PUGET SOUND MULTIFAMILY SALES REBOUND IN Q3 2025
After a prolonged period of hesitation among Puget Sound buyers, multifamily sales volume increased notably in Q3 2025, building on the momentum seen in Q2. The Puget Sound region recorded $1.5 billion in Q2 multifamily sales, rising to $1.8 billion in Q3. This upward trend signals that the market is regaining stability. Even with higher interest rates and buyers tightening their underwriting standards, more transactions are being completed. This increase in activity reflects a meaningful shift: capital is returning to the market, and investors are once again expressing confidence in the region’s long-term fundamentals.
Now, why does this rise in sales volume matter? The pickup in Q3 is much more than a seasonal bump; it reflects deeper shifts. Cap rates are beginning to stabilize, allowing buyers and sellers to align on value. Exchange buyers and private capital, who sat out much of early 2025, are re-engaging, and sellers who delayed listing earlier in the year are now entering the market with renewed confidence.
The Reality of Washington State's Rent-Control Rules
While Q3 delivered strong momentum, Washington State's new rent-control legislation has fundamentally changed how owners must financially plan for their future. Historically, owners had the ability to push rents more aggressively, or a buyer could bring operations to market levels relatively quickly. Under the new rent-control legislation (HB 1217), annual increases are now capped at 9.683% for 2025. Multifamily investors and commercial lenders have been forced to take a more conservative approach when assessing the risk of these properties. For multifamily property owners, this means that having rents below 10% of market rates directly correlates to a loss in property value.
To maximize the value of the property, owners must start planning their rent increases 12–36 months prior to listing the property for sale due to the rent increase notice period and annual rent increase caps. If an owner elects to sell their property with well-below market rents (+10%), they will leave money on the table. All of this can be avoided with proper planning.
How Our Team Helps Owners Succeed in This New Landscape
On the Platt-Urquhart-Douglas team at Paragon, our services and expertise go beyond just a listing. We have re-engineered our approach to brokerage with a multi-year roadmap tailored to your property, your timeline, and your investment goals. We model what your building is worth today and what it could be worth in 12–36 months with proper positioning and planning. Our team is here to help you navigate both the momentum in today’s market and the realities of new regulations so you can make the most informed, profitable decisions for your property. Give us a call if you’d like to strategize what the next 12–36 months look like for your investment property.
If you would like to know more about 1031 exchanges, want to know the market value of your investment property, or would like a referral to a tax, legal, or 1031 exchange professional, please feel free to reach out to anyone on our team: Brian Platt at Brian@ParagonREA.com (206) 251-8483, Michael Urquhart at Michael@ParagonREA.com (425) 999-6650, Ben Douglas at Ben@ParagonREA.com (206) 658-7247, or Rowan Davis at Rowan@ParagonREA.com (206) 406-9105.