Low Income Housing Institute’s 57-unit August Wilson Place apartments in downtown Bellevue includes affordable housing units for households at 30, 50 and 60 percent of the area median income. Photo courtesy of Low Income Housing Institute

Low Income Housing Institute’s 57-unit August Wilson Place apartments in downtown Bellevue includes affordable housing units for households at 30, 50 and 60 percent of the area median income. Photo courtesy of Low Income Housing Institute

Economic growth continues for King County

Warning signs on horizon as housing and rent prices cool down compared to previous years.

King County has released its 2020 economic forecast, which anticipates a continued slowdown in rising rents and housing prices.

So far in 2019, employment in the county has grown at 2.3 percent, which is slower than the previous year. The construction boom continues, but signs of growth and residential real estate markets have slowed considerably beginning in the summer of 2018.

King County’s chief economist David Reich said that while the local economy remains fairly strong, there are some “yellow flags.”

“There are things that are suggesting that we might be slowing down, so those are the kinds of things we’re monitoring,” Reich said.

These are based off the index of leading indicators that are published online on the county’s website and take into account things like the number of building permits, first time unemployment claims, the purchase of durable goods and the number of help-wanted ads.

On top of this, the national indicator known as the yield curve inverted on June 30. This means that short-term U.S. Treasury bonds issued for 10 years offer better yields than 30-year bonds. It has historically been correlated with recessions, though it’s not a one-to-one indicator.

Some of this trend may be tied to the expectation that the Federal Reserve will cut interest rates, and markets are projecting two rate cuts this year and two next year.

“That’s sort of the expectation of most people at this point,” Reich said.

Locally, Reich said his office doesn’t think King County is heading into a recession as the economy has been growing. However, he said it’s unlikely to keep that pace forever and the county has built the revenue forecast with that in mind. The county has been building up reserves, Reich said, in anticipation that sales tax revenue will slow. Since the end of the recession, the county has added around 300,000 jobs.

Growth in housing prices has leveled off since the middle of 2018, with April 2019 showing no increase in housing costs year-over-year with the previous year. Rent increases have also dropped, increasing around 3 percent in April 2019, down from a high of more than 7 percent at the end of 2017.

At the same time the county’s population grew 1.6 percent in 2018-2019. Federal Way saw the most growth with a 5.7 percent increase, followed by Redmond with 2.8 percent and Seattle with 2.3 percent. Kirkland also saw a substantial increase of 1.9 percent, as did Auburn with 1.5 percent.

Reich noted that while there have been roughly 4,000 single-family home building permits issued annually in recent years, only around half of these projects are actually built, as far as they can tell. This is down from around 5,000 permits issued before the recession. Between 2005 and 2007, most of the approved homes were constructed. But since 2012, applications have greatly exceeded actual completed homes, and the ratio has been shrinking since 2013.

Annexation is also being accounted for, with the North Highline areas expected to become incorporated by 2023 into surrounding cities, the West Hill neighborhood into Renton by 2025, and the area east of Federal Way by 2025.

New construction is expected to remain on par with 2019 levels in 2020 at around $11.6 billion before it could begin to drop in subsequent years.

More in News

Wilson invites constituents to 30th District coffee hour on Oct. 21

Sen. Claire Wilson, D-Auburn, hosts a Constituent Coffee Hour from 5:30 to… Continue reading

Kiwanians present inaugural 5K Purple Sock Walk/Run on Oct. 26

The Kiwanis Club of the Valley, Auburn, presents the inaugural 5K Purple… Continue reading

Entenman to host coffee, conversation Oct. 19 in downtown Kent

State representative to be at Cafe on Fourth

Utility work to affect West Valley Highway N | UPDATES

On Wednesday, Oct. 16, and Thursday, Oct. 17, utility work by Cannon… Continue reading

King County is considering ways to increase both the supply of and demand for compost to help divert organic material from the landfill. File photo
King County wants to boost composting market

In 2018, around one-third of material sent to regional landfill could have been composted.

Bellevue is the most expensive place in the region to rent an apartment, according to a new analysis. Courtesy photo
King County cities are among most expensive to rent in Northwest

Bellevue has highest apartment rents; Renton, Kent and Federal Way all saw increases in 2019.

Motorcyclist killed on southbound SR 167 near Renton, Kent | Update

Driver in Oct. 11 crash identified as 59-year-old Grays Harbor County man

Dane Scarimbolo and Dominique Torgerson run Four Horsemen Brewery in Kent. They were almost shut down in late 2017 by King County, which after years of letting them operate a brewery and taproom, decided they were in violation of county code. Aaron Kunkler/staff photo
Proposed winery ordinance irks King County farmers, neighbors and businesses

Concerns include more traffic, higher land prices, code enforcement and compliance.

Swenson joins Highline College Board of Trustees

Gov. Jay Inslee recently appointed Sharmila Swenson to the Highline College Board… Continue reading

Most Read