2024 Q2 Seattle & Puget Sound Apartment Market Dynamics

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Puget Sound rental rates continue a slight upward trend, while vacancy is the metric to watch as the market absorbs a large amount of new supply in 2024 — yet an end to new apartment deliveries is in sight.

  • In terms of the number of transactions, sales volume was relatively flat year-over-year, while the average transaction size decreased. Additionally, the recent cap rate expansion, which has been a theme since the Federal Reserve began aggressively raising interest rates in 2022, is showing signs of slowing. Specifically, in Q1 2024, the average cap rate on multifamily transactions in the region was 5.1%, up 10 basis points (bps) from the previous quarter.
  • New multifamily development starts have all but ground to a halt as the rising cost of debt and resulting uncertainty brought the profitability of development into question. That said, this should pave the way for several quarters of steady absorption, leading to what we expect will be a decline in vacancy levels across Puget Sound’s submarkets and a rapid rise in rental rates by mid-2025.
  • Rental rates in Q1 2024 were up 2.1% year-over-year to $1,971, marking a jump from $1,932 the previous quarter. With the recent deliveries adding a bit of vacancy to the market, we expect the trend of positive, but mild rental rate growth to continue into 2025.


While the transaction market remains tepid, our read on cap rates is that they appear to be stabilizing, which should encourage transaction activity in the coming quarters.

  • Sales Insight
    The average cap rate on multifamily assets sold during Q1 2024 was 4.9%, up from 4.8% in Q4 2023. Given the more significant jump from 2022 to 2023 (4.0% to 4.8%), cap rates are showing signs of stabilizing. In terms of sales, the number of transactions was up 31% year-over-year, while volume in dollar terms was down 51%, thus indicating a greater number of transactions of smaller assets and, therefore, likely amongst smaller investors.
  • Rent/Vacancy Insight
    Rent continued to inch up modestly across all multifamily product in Seattle with rental rates in the quarter reaching $2,049, on average. Here, vacancy has remained largely flat for smaller buildings (in the 6% range). For comparison, for larger properties (more than 50 units), vacancy was up 80 bps sequentially and 60 bps year-over-year. As such, the current vacancy rate of 8.7% is not elevated in the historical context (2017 to 2022). It’s also worth noting that we continued to see positive rent growth during this period.

North King

Sales activity remains very low in North King as investors continue to “wait and see.” Accordingly, with only two sales occurring in Q1 2O24, it’s too early to call a recovery in the transaction market.

  • Sales Insight
    The transaction market has been almost non-existent during the last two quarters, but is nevertheless beginning to show signs of life. While there were only two sales this quarter, this is up from just one in Q1 2023 and zero last quarter. Granted, the inactivity makes it difficult to identify patterns in cap rate data, so investors should be cautious when drawing conclusions from the apparent 65 bps year-over-year drop in cap rates.
  • Rent/Vacancy Insight
    Vacancy rates in North King have been back on the decline since the deliveries of a significant number of new apartment units in Q4 2023. Specifically, vacancy fell to 10.8% from 13.0% last quarter for larger buildings with more than 50 units, while rental rates were up 2%. Given the lack of new supply under construction, we expect this absorption — and commensurate decrease in vacancy — to continue throughout the remainder of the year.

East King

Rent growth has kept up nicely in East King. But, again, with limited sales activity and, consequently, little insight on true average cap rates, it’s unclear to what extent investors are pricing in this growth.

  • Sales Insight
    Sales volume in the quarter was down substantially year-over-year (86% in dollar terms). Much like in Q1 of the prior year, only four assets were traded; however, the transactions this quarter tended to be among smaller product and mom-and-pop investors. Again, given the smaller asset size and low activity, there was, unfortunately, no visibility on cap rates throughout the quarter.
  • Rent/Vacancy Insight
    Rent growth was notably healthier in East King as compared to other markets. Here, effective rent growth across product types was 4.9% in Q1 2024 and, thus far throughout Q2, is estimated at 5.1%. This above-average rent growth likely stems from the lower vacancy levels in East King as tech workers return to work and Amazon takes delivery of recently completed office towers in Bellevue.

South King

Investors are wading back into the South King multifamily market: Sales show increasing strength from the same period last year, and vacancy rates appear to be stabilizing for now.

  • Sales Insight
    Sales volume in dollar terms showed a substantial increase from Q1 of last year, increasing to $79 million — up 490% year-over-year. Likewise, cap rates continue their upward trend as they adjust to the higher interest rate environment of today. In particular, the average cap rate on transactions in Q1 2024 was 5.4%, which was a rise of 20 bps from the previous quarter.
  • Rent/Vacancy Insight
    After a couple of quarters of heavier-than-usual deliveries, vacancy rates appear to be stabilizing across all buildings in South King. Namely, the average vacancy rate in Q1 2024 was 6.7%, up slightly from the prior quarter — and our first read on Q2 numbers suggests the same.


Many Snohomish multifamily investors are still sitting on the sidelines. But, now may be the time to jump back in as cap rate expansion is showing signs of slowing, and rent and occupancy fundamentals remain intact.

  • Sales Insight
    Very modest sales activity still dominates Snohomish with a second consecutive quarter of only five transactions. As a result, this actually puts sales activity slightly below the same quarter last year, which saw eight transactions and 5% higher sales volume in dollar terms.
  • Rent/Vacancy Insight
    While vacancy had been rising previously, we see signs of this rise tapering off: Year-over-year, vacancy rates are down by 30 bps, on average, dropping from 6.2% to 5.9%. Alongside falling vacancy, rental rates are up 1.2% year-over-year. These positive trends should continue given the lack of new supply under construction.


Vacancy rates in Pierce County are currently elevated relative to historical norms. However, with no significant new construction in the pipeline, positive absorption should bring those elevated levels back down throughout the remainder of the year.

  • Sales Insight
    Sales continued to struggle in Pierce during the first quarter of this year with only three transactions taking place, albeit at a slightly higher dollar value. So, with limited transaction activity, investors should be cautious when trying to identify trends in data specific to this Puget Sound submarket.
  • Rent/Vacancy Insight
    Vacancy ticked up higher year-over-year and now stands at 7.3% across product types, as compared to 7.1% in the first quarter of last year. Similarly, the vacancy rate now stands more than 200 bps higher than the previous five-year average. In our view, these elevated vacancy levels won’t persist for too long as the existing supply is absorbed in the coming quarters.


Sales activity has yet to recover in Kitsap County, which limits our ability to get a read on market valuations. However, with modest rent growth and falling vacancy expected in the near term, fundamentals appear intact.

  • Sales Insight
    Kitsap saw only one transaction during the quarter for approximately $1 million: The property traded at a valuation of $175,000 per unit (or $223 per square foot), and the cap rate was not reported. Thus, it’s safe to say that it was a slow quarter in Kitsap, and we’ll have to wait for more sales activity before we have an opportunity to observe a change in overall valuations.
  • Rent/Vacancy Insight
    With the delivery of two assets during the quarter totaling 442 units, vacancy rates spiked amongst Kitsap multifamily, reversing the trend of positive absorption that the market had enjoyed throughout 2023. Notwithstanding the uptick in vacancy, rental rates continued to grow — both year-over-year and from the previous quarter. Looking forward, we expect that trend of positive absorption to continue given the limited new supply in the pipeline.

About the Dylan Simon and Jerrid Anderson apartment brokerage team
The apartment brokerage team led by Dylan Simon and Jerrid Anderson of Kidder Mathews represents apartment investors, developers, and landowners in the sale and purchase of apartment buildings and development land across the entire State of Washington. The team of 10 brokerage professionals specializes in the sale and purchasing of apartment buildings and development land from $1 million to more than $100 million. For more information, visit simonandersonteam.com.


About Kidder Mathews
Kidder Mathews is the largest independent commercial real estate firm on the West Coast, with over 900 real estate professionals and staff in 19 offices in Washington, Oregon, California, Nevada, and Arizona. Kidder Mathews offers a complete range of brokerage, appraisal, asset services, consulting, and debt & equity finance services for all property types. The firm performs $10 billion in transactions, manages 53 million square feet of space, and conducts 2,600 appraisal, consulting, and cost segregation assignments annually (3-year average). For more information, visit kidder.com.

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Simon | Anderson Multifamily Investments Team
Dylan Simon, Executive Vice President
Jerrid Anderson, Executive Vice President
Matt Laird, First Vice President
Winslow Lee, Vice President
Max Frame, Vice President
JD Fuller, Associate

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