Apartment life attracts more families scaling back

Thurston County apartment rents are up and units are hard to find, a pattern experts blame on potential home buyers being squeezed out of the housing market.

In April, Dupre + Scott Apartment Advisors of Seattle released its spring Puget Sound survey, which shows that apartment vacancy rates remained low in the county in spring 2008 compared with spring 2007.

That's a result of tougher mortgage-lending standards and homeowners' defaulting on subprime mortgages, forcing more people to live in apartments, building owners and other experts say.

"There are a certain number of people who have turned their (house) keys in," Tumwater apartment developer Ron Niemi said.

Niemi is co-developing Hearthstone Plaza, a 125-unit mixed-use development in Tumwater. Because of "pent-up demand" for apartment living, apartments at Hearthstone are renting quickly, he said.

Other factors contributing to demand are renters concerned about falling home values, those seeking a simpler lifestyle and a lack of multifamily home construction, experts say.

Kristal and Erik Hanberg of Tumwater sold their home and recently downsized into a two-bedroom, two-bathroom apartment.

A lower-maintenance lifestyle appealed to the couple, although Kristal Hanberg acknowledged that rents are much higher now than when they last lived in an apartment.

Five years ago, the Hanbergs rented a one-bedroom apartment for $650 a month. Today, they are paying about $1,200 a month for their two-bedroom apartment, Kristal Hanberg said.

The Dupre + Scott survey shows that vacancy rates for two-bedroom, two-bathroom apartments in Tumwater are a little higher than the overall vacancy rate in Tumwater at 4.2 percent, and average rent is $868.

The Hanbergs are living at Tabula Rasa, a new, 118-unit apartment complex being developed by Envizage Development Group of Puyallup, asset manager Sarah Laidler said.

The project is expected to be complete in July and has rented 20 percent of its units, she said. In Pierce County, the company's 350 units are 100 percent occupied, and prospective renters are being added to waiting lists, Laidler said.

Pierce County in April had an overall vacancy rate of 3.9 percent, according to the Dupre + Scott study.

Renters are turning to apartments because they are nervous about the housing market, she said.

South Sound home prices have fallen in recent months, according to Northwest Multiple Listing Service data.

On a year-over-year basis, single-family home prices in Thurston County fell 2.71 percent in April and 1.71 percent in March, Northwest MLS data show.

Travis Villines of Olympia, a former loan officer, said he is waiting for home prices to fall further.

"I would rather just wait until I can find a good deal on a place that I really want to live in," he said.

Villines, a commercial scuba diver, rents a duplex in Olympia, paying $695 a month. He said it wasn't difficult to find but has noticed that rents are higher.

South Puget Sound Community College student Mikaela Stine of Olympia spent three months looking for an apartment before she found one she could afford. She finally found a one-bedroom apartment for $485 a month in Olympia.

Olympic Rental Association President and CEO Tim Seth expects vacancy rates to remain low.

His association, which represents about 1,500 South Sound apartment owners, produces its own vacancy-rate survey every August. Last August, his survey showed a vacancy rate of 5 percent, but he expects that to fall to 4 percent this August, Seth said.

He advises prospective renters to be persistent in a tight market.

"Make lots of phone calls and keep filling out (rental) applications," he said. "Don't just sit and wait."

Rolf Boone is a business reporter for The Olympian. He can be reached at 360-754-5403 or rboone@theolympian.com.