Bosl attributes the relatively flat rents in Denny Regrade Bosl to a spike in supply. "A number of new projects are in lease-up, making the market fairly competitive. These higher-end projects are coming on line at a time when the economy slowed a bit." The good news is that because the area is so desirable, the new product is being well absorbed. And, with traffic conditions in Puget Sound only expected to worsen, most experts expect a continued migration (by those who can afford it) to the urban residential communities.

As for the remaining four areas of the Seattle market, the Downtown/First Hill neighborhood came in second place with average rents of $1.58 per sf. This translates to a six-month increase of 7.48%--the highest in the market. Shoreline posted third in rents ($1.10 per sf) and a flat 2% vacancy.North Seattle experienced the only decrease in average rents, moving –0.92% during the first half of the year. However, the area's vacancy rate was a respectable 2.10%. Last on the list was West Seattle/White Center, averaging only $0.94 per sf in rents. It also had the highest vacancy rate at 3.7%.

As to the near-term future, the Puget Sound Economic Forecaster is predicting a slowing in employment growth in 2002 (1.6%) compared to its projection for 2001 at 1.7%. The publication is also anticipating an up-tick in population growth to 1.5% next year, and a 0.02% increase in unemployment next year to 4.8%. While these projected figures may not bode well for the overall economy, they do look good for the apartment industry as economics have many holding off on the purchase of a home until better days arrive.