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

Car plows into pool building at Federal Way apartment complex

Woman accidentally hits the gas instead of the brake and accelerates into the pool building, causing major damage.

Federal Way tax preparer sentenced to 1 year in false tax returns scheme

Defendant’s clients were primarily immigrants with little knowledge of the tax system and limited language skills.

Federal Way Council candidate declines Democrats’ endorsement after they censured her

Sharry Edwards to move forward as an independent after her questionable behavior, stance on drug use led to divide with Democrats.

Back to school drive set for Saturday at Federal Way High School

In addition to the backpack and clothing giveaway, beautician school volunteers, homeless and housing assistance resources, various labor unions will host workshops and more.

Woman faces vehicular homicide charges after female dies in DUI crash on I-5

An 18-year-old woman was arrested in connection with the crash after one person died and another was seriously injured.

$1M worth of cocaine found in banana boxes at Western Washington Safeway stores

The drugs were discovered on Sunday at the South 320th Street Federal Way grocery store location.

Prosecutors: Federal Way teen who fatally stabbed mother’s boyfriend will not be charged

16-year-old girl acted in self-defense during an argument over cooking breakfast, according to police investigation.

King County awards $1.5M to South King County Senior Centers and Resources to help serve diverse population

Twenty-eight senior centers will form 14 hubs for targeted senior services around the region.

Building community out of Legos at Federal Way’s Movies in the Park

Community gathers at Town Square Park for showing of “The Lego Movie 2: The Second Part.”

Most Read