,” said Terrazas over email. “At the same time, a large swath of millennials, particularly at the older end of the age range, are entering the homebuying market, which eases up on the demand for rental units.”

But classic supply and demand isn’t the only force at work, according to Terrazas. Part of it is that for certain kinds of apartments, rent got impractically high.

“It’s also a sign that affordability is getting stretched, and renters can’t afford to pay more,” Terrazas continued. “Most of this slowdown is happening at the more expensive end of the market compared with more affordable rentals, where demand is still relatively strong.”

Not all Seattle-area renters are fortunate enough to get a slowdown, though. While majorly expensive cities like Bellevue, with a median rent price drop of 3.1 percent, showed a decrease larger than the metro as a whole, areas that have historically had cheaper rents are still seeing increases.

Tacoma, for example, has been increasingly unaffordable, with housing costs outpacing Seattle’s for quite a while now. The City of Destiny saw a 3.4 increase in rent, although it’s a slower increase than 6.2 percent the year before.

• Rents Flat Year-Over-Year for First Time Since 2012 (August 2018 Market Report) [Zillow]