Looks like developers and buyers are warming up to this whole auction thing. Thirty six units will be auctioned off on December 5th from the Avaview in Crown Hill, Sunrise on the Lake in Broadview, and The Summit on Capitol Hill.
Remember when all of us condo lovers were wondering which building would make the best investment back in 2006. You remember 2006, right? When new condo projects were getting announced so often a few of us decided to write an entire blog about them ;-)
Well, I was curious which resale condos faired the best through the recent recession. Certainly, there were plenty of SCR readers who were convinced all the 2006 prices vastly exceeded their future values and probably just as many who were convinced certain buildings would always be in high demand.
This afternoon, I pulled all the 1BR sales from 9/1/06-9/1/07 and 9/1/08-9/1/09. I was actually doing a much more in depth analysis for one of my clients but they were ok with me sharing a slice of it for SCR readers since they've been readers themselves for some time now.
Below is one of the resulting analyses. The takeaway? Concord and Klee investors were kept the most whole through the dark times.
In a previous SCR poll, 66% of readers found the bulk buying process a bit complicated. Perhaps sensing the confusion as well, the folks behind the bulk buying program are now offering a series of events and even a video explaining how this works.
Furthermore, here's the explanation I got from the marketing firm in response to some of my own skepticism as well as reader sentiment:
So far, they have listed the nine remaining homes at The Decatur (21 released total) in the NWMLS (twelve of them have been reserved to date with three back up positions for a total of fifteen reservations.)
Eighty percent of professional economists have declared the recession over and most predict the economy will grow 3% for each of the next 2 years :-) Of course, real estate prices don't necessarily snap with GDP predictions but let's hope they're positively correlated.
So how did Seattle condos fare in September 2009? The answer is, like most recent months, mixed. The good news is that for the first time all year long, pending sales saw a double digit jump versus the same month in 2008. Specifically, there were 251 pending sales in September 2009 versus 224 in September 2008 (a 12% jump). For context, year over year pending sales were up 1.5% last month and were negative 40% in March.
Eleven Eleven East Pike is ready to sell and they're not gonna take it anymore. In a new press release, the folks at Eleven Eleven were none too pleased about the downward pricing pressure of recent auctions, citing Brix's reduction of prices by 30% and frustrations that bank appraisers will use previous comp auction sales to value Eleven Eleven.
In response, the developer will be offering "bulk pricing" where the pricing will vary depending on how many people participate. If you're the only one, you pay the high end of the bulk band. If 8 other people buy before November 30 (there are only 9 of the 27 units that have been put on the market so far), you'd get it at the low end of the band.
Personally, I'm not sure the bulk marketing tactic is worth the complexity. In my opinion, they should just price it well to begin with or sell them all in an auction -- especially since the auction prices have been creeping up. They're not gonna make oodles of profit but even recent auctions have been pushing up price per square foot as more people realize the economic recovery is underway and the rambling talk of another Great Depression is now limited to militias and other other fringe groups.
Also, the bulk pricing seems to steal the show from more tangible Eleven Eleven selling points like the pretty good location, great architecture, and nice pricing. Cool design elements include movable puzzle walls and multi-purpose storage units.
Maybe it's just me but I think the whole bulk pricing bands concept is more trouble than it's worth and might even cause some buyers to focus on other places which keep it simple. What do you think?
Brix and Gallery have released new units on some of their remaining homes last weekend. Prices have been adjusted on these homes based on the recent auction results. The new pricing is much more in line with the market with a few homes actually more attractive than resale condos. I wonder if the buyers who were unsuccessful in the auction bidding will be back to look at these homes.
Seems like auction results are the equivalent of new project announcements back in 2007. Here are some observations worth considering:
Most people (67%) in our recent poll felt that auctions are a great way to get a good deal on a condo these days. I think the attraction is that if you buy at auction, you get more assurance that the price you're paying is as close to the true market value as possible since the 2nd place bidder presumably was willing to pay at just under what you paid. Of course, that someone may be just as clueless as you fear you are but it's probably more reassuring for some than buying a property off of MLS that's been on the market for months and months with no one pulling the trigger.
In terms of the best auction deals, they seemed to be earlier this year when many people were convinced prices were going to free fall so the remaining buyers with higher tolerance for risk participated in the Queen Anne HS and Lumen auctions got units for 30% off of the pre-auction prices and less than $350 a square foot. The most recent auctions from September for Brix and Gallery saw prices just under $450 a square foot.
More auctions are probably on the horizon since they have proven to be an effective way for developers to move all their inventory while still getting most of what they wanted per unit. It will be interesting to see if this happens for Escala and whether the high dues continue to give buyers additional worries beyond the standard market concerns in general.
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.