Among the country’s especially active building centers, Seattle now ranks as the leader for urban core apartment performance by a huge margin. Annual rent growth is running at 7.2 percent in the heart of downtown, and similar pricing momentum exists in adjacent urbanized zones like South Lake Union, Queen Anne and Capitol Hill.
So far in this economic cycle, urban Seattle has managed to digest some 19,600 units of new supply, and the downtown job base continues to expand very rapidly. Ongoing construction in the urban core tallies about 10,400 units, further putting absorption capacity to the test. Even with this new supply likely to slow urban Seattle’s rent growth pace from the sky-high level recorded now, the Emerald City still appears positioned to remain the nation’s healthiest urban apartment market for at least a couple more years.
Other downtown apartment markets currently recording strong performances include Philadelphia, Orlando, Fla. and Tampa, Fla. Downtown rents across the trio of cities are moving up about 5 percent to 6 percent annually. However, time on the rent growth leaderboard could prove short for these metros. Building activity is kicking into higher gear, after comparatively few urban core deliveries came to market over the past few years.