Windermere Professional Partners

COVID-19: How is it Affect­ing the Pierce Coun­ty Mul­ti-Fam­i­ly Market?

Anders Ibsen Professional Headshot of Anders Ibsen November 24, 2020

As many investors know, COVID-19 threw a giant wrench into the market. But how is this affecting the numbers… and is this the right time to buy? Or are investors better off waiting?

First, the historical trends. In the first quarter of 2020, Pierce County multi-family saw a nearly 12% drop in median sale prices, before rebounding to historical prices within recent months. This can be explained as predictable consequences from the initial job losses, “shelter in place” order, and related COVID landlord-tenant regulations that restrict rent increases, late fees, and most evictions.

*Credit to Theory Real Estate for photo above.

However, multi-family is not in a freefall in the slightest. In fact, accelerating price trends for Pierce County 2-4 unit properties aren’t simply on the horizon: They’re here now.

Here are a few important data points to know about:


  • As of November 2020, here are the median list prices for Pierce County multi-family:

    Duplex = $499,950

    Triplex = $624,950

    Fourplex = $965,000


  • In Pierce County at the very end of October, there were 29 active multi-family properties listings compared to 30 pending listings. This means that the average multi-family property in our area has a 103% chance of selling.
  • There are only 2.5 months of multi-family supply on the market, which indicates a shortage. The average 2-4 unit property is only on the market in Pierce County for 10 days before receiving an offer.
  • Multiple offer situations are becoming increasingly common for multi-unit properties. Investors are willing to stomach cap rates of even less than 5% in anticipation of accelerating rents.
  • Rents in Tacoma have increased approximately 5.5% in the past year. This is a comparatively modest increase compared to past years due to COVID-19-related economic disruption. However, rents have rebounded to their pre-pandemic level, and are expected to exceed this amount - especially with the eventual expiration of the freeze on rent increases.

  • Interest rates are rapidly decreasing for multi-family as well. According to Jennifer Pacheco from Penrith Home Loans, "Interest rates for Tacoma multi-family properties are historically low. Even a $750,000 fourplex could potentially get as low as a 3.5% rate for a 30 year fixed conventional mortgage. It’s even lower for FHA or VA."

There are also major factors that are contributing to an increase in demand:

  • Millions of people continue to move to the Pacific Northwest. This is both due to economic opportunity in Western Washington, as well as our comparative affordability to more expensive housing markets like California’s.

  • Tacoma's market remains significantly more affordable compared to King County. For example, there is still a nearly $600 difference between the average monthly rent for a Seattle 2 bedroom apartment ($2,100) and a Tacoma 2 bedroom apartment ($1,500).
  • As working from home becomes more prevalent, more people will see the appeal of living in comparatively affordable markets while also avoiding a lengthy I-5 commute. This will have the effect of driving up demand (and rent) in our area even more.

  • Rental supply in Tacoma is still a long way from meeting demand. There is less than a 4% vacancy rate in our market according to HUD.


    In summary, the Tacoma multi-family real estate market took a short pause due to the pandemic, but it is poised to jump to even greater heights in 2021. Waiting for the market to “crash” is not realistic, as the area market is going to be a shortage-driven seller’s market for some time. Those gains in property values are not inflated; they are backed up by real buying power, and future cash flow has significantly more room to grow. Moreover, there is no guarantee interest rates will remain this historically low for long. If your intent is to enter the Pierce County market: get your foot in the door while you can.

REALTOR® Anders Ibsen specializes in helping his clients buy and sell multi-family investment properties in the Tacoma area. You can contact Anders at andersibsen@windermere.com and give him a call/text at (253) 370-0201.