Only 2% of renters will buy amid Seattle’s new ‘Gold Rush’

There may not be gold in Seattle, but people sure are acting like it.

The city is growing at a rate that hasn’t been seen since the Gold Rush of the 1900s.

Seattle’s population has increased an average of 14,511 per year, Gene Balk of The Seattle Times reports. The most growth was seen during 2012-13, when about 18,000 more people scrambled into the city. Balk reports that one must go back as far as 1900-1910 in order to see a similar population boom, when about 15,000 people would flood into the area each year.

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Not even the dot-com boom or Boeing’s post-World War II success attracted as many people as Seattle is today.

So what impact does that have other than jamming the area’s already congested roadways and forcing people to stand in line at the grocery store longer? Well, for one, Seattle sure isn’t making things easy for first-time home buyers.

KIRO Radio’s Tom Kelly points out that a mere 2 percent of current renters plan to buy a home in the next year. That’s according to a new survey by Zillow, which compares Seattle’s renters to the national percentage of renters, of which 11.4 percent say they plan to buy a home in the next year. The Zillow study shows Seattle homes have appreciated 6.6 percent in one year. But despite prices being high and renters refusing to buy, Seattle’s homes are still selling like hot cakes.

Along with the skyrocketing home prices, rent is also jumping at a rate that is changing who can afford to live in the city. Some landlords are even reportedly giving tech workers &#8212 who already make good salaries &#8212 discounts on rent, because they want the people who live in their buildings to have stable incomes. The incentives have gained so much attention, that Seattle’s Office of Civil Rights has begun an investigation, while the NAACP has vocally opposed the tactic.

It’s all about supply and demand, KIRO Radio’s John Curley believes. There are areas that can’t handle the influx of people. Not surprisingly, those areas are the more desirable of Seattle’s neighborhoods.

Ballard, the University District, Capitol Hill and downtown Seattle have seen an increase in up to about 2,000 people since 2011, The Seattle Times reports. Downtown has welcomed 2,170.

But if you’re a renter trying to buy, Curley says it’s just a waiting game. Eventually, developers will overbuild and prices and demand will begin to slip back.

“It’s like a Slinky,” he said.

Just how long renters will be waiting for the market to slip back to more affordable prices is anyone’s guess, however. KIRO Radio’s Tom Tangney points out that the median home price in Seattle is just over $508,000. That is expected to increase up to 6.1 percent this year alone.

Because of the prices, every house is the battleground of a bidding war.

“Renters don’t want to get caught up in overbidding,” Tom pointed out.

There is a silver lining to all of this. High prices for homes that are selling quickly means people in the area are making more money. The downside of that is they are probably spending more money than they should.