Rental Housing Outlook and the Shape of Things to Come- Industry Panel report-out

Our owner and Designated Broker, Ricky, recently attended a housing outlook industry panel hosted by Marcus and Millichap, a national commercial property research and advisory firm; “Rental Housing Outlook and the Shape of Things to Come”.  The panel was aimed around the pandemic impacts on housing and economic trends - a topic we know is of high interest right now, and below are some of the notes we’re sharing with our property owner clients and blog followers. 

If you’re interested in a copy of the full presentation, please let us know by email to office@rd-house.com

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Some of the most immediate impacts have been logistical challenges for unit showings and leasing, given state business lockdowns and social distancing restrictions.  In Washington, Real Estate was fully locked down until counties started moving to Modified Phase I and Phase II restrictions, and RD House is now doing modified unit showings which include virtual tours, pre-qualification for showings, and a focus on social distancing at on-site showings.

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S       Statewide eviction restrictions are in place across the country, including Washington state.  These add some risk to rental property owners, however RD House has not had any missed or late rent issues to date within our portfolio.  We have been working closely with tenants to assess any expected rent disruptions due to COVID 19 economic impacts, and will continue to monitor this going forward.  Should we become aware of any issues, we have a number of options we can work through with tenants.

         Nationally, housing construction has fallen short of demand, which may position specific regions for tighter inventories and upward rent pressures.  Some national vacancy forecasts range from 4.4%-5.8% in the second half of the year; in Seattle, rental unit construction over the past 18 months has continued to add thousands of units to the market, and we’ve seen some softening of rents as a result.  Construction holds since March may introduce some fluctuations to this in the months ahead.  With targeted marketing and a high focus on tenant services, RD House has maintained about a 3.5% vacancy rate on average across our portfolio.

·          Also nationally, the housing outlook varies with the length of lockdowns and the pace of economic recovery, which have both seen dramatic changes since mid-June.  This remains very much a watch and evaluate situation for markets across the country.

2020 Best in Business award for Property Management!

RD House Real Estate and Property Management is honored to receive the 2020 Best in Business award for Property Management by the Seattle Small Business Award Program! 

Annual awards for each category recognize outstanding local businesses throughout the Seattle area for their leadership in service to their customers and our community. These exceptional companies help make the Seattle area a great place to live, work and play!

We’re gratified to be recognized for what has always been the simple mission of our business:

Be nimble.  Provide full service professional property management to navigate the complexity of Seattle's rental landscape for our property owner and investor clients, and do it really well with online and mobile-enabled tenant and owner services  to provide simplified leasing, rent payment, account management and service delivery for tenants and owners.

Be great at what matters most-  sourcing and keeping great tenants, effective property operations and owner satisfaction.  This means advertising and marketing based on solid local market expertise, corporate relocation relationships, internet campaigns covering all popular rental sites, social media and video.  The result?  Our average days on market has consistently beat the local market average, as have our tenant retention and owner satisfaction.

Be your expert resource.  Seattle rental registration and inspections (RRIO) , local and state Landlord Tenant laws and Fair Housing compliance, Washington state security deposit trust accounting  – we’re geeks for this stuff. 

On behalf of our clients and tenants, thank you!

Geekwire: Seattle poised for big startup growth

Oren Etzioni and Jacob Colker of the Allen Institute for Artificial Intelligence (AI2) think that Seattle has  reached a tipping point for our startup ecosystem.  

The Seattle area is home to several of the world’s most iconic companies including Amazon, Boeing, Microsoft, and Starbucks, and has had nine $1 billion-plus startup companies created over the last 10 years, and there are more than 130 engineering centers that have opened in Seattle, which can seed new startups- companies like Adobe, Airbnb, Alibaba, ARM, Baidu, Cisco, Dropbox, eBay, Facebook, Google, HBO, Honeywell, HP, HTC, Hulu, Intel, JPMorgan Chase, Lyft, McGraw-Hill, Mercedes-Benz, Mitsubishi, Motorola, New Relic, Novo Nordisk, NVIDIA, Oracle, Palantir, Pinterest, Salesforce, SAP, ServiceNow, Snapchat, SpaceX, Square, Stripe, Tencent, Ticketmaster, Twitter, Uber, VMware, Walt Disney, and more.

Their analysis examines leading indicators that point to an unprecedented acceleration in high-tech startup creation over the next few years, including a critical mass of talent, world-class STEM education, increasing early stage venture capital, and maturing company-building support.

https://www.geekwire.com/2019/analysis-seattle-startup-ecosystem-poised-unprecedented-acceleration-company-creation/

Exciting improvements coming to your Resident Portal on April 6!

Coming on April 6: Our newly designed Tenant Portal- we hope our tenants will love it! 

Check out a demo here

And more!

2019 Changes to RRIO (Seattle Rental Registration and Inspection Ordinance) Fees

The Seattle City Council approved changes to RRIO fees that take effect on January 1, 2019. 

Change from 5 year renewal cycle to 2 year renewal cycle

Nothing will change for existing registrations. When existing registrations are renewed after five years, they will be converted to the two-year cycle.

The new two-year registration/renewal fee is $70 for a single-family/single-unit rental and $15 for each additional unit (was $175 1st unit + $2/additional units every 5 years). 

5 year cycle cost changes will be:

                  Current (through 2018) fees

                   Single family prop  |  Duplex   |   8 plex

        Year 1          $175                  $177          $182

        Year 3            ---                       ---              ---

        Year 5            ---                       ---              ---

       TOTAL          $175                  $177          $182

                   Beginning 2019                        

                   Single family prop  |  Duplex   |   8 plex

         Year 1        $70                      $85            $175

         Year 3        $70                      $85            $175

         Year 5        $70                      $85            $175

         TOTAL       $210                    $255         $525

Two new fees have also been added:

• A $30 late fee for inspections that are not completed by the inspection due date. This is to cover the additional administrative costs from late inspections. 
• A $40 fee for processing inspection results submitted by private qualified rental housing inspectors. This fee is in addition to whatever fee the private inspector charges.

Finally, to keep up with increased labor and administrative costs, two other fees have changed:

• Late registration fees have increased from $20 to $30. 
• The fee for hiring a City inspector has increased from $160 to $175 for a single-family/single-unit property. Each additional unit that must be inspected will cost $35. We generally require 20 percent of units on a multifamily property to be inspected.

See the table below for a summary of the 2019 RRIO fees passed by Seattle City Council.
 

Fee		Approved by Seattle City Council – Effective 1/1/2019
Registration / Renewal	Property	$70	every 2 years
	Additional Units	$15
Late Registration/ Renewal		$30	if late
City inspection	Property	$175	once every 5-10 years
	Additional Units	$35
or
Private Inspection Submittal Fee (new fee)		$40
Late Inspection (new fee)		$30	if inspection is late

RD House is very familiar and experienced with this program, and can handle client registrations and inspections on your behalf.

Apple to top 1,000 employees in Seattle, add new site in city as part of broader national expansion

Apple will expand its Seattle operations to more than 1,000 employees and establish a new site in the city, moving further into the backyards of hometown tech titans Microsoft and Amazon, and escalating the competition for tech talent in the region.



See the full Geekwire article here

Whats New? Improvements to itemized statement transactions

Based on client feedback around monthly reporting, we’ve worked with our software vendor to make a frequently requested improvement!  Our client Owner Statements now have a more detailed notation for itemized transactions (work done, vendor and invoice#) in the Transaction Details memo field.   These appear in all online owner portal reporting and all emailed statements.  As always, the original bills are posted to Owner Portals under Rental Owner/Documents for full reference.

Did you know? Automatic appliance service and warranty tracking

As a standard property management practice, when a new appliance is installed, RD House records the appliance, model, install date and serial number, so if there is repair or warranty work at a later date, all of this is easily accessible.  Our property owners can also view this information right on their Owner Portal, in the Rentals/Properties view, under the “Appliances” heading.

Seattle scores # 2 in Tech Talent demographics

It’s no secret these days that Seattle is filling with tech workers and the companies that are headquartered or opening hubs here.  But a recent Geekwire article digs into the details of the CBRE annual Scoring Tech Talent report, which ranks the top 50 markets based on 13 metrics like number of tech employees, population trends, wages, education levels, housing and business costs. 

Seattle led the way in terms of the highest percentage of people with a college degree — 63 percent — as well as the greatest population growth of 20 somethings since 2011 at close to 23 percent.  According to the report,  Seattle is the second strongest tech market in the U.S. and Canada, thanks to its growing population of young, brainy geeks, according to a new study.  The city trailed only San Francisco in the overall rankings and finished ahead of Washington, D.C., Toronto and New York to round out the top five.

The numbers show that a lot of this influx is coming from elsewhere as the number of new jobs outpace graduates from the region’s universities; Seattle is fourth among markets in terms of “brain gain,” meaning tech workers are arriving than the city loses each year.

Both homegrown companies like Amazon and Microsoft and big out-of-town companies like Facebook and Google are driving the trend. The report also gives a window into how much the more than 100 companies that have set up satellite offices in Seattle are paying. While Seattle struggles with high housing and business costs, it is actually a cheaper place to live and do business than some of its peer cities at the top tier of the market.

See the full Geekwire piece here.

Zillow report: Seattle rental market weakness continuing

We’ve all seen the sea of cranes across Seattle for the past few years, and all that building is now turning into new units coming on the market rapidly.  We scoured Zillows most recent Rent Index Report which confirms that Seattle's rental market shows continued signs of weakness due to the glut of new units in urban core areas.  

How much of a glut?  The first 6 months of this year saw 24,554 apartment units under construction and an additional 35,009 units in the development pipeline.

As a result of this huge influx of supply, rents in the Seattle metro area increased by just 3.3 percent from May 2017 to May 2018, down from 5.8 percent the year before, and so much competition means that existing units and those without newer amenities are seeing price pressure and taking longer to rent.

How does this supply and demand work? When supply (units available) increases more than demand (renters looking for units to rent) market prices fall until supply is fulfilled.

Rent appreciation is still strong in outlying areas, with four of the five fastest-appreciating rental neighborhoods in Tacoma, and the fifth in Everett between the Boeing plant and Everett Mall.   These areas are seeing continued demand for lower-cost apartments and have supply has been much more constrained than urban core neighborhoods where the bulk of new apartments have been built.  

Zillow's data backs up other reports showing the Seattle rental market softening, several of which show rent growth for single-family homes slowing to less than 1 percent for the first time since 2012.

Apartment markets in other pricey metros like Boston, Los Angeles and Portland also weakened- the Portland metro area rents grew just 1.5 percent year over year, down from 3.6 percent in May 2017.