Seattle Rent Increases, and other stuff

On my way to a vacation in Kauai, with an unexpected overnight layover in San Francisco. Traveling always allows me to catch up on my reading, so here are a few things that tickled my fancy from Sunday's Seattle Times:

Apartment rents rose an average of 5.5% in the Seattle metro area in 2013, according to Dallas-based MPF Research. This makes it one of the best markets for landlords, the sixth largest rental increase in the nation. The average one-bedroom rent in King, Pierce and Snohomish Counties was $1051; $1255 for a two-bedroom.

In the Seattle metro area, Everett led the hikes with an average 8 percent rent increase, with South Seattle following with an average rent increase of 7.1%. This bodes very well for the artist live/work multifamily project that my company Van Gogh Development Corporation is proposing to do on South Henderson Street near the Rainier Beach Light Rail Station.

Meanwhile the economic recovery is clouded by the decline in labor force participation. While unemployment has allegedly dropped, the number of people looking for work has also decreased. The civilian labor force participation rate dropped to 62.8 percent of the available US work force in December, the lowest rate in 35 years. Even Washington's rate at  63.2 percent was below the 70% rates in 1998 - 1999.

Another article on the legacy of former Federal Reserve Chairman Ben Bernanke reported that during his tenure, the Fed's holdings swelled to above $3trillion through "quantitative easing" of roughly $85 billion per month in bond purchases. Basically, this is an increase in the money supply that has propped up the stock market at artificially - and unsustainably - high levels. There was both praise and condemnation for Bernanke's efforts.  Said Robert Reich, former Labor secretary and now professor at UC Berkeley," I salute Bernanke and the rest of the Fed in understanding their obligations to try to reduce unemployment as best they can....On the other hand, I think history will show the Fed's policy fueled widening inequality for the single reason that most average people didn't have access to low-interest loans."

And speaking of easy money, I have also been dismayed by the terms of the Dodd-Frank Act (which took effect January 10, 2014) on Seller Financing, that make it even more difficult for the average person to buy a house. More on that in the next blog. Until then,

Happy Investing!