When it comes to investment sales, can Puget Sound multifamilymaintain its mojo? Marcus & Millichap senior associate Tim McKay, with the firm's National Multi Housing Group, gives us three reasons why it will.
1) People Vote for Seattle With Their Feet
Net migration into Washington from other states was around 50,000 people in 2012, Tim tells us, and the Puget Sound region was the biggest benefactor.The pull of the region is strong enough for people to move here with or without a job because they believe they'll find a better place to live. Such a movement drives demand for apartments. Above: Tim (right) and colleague Dan Chhan.
2) Jobs, Good Jobs
Seattle isnt just a good place to find a job, its a good place to find a high-paying job. Forbesranked Washington as the No. 1 state in the country to make a living, using factors like workplace conditions, cost of living, income taxes (state levy = zero) and unemployment rates.Washington is one of only eight states to have an average wage over $50k per year, but the cost of living is only 2.5% higher than the national average. Pictured: the 41-unit Elliott Bayview at 151 John St in Seattle; Tim and Dan repped the buyer and co-repped the seller in its recent $14.6M sale.
3) Low, Low Rates
When interest rates begin to increase, cap rates will have no choice to increase, Tim says. If this is still two or three years off, however, we strongly believe that the Seattle area will continue to sustain current demand and pricing levels, similar to that of Elliott Bayview. He adds that with increasing demand for real estate and little to no supply, investors both large and small will continue to push the envelope in terms of how much return one is comfortable taking in order to invest.
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