APARTMENTS VERY EXPENSIVE FOR THE AVERAGE FAMILY- WE RENT FOR YOU!

MORE THAN 60% OF AMERICANS HAVE POOR CREDIT SCORES!

“Over the past couple years, millions of Americans have reneged on their debts — because they lost their jobs, because they took on more than they could handle, or both. For many, those defaults have brought immediate financial relief, leaving more cash to spend on other things. Now, though, they’ll also have to face the challenge of living with bad credit.  As of April, 60% of Americans had fallen into the least-creditworthy category, garnering a rating of less than 600 from FICO, the main arbiter of consumer credit in the U.S.  Families that aren't credit worthy, are having a difficult time obtaining apartment living unless they use a cosigning company, such as "We Rent For You Nationwide Apartment Cosign Company.  

APARTMENTS VERY EXPENSIVE AND HARD TO FIND!

The Seattle area's apartment market has only been this tight three other times in the past three decades, according to a new report.

Just 3.8 percent of apartments in big buildings are vacant in the Puget Sound region, not counting buildings in initial lease up or undergoing major renovations, Dupre + Scott Apartment Advisors reported. That's down from 4.7 percent last March and the lowest rate since 2007.

Things are even tighter in Seattle and King County, with vacancy at 2.9 percent and 3.3 percent, respectively, down from 3.1 percent and 4.1 percent a year ago. The competing Apartment Insights survey found King County vacancy at 4.5 percent, down from 4.8 percent last quarter.

"Gross" vacancy, which includes new buildings, is 5.2 percent. That's unchanged from a year ago and down from 5.5 percent last fall, despite nearly 7,000 new apartments hitting the market over the past 12 months, Patty Dupre wrote. "That's more new units than we have seen in any calendar year since the early 1990s."

What's going on?

The Seattle metro area has added more than 100,000 jobs since the unemployment rate bottomed out in February 2010, according to Apartment Insights. "This represents 82.3 percent of the payroll jobs it lost during the recession." As one would expect, the tightening vacancy rate is pushing up rents. Average rent is now $1,410 in Seattle, $1,173 countywide and $1,066 across the region, up 10.8 percent, 6.8 percent and 5.5 percent, respectively, from March 2012, Dupre + Scott reported.

"Before you get too excited about that number, some of the increase was created by new units opening up in the past year," Dupre + Scott wrote. "New construction rents for more. That distorts rent trends. Excluding the new units that opened in the past year, rents still posted a healthy 3.7 percent increase (in the region)."

This carries over into Seattle neighborhoods with many new apartments. Taking out new apartments drops rent increases over the past year from 15.2 percent to 6.4 percent in Ballard, 15.6 percent to 7.3 percent in First Hill and 17.1 to 8.2 in Queen Anne, Dupre wrote. "Even after kicking out the new construction, these are still very significant increases."

And the region's apartment managers plan to raise rents another 2.8 percent over the next six months, Dupre + Scott added. "That's the most bullish they have been about rent increases since early 2008."

Excluding new construction, rents are the same as they were in 1969, adjusting for inflation, Dupre + Scott reported. They said there's potential for rents to rise 18 percent in King County over the next five years, based on the relationship between rent and income since 1980.

Apartment Insights reported an average rent of $1,155 in King and Snohomish counties, up 1.3 percent from last quarter. Just 20 percent of buildings are offering incentives, such as free months of rent, to draw new tenants, with concessions offered averaging $480, Dupre + Scott reported. "That's the fewest number of properties offering concessions since early 2008."

But two-thirds of apartments built since the beginning of last year offer concessions, and those average $1,024, Dupre + Scott added. "Expect concessions to become more common again with all the new units scheduled to open over the next few  years." Apartment Insights reported just over 30 percent of buildings offering incentives in King and Snohomish counties. The apartment market is known to swing from glut to shortage, and there are signs the pendulum is swinging.

Developers are building 15,000 apartments region-wide, plan to start another 5,000 by the end of June and expect to open more than 34,000 between 2013 and 2017, according to Dupre + Scott. "Developers are set to open more units this year than our market has seen in more than 20 years. And they plan to do it again next year and again in 2015." But, Dupre added: "Some investors tell us they don't believe all this new construction will happen. They think the gap between actual rents and what developers need to get is too great."

Apartment Insights reported 12,006 apartments under construction in King and Snohomish counties, up from 11,678 units last quarter and 8,155 units a year ago, with 73 percent of the units in Seattle. The firm projects 8,318 apartments will open in the two counties this year, the highest annual total in more than two decades.

"This quarter's strong performance will certainly continue to encourage developers and lenders to keep moving ahead on their proposed projects," Apartment Insights wrote. "Certainly, the ever-increasing volume of units in the pipeline, up nearly 10 percent this quarter to about 35,000, is cause for  concern." Another factor to consider is home prices that are still below boom peaks and made more affordable by historically low mortgage interest rates. Mortgage payments for median-priced condominiums are now 39 percent lower than the average two-bedroom, two-bath rent in King County, Dupre reported. "That's the widest gap we have ever seen and marks a dramatic and major historical reversal in the relationship between renting and owning, at least from a monthly payment perspective."