Seattle is known for its hip neighborhoods, soaring home prices, and being home to Amazon.com Inc., the world’s most valuable company. So why is its rental housing market experiencing the most severe slowdown in the U.S.?
Seattle-area median rents didn’t budge in July, after a 5 percent annual increase a year earlier and 10 percent the year before, according to Zillow data on apartments, houses and condos. While that’s the biggest decline among the top 50 largest metropolitan areas, it’s part of a national trend. Rents in Nashville and Portland, Oregon, have actually started falling. In the U.S., rents were up just 0.5 percent in July, the smallest gain for any month since 2012.
“This is something that we first started to see two years ago in New York and D.C.,” Aaron Terrazas, a senior economist at Zillow, said in a phone interview. “A year ago, it was San Francisco and most recently, Seattle and Portland. It’s spreading through what once were the fastest growing rental markets.”
Tenants are gaining the upper hand in urban centers across the U.S. as new amenity-rich apartment buildings, constructed in response to big rent gains in previous years, are forced to fight for customers. Rents are softening most on the high end and within city limits, Terrazas said. Landlords also have been losing customers to homeownership as millennials strike out on their own, often moving to more affordable suburbs.
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