Multifamily construction contracts in the Seattle metro area have fallen below the 10-year average for the first time in three years. The number of market-rate units currently under construction has decreased to under 20,000, down from a six-year peak of nearly 29,000 units in 2023.

As existing projects near completion, there are fewer new developments starting to replenish the inventory. In the first half of 2024, approximately 2,700 apartment units broke ground, marking a 40% decline from the same period in 2023 and representing the slowest start to a year since 2010.

New construction projects in the region are primarily focused on the core cities and suburbs, including Seattle, Redmond, Kirkland, Shoreline, and Bellevue, with nearly half of the new starts occurring in Seattle itself. While most areas have seen a slowdown in construction in 2024, Shoreline and Redmond stand out as exceptions, experiencing an increase in the number of units being built over the past year. This growth is partly due to the demand generated by the introduction of light rail service in these communities.

A reduction in construction lending and rising interest rates have led to stalled or canceled projects. Despite these challenges for current and future developments, the slowdown may alleviate some pressure on existing operators as the market absorbs the units that have been delivered in recent quarters.

This post was based on information found on  CoStar.