Posted 07-01-2008 10:03 am by
Bank financing is difficult to obtain in today's market, which is great news for apartment owners.
Investors and property owners often ask us how the Seattle apartment market is doing, especially when the housing market is slow. The answer is that the apartment market is doing great, and is anything but slow.
To understand this phenomenon, think about why the housing market is slow in 2008. Following the subprime mortgage collapse, banks tighten their funds dramatically and buyers have difficulty obtaining financing for their house purposes. The result is that many first-time home buyers cannot obtain a loan to buy their house anymore. Instead, they become renters.
With a flood of home buyers now becoming renters, the supply of available rental properties is limited, so rent goes up. Since apartments and multi-family properties are valued based on an income approach (especially the larger apartments), the higher the rents, the more valuable the apartment becomes.
If you own apartments in the Seattle area, you are in luck because your properties have just become a lot more valuable. The weaker the single-family housing market is, the more renters there are, and the stronger the apartment market becomes.
---Written by Oliver Wu
Oliver Wu | Advantage Commercial Brokers
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