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

Suspect with violent history killed by officers outside Enumclaw

It’s unclear why Anthony Chilcott was not being held after a late October arrest for resisting arrest and damaging a patrol car before this most recent incident, which resulted in his death.

Father charged with assault after giving step daughter chloroform

Though initially put on life support, the girl has recovered enough to talk to police.

Washington Low Income Housing Alliance is among supporters of statewide “just cause” legislation to protect tenants in Washington. However, some landlords say removing the ability to quickly remove tenants limits their ability to get rid of problem renters. (Courtesy image)
Tenant advocates prepare for another push in Olympia

Following wins in Burien and Federal Way, just cause evictions are on the 2020 Legislative agenda.

EHS students travel to Nevada for rangeland contest

This was the first time the Hornets participated in the Western National Rangeland competition.

Enumclaw budget again includes variety of ‘outside agency’ funding

The Rainier Foothills Wellness Foundation, Plateau Outreach Ministries, and the Enumclaw Plateau Farmers Market were some of this year’s recipients.

Black Diamond police blotter | Nov. 18 – 24

A juvenile with a knife and trespassers.

Mountain View Fire moves to end contract with Black Diamond

Three years remain on the current contract, but this move highlights the financial tensions between the city and fire department.

Fire along Twisp River Road in the Okanogan Wenatchee National Forest in 2018. Courtesy photo
Wildfire response: State unveils funding legislation proposal

Last year, Department of Natural Resources responded to record number of wildfires.

A new report, complete with recommendations to the Legislature, has been released by a statewide task force that was formed to address a lack of child care in Washington. File photo
Report outlines lack of child care in Washington

In King County, supply doesn’t meet demand for child care.

Most Read