Remember conventional wisdom? You know, crazy notions like visiting the gym to strengthen one’s immune system and expressing affection via hugs and handshakes? At this point, maybe not. For months the coronavirus pandemic has upended traditional ways of thinking about nearly everything. That includes the real estate market. In Seattle, a combination of low inventory and high demand has forced home shoppers to abandon the typical terms of negotiation—inspections, who needs ’em—to win bidding wars.
This ultra-competitive climate has laid the foundation for an even more extreme inversion of home shopping norms. While houses may currently get snatched up before browsers can even 360-view the mudroom, many apartments across the city remain eminently available, so much so that concessions—mostly free months of rent—have skyrocketed recently. In July 2018, 9.1 percent of listings in the Puget Sound region offered some type of rental concession, per Zillow data. In July 2020, the most recent month studied, that number reached 37.1 percent, about 20 points higher than in February. You've always heard "buy, don't rent, if you can afford it." But given these numbers, dropping rents, and a tilted seller's market, perhaps "rent, don’t buy" should be the maxim for this pandemic moment.
Emphasis on the short term. Nobody’s suggesting that ponying up for a home won’t pay long-term dividends, nor will signing an apartment lease preclude one from stomaching hefty monthly rent checks down the road. But for nomadic types or those who’ve just grown tired of their quarantine confines, there are deals to be had across this city as society awaits a vaccine.
In West Seattle, you can nab two months of free rent by leasing a studio or one-bed in Element 42, which features a rooftop deck overlooking the Sound. At Griffis Belltown, locking in a 12-month lease will net you up to eight weeks of no rent and three months of no parking fees in a high-density swath of Seattle. Taylor 28 promotes eight weeks free, too, as well as 5 percent off rent monthly and a “30-day satisfaction guarantee” that allows tenants to terminate their leases, or move elsewhere in the development near Seattle Center, if they’re unhappy with their new spaces. And amid a bustling stretch of Capitol Hill, Infinity Apartments promotes a special liable to induce some sidewalk whiplash: free rent through the rest of 2020 upon inking a lease (restrictions apply, its website notes).
While smaller landlord operations also advertise similar enticements, the aforementioned buildings fit the mold of the luxurious, amenity-rich developments that have grown increasingly common across this city and the country. So why do they have units available? As is the case with condos, some people are avoiding larger buildings due to social distancing concerns (that social lounge doesn’t sound quite so appealing now, does it?) as well as work-from-home considerations, according to Ashley J. Hayes. The chief operating officer and managing broker of Seattle Rental Group says of renters' thinking right now: “If something happens and we’re in the same situation, I want to have more space in my actual home, and amenities just aren’t important."
Apartment inventory has thus climbed for months in a city known for its tiny pads. Rental activity was “pretty dang strong” until June, Hayes observed, but a pandemic-weakened market ultimately couldn’t absorb the standard uptick in listings during the latter part of spring. “That’s why these concessions are being offered now,” she says.
Free rent is by far the most common way landlords across the U.S. try to attract tenants, per the Zillow report. Landlords often avoid lowering the monthly rent cost, Hayes says, to keep a consistent “rent roll,” which tracks the value of the property. Property owners don’t have to adjust the line item for each unit's rent if the lease ultimately calls for the same monthly payment as usual.
This tactic, of course, shouldn’t stop apartment-seekers from factoring in those free weeks when calculating their average monthly cost over a 12-month lease (or remembering that an eviction moratorium is in place through the rest of the year). With October, November, and December off the books, this one-bedroom at Infinity Apartments, for instance, would cost $1,252 per month over a year’s time instead of $1,670.
It's located in Pike/Pine, an area of Capitol Hill that has experienced even steeper increases in rental inventory and concessions than the rest of Seattle, Bloomberg’s Noah Buhayar reported recently. Hayes has also seen the downtown core struggle. But the broker stresses that she has noticed people moving to the city, their relocations perhaps delayed by the shutdowns early on in the pandemic. Some downtown dwellers have also swapped spaces in the city's core instead of ditching the area.
Others may not readily embrace sharing hallways, elevators, and laundry rooms in a socially distanced world. But it's worth considering that a widely distributed vaccine, and "regular life," could well arrive with several months remaining on a one-year lease that begins in October. Some traditional real estate advice that you can still use? It can't hurt to look around.