Market Breakdown - Olympia, Washington offers a great quality of life and there are some elements that make it especially appealing for landlords.
What a year it has been as a landlord! Moratoriums, population shifts, massive job market fluctuations, the list goes on. Although the turmoil has been very real, Olympia still remains a great place to own a rental property. In fact, Olympia has seen the largest increase in rents across the entire Seattle Metropolitan area (source: Zumper). Rents have grown 25% YOY from May 2020 to May 2021.
There are many reasons why Olympia is a fantastic place to own a rental property. In this article we’re going to look at the macroeconomic factors driving the rental market in Olympia. Keep in mind each neighborhood (and even each street) will vary and have it’s own microeconomy.
A 1-bedroom apartment in Olympia is now renting for $1,400 per month - this compares to a median of $1,339 across Washington state. The median 2-bedroom rent is $1,690 in Olympia.
The average home value in Olympia is about $444,000, according to Zillow, which is an increase of 19.9% YOY. While that is a phenomenal increase (and hindsight is 20/20), $444,000 is a pretty good entry point when you look at prices across the Puget Sound region:
Seattle average home value: ~$831,000
Bellevue average home value: ~$1,144,000
Kirkland average home value: ~$932,000
Lynnwood average home value: ~$631,000
Past performance is by no means a guarantee of future appreciation, but the increase in rents and home value does indicate demand for Olympia real estate. And it makes sense considering these factors:
Joint Base Lewis-McChord sits just a few miles away (providing a steady flow of new residents)
The Washington state government employs thousands in Olympia (strong job security for these tenants)
The population of Olympia has increased from 47,700 to 53,600 over the last 10 years (12.4% growth)
In general, people are moving to the state of Washington (almost a 15% population increase over the last 10 years according to the US Census Bureau)
Household income has also climbed recently in Olympia. The American Community Survey conducted by the US Census Bureau in 2020 reported a median household income in Olympia of over $78,000 - an increase of about 12% over the previous 3 years. This is strong growth and an indication of a financially stable tenant population.
Another major factor we are seeing nationally is population shifts from large cities to smaller, more rural areas. This bodes well for a city like Olympia which sits on the doorstep of the Olympic Peninsula as well as the Seattle Metropolitan area. A question mark moving forward will be whether employers start requiring workers to come back to the office once the COVID-19 pandemic is under control.
On that note, it’s important as a landlord to remain up to speed with all things pandemic and moratoriums. A great resource for the latest is the Rental Housing Association of Washington - check out their COVID-19 page here.
Contact us if you’d like to discuss the services we provide landlords in the Olympia area - happy landlording!
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