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Housing Slowdown Expected To Send Rents Higher

POSTED: 1:54 pm PDT October 19, 2007
UPDATED: 1:55 pm PDT October 19, 2007

Odds are, they're going to hike your rent next year -- perhaps by more than you expected.

She slowdown in the Seattle housing market is beginning to impact apartment, condo and home renters, too.

For sale signs are becoming permanent fixtures in our neighborhoods. Buyers are scared. Many are now opting to rent, which means, more competition -- and higher prices for rental units.

Two houses down the street haven't sold, so Dave Goldberg decided to rent his instead.

At $1,600 a month, the rent payments will cover most of the mortgage.

"Sellers are scared. Sellers are feeling the effect of the downturn in the market -- of what everyone thought would be a continuing rise in the market," Goldberg said.

Goldberg has the right idea. Figures we obtained Friday show in the past three months, new renters have gobbled up 360,000 rental units nationwide, including several thousand in our region. Landlords can now afford to charge more.

"We are going to start seeing in the next six to twelve months. Prices will increase the demands for rentals will be greater than sales," he said.

Between 2006 and 2007, the monthly payment for both 2- and 3-bedroom units in our area was slight, just two or three percent. But the next surge could be significant.

It's tough news for cities like ours, which housing experts say is already running short on affordable housing.

"All of your key workers -- firemen, teachers, policemen -- they can't live in the city. They have to commute from farther, and farther, and farther away," said Jim Arbury.

So what's next? In 2008, the government forecasts the average 2-bedroom rental will cost $1,000 in the Seattle area. The average 3-bedroom? About $1,300.

But they say if the housing slump continues, those rents could soar significantly higher.

To check the prices of rents in other local communities go to http://www.huduser.org/datasets/50per.html. The site includes figures for 2006, 2007 -- and projected prices for next year.



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