Puget Sound Multifamily Demand Remains Strong Even as Sales Get Slashed in Half
To start the year, Puget Sound's multifamily space looks to be on solid ground; however, investment activity did suffer. In the first quarter, sales activity dropped to $883.3 million, down significantly from the almost $1.9 billion posted during the last three months of 2025, according to a market report from Colliers.
Despite the slowdown in Puget Sound, which represents the northwest part of Washington State, including Seattle, there's a more bullish lens for looking at the performance. On a year-over-year basis, sales actually improved by 21 percent, meaning growth was strong throughout the past year and the fourth quarter may have represented a pullback from the gains. Average cap rates in Puget Sound increased by 10 basis points to 5.6 percent compared with the fourth quarter.
JRK Property Holdings made the largest acquisition in the first quarter, snagging a 408-unit property in South Lake Union/Queen Anne for $130.68 million. The next two largest were Bell Partners and Bridge Investment Group, which made acquisitions of $78.5 million and $78 million, respectively.
Absorption, on the other hand, fell from 2,835 units in the first quarter of 2025 to 982 units. However, it remained positive from the year-ago levels and flipped from the -3,006 seen at the end of 2025.
Rents on a year-over-year basis were up by 1.5 percent to $2,175. The SeaTac/Burien submarket in King County stood out with its 4.9 percent growth.
Occupancy dropped by 30 basis points year-over-year to 95.1 percent.
And here's where the trends get favorable: supply is down to 1,681 units versus the 2,962 posted 12 months ago and construction is down 44 percent from the peak in the first quarter of 2023. This, along with the strong demand in Puget Sound, is expected to boost multifamily sales in the region, according to Colliers.
"Investor demand for multifamily properties remains strong as a growing regional economy and a shortage of housing has kept renter demand elevated," it said.
"As a result, expect sales volume in the Puget Sound multifamily market to pick up as the year goes on.
Source: GlobeSt/ALM