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SEATTLE-A weak economy has prompted a lower demand for the area’s multifamily product. But the flat rental market has yet to deter developers, according to a recently released survey by RealFacts, the multifamily data specialists.

Apartment renters here have experienced virtually no increase in rents over the course of the past year. The survey says the average rent in September 2002 was $864. In June, the figure was $862; and in December of 2001, it was $860. That represents less than a percentage point increase in the past year, and only a 13.9% hike over the past four years. In the past quarter, RealFacts finds only the studio and two-bedroom/two-bath units showed any signs of upward movement. Occupancy changed only a fraction of a percentage point in the third quarter and now stands at 92.5%, compared to 92.3% in June.

Despite the lackluster market, additional units are still coming on line. To help lease up their luxury apartments, a group of 25 complexes has banded together to create an ad campaign promoting the appeal of living in the central city. But the slogan is more like a Band-Aid on a much bigger problem, according to RealFacts. The area economy, which has absorbed 16,000 jobless workers because of Boeing layoffs alone, has created a lower demand for the multifamily market, keeping rents flat and vacancies up.

RealFacts reports this phenomenon has discouraged institutional investors. Sales volume has dropped in the market, and when a sale does occur, the most likely buyer is a private investor. Yet many analysts still believe that the Puget Sound area, with its temperate climate, abundance of water and hydroelectric power, and its active ports, will inevitably rebound.

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