Location: Tacoma, WA | Metro: Tacoma, WA HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,560 |
| 1 Bedroom | $1,760 |
| 2 Bedrooms | $2,160 |
| 3 Bedrooms | $2,980 |
| 4 Bedrooms | $3,370 |
| 5 Bedrooms | $3,909 |
| 6 Bedrooms | $4,378 |
| 7 Bedrooms | $4,728 |
| 8 Bedrooms | $4,964 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,160 | $424,248 | 0.51% | F |
| 3BR | $2,980 | $546,039 | 0.55% | F |
| 4BR | $3,370 | $613,746 | 0.55% | F |
| 5BR | $3,909 | $661,528 | 0.59% | F |
U.S. Census Bureau data (2024)
The real estate market in ZIP 98424, Fife, WA, presents a nuanced landscape for both landlords and small-portfolio investors. With a median home value set at $558,857, the current valuation signals a stable housing market that has yet to see significant reductions in listing prices. The percentage of listings that have been reduced and the median days on market (DOM) remain unspecified, suggesting that there is little pressure from distressed sellers and that homes are selling within a reasonable timeframe. This setup implies a market where pricing power remains largely with the seller, at least over the next 12 to 24 months.
On the rental side, the Fair Market Rent (FMR) for ZIP 98424 is projected to be $2,240 for fiscal year 2024, while the actual market rent, measured by Zillow's Observed Rental Index (ZORI), stands at $1,770. This discrepancy indicates an opportunity for landlords to potentially increase rents closer to the FMR level, assuming demand remains steady and supply does not significantly increase. The higher FMR suggests that there is room for growth in rental income, which can be beneficial for long-term hold investors looking to generate consistent cash flow.
For long-hold investors, the realistic appreciation thesis is anchored in the fundamental strength of the local economy and population trends. While specific appreciation rates are not provided, the combination of stable home values and the potential for rental rate increases suggests a scenario where property values could maintain their current levels or even appreciate slightly. However, without concrete data on economic growth, employment rates, and population changes, it would be imprudent to assert strong appreciation. Instead, the focus should be on maintaining property values and optimizing rental income to align with the FMR projections.
In summary, the current median home value, coupled with the lack of significant price reductions and a reasonable DOM, points towards a seller-friendly market. On the rental front, the gap between FMR and ZORI provides a path for increasing rental yields. Long-term investors should anticipate modest stability or slight appreciation in property values, while focusing on enhancing rental income to capture the full value of the market dynamics.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.