One of the questions new construction home buyers often ask is, "How do we know that the condo we are buying is going to be close to what is being promised, the perfectly lighted model unit, and dainty plastic diorama?"
The truth of the matter is that the display model, renderings, brochures and any advertising materials are tools for the developer to communicate a concept but they have (and will excercise) the right to make modifications during the actual construction. The best developers and marketers will not overpromise and stay very true to the spirit of the concept marketed. In terms of legal recourse, there's a wide grey area between the developer making some tweaks and serious false advertising. This kind of risk only increases the value of buying from a developer and the project's marketing firm which both have long, verifiable, and positive track records of promoting and delivering well-designed, quality product on spec, and on time.
So how good are developers at keeping their promises? When I started this blog almost two years ago, many new construction projects were already in the works. I thought it would be neat to take a look at a few examples: Mosler Lofts, Lumen and The Parc and compare their marketed concepts to the actual delivered product.
I have to say that among the three condos marketed a couple of years ago, Mosler Lofts's exterior is extremely close to what was advertised -- many people feel it looks even better than the pre-sales renderings. Its glass and brick combination has a very solid feel, almost a cross between Avenue One and Bellora condos. As for the interior, the finishes presented in the sales center are also very close. One nit: some pre-sales buyers were surprised by the large exposed metal ducts below the ceilings and unpainted concrete ceilings. (To be fair, these ducts appeared on the floor plan documentation but I've heard from a few buyers that it wasn't obvious to them when they were at the sales center.)
Lastly, Mosler Lofts was projected for June 2007 occupancy and started the move-ins in November 2007. This was partly due to a 1 month concrete strike in August 2006 and partly a bad estimate.
Up to 1.6M square feet of office space will soon be occupied by Amazon employees in South Lake Union. Some of them gotta want to live in nice condos nearby; e.g., 2200 Westlake, Veer Lofts, Rollin, and Enso?
To all the SCR readers, I just wanted to wish you a Merry Christmas and Happy New Year!
Despite all the sub-prime mortgage and bubble talk, it's been a solid 2007 for those who bought a few years ago and a great time to buy for those who took the plunge the last few months.
For all the buyers still in the market, may you find a wonderful condo at a great price that you can enjoy for many years. For all the sellers, may you find a great buyer and make some nice capital gains ;-)
It's time for the December 2007 SCR market update. So how did the November numbers look? Bears will be reassured to see closed sales dropped by ~16% in November 2007 compared to October 2007; nevertheless, this is not completely unexpected due to seasonal effects from Thanksgiving and Christmas. However, comparing November 2006 and November 2007, we find that year over year sales increased by 15.25%. Median closed prices for November showed 2.53% growth versus same time last year. In short, these indicators show a normal seasonal slowdown and prices stable in most neighborhoods.
One interesting observation is that in the fall of 2006, buyers were concerned about a potential housing bubble. They decided to sit out of the market in November/December. By late January, we saw a surge in sales and pricing strength as nervous buyers realized the bargains were not to be had and all came back at the same time. This time around, the sub-prime mortgage news has created the same wait and see market sentiment for homebuyers. Will history repeat itself and will everyone come back into the market at the same time? It is quite possbile that we will see another surge in buying activity after the new year. Anecdotally, I personally have started hearing from a lot more buyers in November than I did in October.
With the low interest rates and high inventory, this month presents a great opportunity for homebuyers who are ready to pull the trigger. Most sellers will be very flexible and motivated to have a contract signed before the new year. Here are a couple of incentives that I have come across. Come next year, if deferred buyers decide to re-enter the market, the power will start to shift once again.
1.) Price reduction
2.) 2/1 buy down loan program- Seller paying down buyer's interest rate which help home buyers to reduce their monthly payment for the first 2 years
3.) Credit at closing- for appliances, homeowner dues and closing costs
4.) Finishes upgrades- New construction and conversion
Madison Lofts, a low-profile condo project, is moving along nicely with its construction. I snapped the picture above this week. Prices for these homes are going to be available in January 2008 with sales likely to start in February 2008. The exterior is designed using concrete, steel, metal and brick, a rare low-rise mixed-use building in the Madison Park neighborhood.
One of the new construction projects completing this year is the occasionally overlooked 5th and Madison project in downtown Seattle. If you are a big fan of city views and love Manhattan style high-rise living in a more business-like area of downtown, this may be a project worth checking out.
Here are some of my observations:
1.) Unlike most projects focusing a lot of their efforts on indoor amenities and charging a lot more on their homeowner dues, one of 5th and Madison's most unique selling points is the outdoor plaza. The water features and greenery on the south side of the building create an interesting in-city green space for residents.
2.) The exterior architectural design is sleek and simple with generous floor-to-ceilings windows for all their floor plans, especially their 04 floor plans which feature expansive views of the city. However, the trade off would be you might get some traffic noise coming from I5.
3.) The most popular floor plan is the one bedroom plus den 01 layout (on higher floors) which gets partial water views and mostly city views. Great amount of sunlight for these units but the only minor drawback is the odd shaped balcony that doesn't seem to be too functional.
Overall, the building feels very well constructed and probably deserves more buyer consideration than it has received thus far.
One of the risks of buying a view condo, especially in the downtown area, is you never know what projects could come up around your building. Even after you or your Realtor does due diligence to research the neighboring lots, there is always a chance that a taller building might be constructed right next to you and block your views, sunlight, and mojo. If you are buying in the densest downtown zone, there is no required separation between your tower and your new neighbors. This can be an unpleasant surprise for many homeowners; just ask some of the residents of the Cosmopolitan. Read more.
Marco Kronen is the co-author and a condo Realtor. He and Wendy have worked together serving clients in Seattle since 2007. Feel free to contact Marco here.
Wendy Leung is the founding editor of the Seattle Condo Review. She's also a full-service Seattle realtor.
Seattle Condo Review is the Seattle's longest-running guide for buying and selling Belltown Condos, Queen Anne Condos, Capitol Hill Condos, Green Lake Condos, Ballard Condos, and Downtown Seattle Condos.