"Rent levels (in South Seattle) have not dropped as precipitously as some of the other closer-in markets," says Paul Mickley, a partner with Paragon. He adds that while vacancy levels are higher than this time last year, they "have not reached levels normally considered to be 'unhealthy' in most neighborhoods."
This sub-market includes the communities of Burien, Georgetown, White Center, Beacon Hill, Rainier Valley, Riverton/Tukwila and an area near Seattle-Tacoma International Airport. As of Paragon's May 1 report, the area hardest hit by vacancy is Riverton/Tukwila—which is now carrying vacant units to the tune of 8.2%, compared to a rate 12 months ago of 3.0%.
In contrast, the tightest vacancy in the sub-market is the 3.8% of the Rainier Valley. This figure represents a 192% increase over the 1.3% vacancy rate of a year ago. At a current rate of 5.2%, Beacon Hill stands as the area with the least amount of change in its vacancies over the last year when it 5.1%.
Mickley says a main attraction of the sub-market is its close proximity to downtown Seattle via State Route 509, Highway 99 and Martin Luther King Jr. Way—each of which allows residents a daily commute that avoids the heavily-congested Interstate 5. Here, rent levels are far more modest that others around Seattle, allowing relatively affordable housing within a ten to 15-minute commute of downtown Seattle.
Mickley says rents here have flattened or declined somewhat as vacancies have risen over the last year. "However," he notes, "the rental rates in this market have not been affected as much as some of the more affluent areas in and around Seattle, which have traditionally charged much higher rents."
Paragon's report shows one-bedroom rates in these neighborhoods running in the high $500's to the mid-$600's. In the Rainier Valley, a two-bedroom unit now averages $697, with comparable properties in Beacon Hill fetching $1,195.
Mickley expects vacancy rates here will decline with local economic recovery. And, he anticipates investor demand to remain strong, saying new construction in South Seattle should be sparse over the next few years.
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