Multifamily construction contracts in metro Seattle have fallen below the 10-year average for the first time in three years. The number of market-rate units that are currently being built has dipped under 20,000, as compared to a six-year peak of nearly 29,000 units in 2023.
As under-construction projects are completed, there are fewer developments breaking ground to refresh the stock. The first half of 2024 saw groundbreaking on about 2,700 apartment units, a 40-percent drop from the first half of 2023 and the slowest start to a year since 2010.
New construction projects center around the region’s core cities and suburbs – Seattle, Redmond, Kirkland, Shoreline and Bellevue, with nearly half the starts in Seattle proper. In most areas, construction has slowed in 2024; Shoreline and Redmond are the exception, experiencing an increase in the number of units being built in the past year. This is thanks in part to the demand created by the addition of light rail service to those communities.
A pullback in construction lending and rising interest rates have resulted in stalled or cancelled projects. Despite the challenges to current and future projects, the slowdown could ease up demand on current operators while the market absorbs the units already delivered in the past few quarters.
This post was based on information found on CoStar.
