SEATTLE – The city of Seattle is experiencing a housing shortage and some homeowners are starting to feel it.
The number of people who are renting or looking for a rental home in the Seattle metro area has reached an all-time high of 5,000 units, a milestone surpassed in July.
“It’s the first time in my life I’ve seen that number,” said John Tapp, a senior vice president with the realty company Listed Real Estate.
This is unprecedented.
There are no shortage of homes in the metro area, according to Listed’s Tom Hagerty.
Seattle has the second-highest percentage of all U.S. cities with a housing market that is below what’s needed to support the population, according an analysis by the realtors association.
Hagerty says the Seattle market is on the verge of breaking through another barrier, that of people renting and looking for housing.
Many of those new homes are for people who already have homes.
Some of the new owners who have rented out their properties say they want to move into more affordable neighborhoods where they can build a home with lower monthly payments and the ability to afford a smaller mortgage.
“It does have a ripple effect on the entire market,” said Mark Shanks, chief executive officer of Hagery Properties.
Hagery has been selling its properties in Seattle for nearly a decade, but recently saw a surge in demand after the Seattle Police Department announced that it was looking for the missing officer who was killed in the line of duty.
A police investigation revealed that a black woman, identified as 28-year-old Jourdan, was fatally shot on Oct. 28.
Jourdan’s family has been trying to buy the home they have in a rental community near Bellevue, but they are now seeking more affordable homes nearby.
In response, Hagerys is selling its property to the company that manages the real property, which is expected to close on Nov. 7.
It has taken more than two years for the Seattle housing market to reach this level, according Tapp.
But the shortage is only going to get worse.
The Seattle Department of Housing and Community Development has projected the number of units available for sale in the city will decline by 6.5% by the end of next year, to 1,942,000.
The number of new homes that will be available for purchase has already dropped by nearly a third, to 818,000, according the department.
People who want to buy their homes need to apply for a new mortgage, but the current one is only a 6% down payment, and is only good for 30 years, said Tom Cappelli, a real estate agent with Seattle-based Cappeli Real Estate and a co-author of the report.
“The reality is, people who don’t have a down payment are going to have to take on additional debt,” he said.
Cappelli said some homeowners have already begun to ask for more money in exchange for renting their homes.
“People are starting with the money and asking for more and more, and the more they ask for the more the price goes up,” he told ABC News.
Another challenge that the city of Tacoma, Washington, is facing is that many of its residents are not even able to pay rent on time.
While the Seattle economy has grown, many residents are struggling to keep up with monthly expenses, according and the Seattle Times.
Tacoma’s housing affordability crisis has been chronicled in the popular movie, “Home,” which has been nominated for five Academy Awards.
On Oct. 23, the realtor group Listed released a report estimating that the number and percentage of people living in rental housing is at its highest level since 1999, the year the housing market was under pressure, according ABC News’ Julie Smith.
That report said that by 2035, there will be 1.7 million people in rental-only housing, compared to 1.1 million in “traditional” housing.
“If people were going to start to build in a market where it was a little bit less affordable, I think that would help,” Tapp said.