Demand rises as many wait out housing market

Few vacancies push rent cost higher in Thurston County

By Rolf Boone | The Olympian • Published October 06, 2008

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South Sound apartment vacancies remain tight and rents continue to rise, according to a fall survey of the Puget Sound apartment market.

Seattle-based Dupre + Scott Apartment Advisors' October survey shows that Thurston County vacancy rates were 3.4 percent, slightly higher than the 3 percent vacancy rate in October 2007.

Average county rents, though, rose faster, climbing to $810 this fall compared with $776 last October.

Factors contributing to the tighter and more expensive apartment market include a slower residential real estate market and a lack of new construction, said Tim Seth, president of the Washington Landlord Association.

The landlord association's own survey of the county's apartment market produced a similar vacancy rate of 3.78 percent, Seth said. Of 8,400 apartments surveyed, 318 were vacant, he said.

The association's survey also showed that rents were higher, particularly for rental houses, which have jumped to an average of $1,298, compared with $1,215 a year ago, he said.

Because the housing market is slower, more higher-end houses that can't be sold are becoming rentals and pushing average rents higher, Seth said.

For an owner or developer, however, the apartment market "locally is gleaming," said Jeff Powell of Prime Locations, a Lacey real estate company that manages about 1,500 apartments in the county.

Powell noted that Thurston County's vacancy rate was lower than the overall Puget Sound vacancy rate of 4.8 percent, according to the survey.

With demand for apartments stronger here than in a Seattle market overbuilt with condominiums, condo conversions and condos becoming apartments again, Prime Locations is set to open Polo Club, a 188-unit complex off of Yelm Highway in Olympia, he said.

Polo Club opens in December and already has a list of eight prospective renters, Powell said.

Rents for its units will range from $950 to $1,325, he said. Powell acknowledged that rents are higher because of the increasing cost of construction. A yard of concrete, for example, has risen to $70 from $48 in the past decade, while asphalt costs are 50 percent to 60 percent higher, Powell said. Construction costs overall have doubled, Powell said, in part because of the recent increases in fuel prices.