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.


Talk to us

Please share your story tips by emailing editor@rentonreporter.com.

To share your opinion for publication, submit a letter through our website https://www.rentonreporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 300 words or less.

More in News

Virtual town halls coming up for unincorporated King County

Events throughout September and October via Zoom will cater to different areas of the region.

A vacant building that went up in flames Aug. 27 at the corner of Pacific Highway S. and S. 279th St. in Federal Way. Fire investigators declared the blaze to be an arson. Photo courtesy of South King Fire Commissioner Bill Fuller
Renton man possibly connected to Federal Way arsons

Officers found several lighters and butane fuel in his possession while arresting the man on Aug. 28.

Stock photo
Renton woman pleads guilty to purchasing firearms for ‘violent street gangs’

According to case records, a 41-year-old Renton woman provided the guns to her son, who modified them and sold them to gang members

Seven decades later, the search for two missing Navy pilots continues

The pilots are thought to have disappeared near Black Lake, northeast of North Bend.

A view of the Palmer Fire, located seven miles southwest of Oroville in north central Washington. Source: InciWeb
Antifa isn’t starting Washington wildfires

Online conspiracy theories are spreading as the West Coast burns.

Courtesy King County Metro.
Metro bus route changes in Renton coming Sept. 19

As part of a plan to increase mobility between several South King County cities, Metro has added a new route and increased the frequency of other routes.

The truck of the Renton family as it was found Tuesday. While fleeing the Cold Springs Fire two adults were severely burned and one toddler died. Courtesy photo/Okanogan Sheriff’s Office
Toddler killed as Renton family flees Cold Springs Fire

The parents were severely burned and are being treated at Harborview Medical Center

A plane drops fire retardant on the Palmer Mountain Fire last week. The fire is listed as 84 percent contained, and fully lined. Laura Knowlton/Sound Publishing staff photo
Threat multiplier: How climate change, coronavirus and weather are scorching WA

Dry summer conspired with the pandemic and a wind storm.

Screenshot from the state Employment Security Department’s website at esd.wa.gov.
Workers may qualify for an extra $1,500 in unemployment back pay

A federal program will give some of the state’s unemployed a $300 weekly bump for the past five weeks.

I-5 closures near Federal Way this week for Sound Transit construction

Two lanes of I-5 will be closed overnight Sept. 9 and 10.

Screenshot of the air quality monitor at 11 a.m., Tuesday, Sept. 8. Courtesy Puget Sound Clean Air Agency.
King County faces unhealthy air quality due to wildfire smoke

Weather monitors recommend people limit time outdoors, especially children, seniors and those with heart or lung disease.