Tacoma Rents Rise Faster Than ... Everywhere Else
A report by Reis, Inc, a commercial real estate analysis company, lists Tacoma at the top of the list for 12 month apartment rent growth. Depending on which version of the press release one finds, Tacoma’s rents increased by either 7.3 or 7.7 percent. Whatever the case, Tacoma is at the top of the list. Seattle is second. San Francisco is in third. Austin, for example only increased by 2.1% this year. Palm Beach, Florida, saw rents decrease by 0.7%. In total, Reis tracks 79 metro areas.
The article cites the fact that the Pacific Northwest is home to some of the country’s strongest companies. Okay. Sure. That’s why our rents are going up?
Filed under: Developments, General
16 comments
E Erik B. October 7, 2008
The article cites the fact that the Pacific Northwest is home to some of the country’s strongest companies. Okay. Sure. That’s why our rents are going up?
It may be because so many of the condos are now being offered for rent now.
This means that the same pre-existing unit is not going up much but the new units are bringing up the average which makes it a non-story.
J Jake October 7, 2008
This is all of Tacoma not just downtown. 1 or 2 condo to apartment complexes with high rents shouldn’t affect the stats very much.
I also doubt that some of the condo complexes that have sold units and that are now renting out would be counted.
C crenshaw sepulveda October 7, 2008
Maybe one or two condo to apartment complexes shouldn’t increase the rents that much but when you factor in all the apartment buildings that have gone condo, along with the high priced apartment complexes going up recently. I’m not seeing the wages of the people going up as much as the rents.
I can understand Seattle going up big time (with all those big companies in Seattle) but what is the reason for an even higher increase in Tacoma? As an aside, I haven’t noticed anyone moving into the Mecca now they’ve gone rental. Maybe the rents are too high?
N NSHDscott October 7, 2008
I agree it must be a combination of new condos turned expensive apartments, and nice new apartments being constructed, plus I would add that a few of the crappier apartments got condoized and thus taken off the rental market.
Tacoma’s a great city in a popular region yet was undervalued for so long that it has more room for improvement than most cities. This ranking is no surprise to me.
D Derek staff October 7, 2008
I agree it must be a combination of new condos turned expensive apartments, and nice new apartments being constructed, plus I would add that a few of the crappier apartments got condoized and thus taken off the rental market.
It could be supply and demand, but were/are we any different from the rest of the country in this regard? I used to read stories about the condoization of neighborhoods in every metropolitan area. There must be something else other than a high percentage of conversions driving the rental strength here.
E Erik S October 7, 2008
Anyone know whether REIS is counting market clearing rents or just the prices asked?
I agree that the “repartment” factor seems like a prime suspect in this case. I also wonder if owners of existing rental units are trying to play catch-up with the juicy rents they see the developers asking for.
T TacomAroma October 7, 2008
Gentrification/Yuppie Invasion.
N Nick October 7, 2008
Don’t forget that we are talking about Tacoma having a higher growth rate not higher rent prices themselves. This does not mean that we have higher average rental rates compared to say Seattle.
I’m willing to bet that the increase in demand for rental units regionally has pushed a lot of people from up north down here chasing the relatively cheaper rent rates that are available (causing our rental growth to rise more dramatically). The south sound had a lot more upside potential for growth, and it sounds like that upside is being realized.
J Jake October 7, 2008
It is probably for actual rents collected. Just like real estate sales you wouldn’t do stats on the price of pending sales because once it closes the actual sales price may be different then the listing/pending price.
Hana Heights is currently the only larger building I know of that has gone full rental. Even though it is still a condo building and each unit has its own parcel number.
Mecca is the only smaller condo complex I know of that has gone all rental.
E Erik S October 7, 2008
Hmm…that’s part of the reason I was wondering about rents asked vs paid. Got to be a lot of empty units if they’re not being rented out.
S Sassy McButterpants October 7, 2008
Yuppies are people too.
I don’t think it’s nice to always talk mean about them just because they don’t have ironic facial hair or don’t want to live in vintage apartments that aren’t seperately metered.
O onbroadway October 7, 2008
Tell me about it. One of the three reasons I’m not onbroadway any more is that the rent in my vintage, marginally-run “starter” studio apartment went up 38% in less than three years. The days of decent, affordable apartments is long-gone. Rent in Tacoma has always been on the rise, but the curve seems to have steepened. But there aren’t that many great-paying jobs in the city. What you think, Derek, business-person and apartment guru?
E Erik B. October 7, 2008
Don’t forget that we are talking about Tacoma having a higher growth rate not higher rent prices themselves. This does not mean that we have higher average rental rates compared to say Seattle.
True. Tacoma’s rental rates have been severely depressed for decades due to fear of crime, pollution and general blight.
Perhaps the increased rates will make some other buildings finally feasible to build on one of the many vacant lots.
O onbroadway October 7, 2008
Yeah, I think I agree with your points, Nick and Ebj. And renters are now charging what they can, because they can. That wouldn’t have happened back in the day. I’m curious about exactly how they came up with their figures, but I believe them.
T Thorax O'Tool October 8, 2008
Jake, don’t forget that Chelsea Hts is supposed to go full-rental when (if) it ever opens. But least we forget, a $1700 rent for an apartment in an area that usually sees $800 will certainly skew the mean. Hell, even all those new buildings on in St Helens (Bella, Metropolitan, One St Helens) are definitely pricier than what we’ve been used to seeing. Those places are certainly altering the average.
I just wonder if the calculated rent growth is by the median or the mean.
House prices have fallen nowhere near enough for most people to afford. Add in many folks losing their homes. Add in the significantly lower living costs in T-Town (vs Seattle and the Eastside). So now there is more demand, especially considering all the subprime etc loans that got people into homes they shouldn’t have been able to buy are extinct. There are more renters than in previous years, and apartment building has not kept pace with all other residential building. Let’s also not forget that factor of good old fashioned greed.
It all adds up.
L Landlord Bob October 9, 2008
Not mentioned as a major reason in the jump in rents has been the enormous jump in taxes and utility expenses. These have increased about $20 per unit per month in my modest priced units.