The Seattle/Tacoma area apartment market ranks eighth nationally based on anticipated job growth in 2012, according to a new research report from the real estate services firm Marcus & Millichap .
The Puget Sound area vaulted seven slots, moving from No. 15 last year to No.8, based on job growth among its tech companies. The regional economy is expected to add 34,000 jobs this year.
Tech sector employment also boosted the other top 10 markets. Job growth in the Bay area’s Silicon Valley helped San Jose rise from No.4 in 2011 to the top spot in 2012. San Francisco, meanwhile, moved up five places to No. 2, followed by New York, Boston, Orange County, San Diego and Austin.
The Puget Sound area’s brightening economic outlook put it among the most improved markets in the country. Philadelphia posted the biggest increase, rising nine slots to No. 10. San Antonio and Indianapolis moved up eight places, followed by a cluster of five cities, including Seattle, that moved up seven notches.
Nationwide, moderate growth is projected for the rental market as 2.1 million twenty-something echo boomers move out on their own into the rental market and immigration increases. Last year, young adults in the age range of 20 to 34 years old absorbed 70 percent of new jobs. Household formation expected to increase 29 percent to an annual average of 1.4 million over the next three years.
There is a new construction cycle underway in job centers in King County, with some 1,900 new rental units expected to open across the region in 2012.
Areawide, vacancies will drop to 4 percent, with vacancies in downtown Tacoma and around Joint Base Lewis-McChord sliding below 4 percent and 5 percent, according to the report. Tighter vacancies will enable landlords to push rents up. Area asking rents are expected to increase 4.2 percent to $1,057, Marcus & Millichap said.
With the rental market improving, investors are on a shopping spree. While well located, newer apartment projects have attracted investors, improving rental income is increasing investment interest in older, cheaper, less well-located apartment complexes.
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