Although transaction volume is low, the rental market is “beginning to show more signs of life,” according to new research from Kidder Matthews’ multi-family team, which cited increased liquidity.

The team recently released market research on the Seattle and Puget Sound apartment markets. In Seattle, during the second quarter of 2024, there were 28 apartment building transactions for a total sales volume of $735 million — substantially higher than the 21 sales worth $140 million during last year’s second quarter.

Although apartment transaction activity in Seattle is still well below historical averages, in terms of dollar amount, the first half of this year is on par with the full year in 2023. “[The market] appears to be slowly picking back up,” the report stated. “And, along with this increase in sales has come greater clarity around underlying property values as the market adjusts to a higher interest rate environment.”

At the same time, Seattle rents were fairly steady during the quarter in Q2 2024, up just 1% year over year.

Also, standard, vacancy rates among larger buildings (those with 50 units or more) were higher than for smaller buildings: 8.6% and 5.5%, respectively. However, the study noted, “As the construction pipeline continues to shrink due to higher financing and construction costs, we expect to see that vacancy delta narrow in the coming quarters.”

Looking further, to Puget Sound as a whole, team co-lead Dylan Simon said the real estate market is “showing signs of life again — and bringing more liquidity and clarity on pricing as a result.” With little new construction on the horizon, Simon said he expects sustained modest rental rate growth as new supply gets quickly absorbed.