With all the apartments being built, is it finally impacting Bellingham rent rates?
The surge in apartment construction in Bellingham the past few years appears to be finally putting a dent in rent prices.
The median monthly rental rate for a two-bedroom apartment in Bellingham was $1,380, down 2.1% compared to same time a year ago. That’s according to a new report from online resource Zumper, which analyzed active listings that hit the market last month. Among the 18 Western Washington cities analyzed for this report, Bellingham had the second-lowest rate for two-bedroom units, ranking behind Oak Harbor.
One-bedroom apartment units remain very much in demand in Bellingham. The median rent price for a one-bedroom unit was $1,190 a month, an 8.2% increase compared to a year ago.
Chrystal Chen, senior public relations manager at Zumper, said Bellingham had 59% more two-bedroom listings than one-bedroom listings, which might help explain the rise in one-bedroom rates.
The two-bedroom rental unit is a weak spot in a market that overall is seeing a lot of demand, said Troy Muljat of The Muljat Group. He added that fewer two-bedroom units are being built these days in favor of studio and one-bedroom units, so the newer one-bedroom units coming on the market may command a higher price.
The surge in Bellingham apartment construction isn’t expected to slow down in 2021 or 2022, Muljat said, noting that around 1,500 units are currently in the permit process. If all of those units are built, he would expect vacancy rates to rise to between 3%-5%, which is considered a normal market for renters and landlords.
“Typically we have always used a 5% vacancy rate for properties. The last several years, that number has been dropping down to almost 1%,” said Muljat, who co-owns Landmark Property Management, which manages more than 2,100 residential units.
A new report by Roofstock also indicates the market is improving for renters, at least when compared to buying a home. The report found that Bellingham has a rent-to-price ratio of 3.5%, suggesting it is a better environment to rent right now than it is for homebuyers.
The Roofstock report pegs the median monthly Bellingham rent at $1,322, while the monthly mortgage payment for a median-price home is $1,475. Even with the difference in payments, paying a mortgage also has the benefits that go with owning a home.
Across the U.S., the market clearly has a better picture for home ownership compared to renting, even if it is for a short period. The median monthly rent is $1,369 while the mortgage payment for a median price home is $854.
Why the difference?
Construction appears to impact prices, whether it is renting an apartment or buying a home. According to data from the city of Bellingham, permits to build single-family homes totaled 111 through November, well behind last year’s pace of 179.
There have been very few single-family homes available for sale throughout the year, with the monthly supply dipping below one month at times during the summer and early fall. Across all of Whatcom County, the supply for homes for sale was at 1.02 months in November, according to data from the Northwest Multiple Listing Service.
Multi-family housing construction remains very strong, with Bellingham approving permits for 533 units through November. In 2019 permits were approved for 710 multifamily units, the highest total in at least a decade.
This story was originally published December 16, 2020 at 5:00 AM.
