Before we focus too much on 2010, here's a quick look back at some of the most notable elements of the 2009 Seattle condo story.
1. Auctions
2009 was the year for auctions. Queen Anne High School, Lumen, Brix and Gallery successfully sold most of their auctioned homes with closed price per square foot ranging from $334 to $439. Brix and Gallery subsequently adjusted prices for their remaining homes and sales picked up swiftly. Brix got approved by the FHA. Meanwhile, Sunrise on the Lake, The Summit, and Avaview sold 19 of their 38 homes last December.
Earlier in the year, President Obama announced the Homeowner affordability and Stability Plan to help homeowners with high loan to value mortgages refinance. The plan's goal was to reduce foreclosures and provide transitional help for those who were facing difficulties making their payments.
The first time home buyer tax credit of $7,500 passed in July 2008 was increased to $8,000 and extended to November 30, 2009. It was subsequently extended by Congress in early November 2009 for sales contracts entered by April 30, 2010 and closed by June 30, 2010. The approved bill also included a new $6,500 tax credit for existing home owners who had been residing in their primary home for the last five years out of the eight years.
3. Condos to Apartments
Rollin and Equinox with low pre-sales were unable to meet Fannie Mae's new pre-sale requirements (70%) and were converted to apartments.
4. Existing Condos Cut Prices
Belltown/Downtown/South Lake Union
Enso revised their prices in the middle of the year. That turned out to be a smart move and most agreed that the new pricing was much more attractive. The project is now ~60% sold with 43 homes closed as of last week. One bedroom homes start at $340,000, two bedroom homes start at $660,000 and penthouse homes from $980,000 to $1.39M. There is also a $5,000 buyer bonus for using their preferred lender.
Fifteen Twenty One was probably one of the few new condos that did rather well last year representing about 62% of all the units in downtown Seattle that closed over $1M. The project is now ~70% sold with 93 homes closed and some pending closing over the next few months. Available homes now start at $1.15M.
Earlier last year, Four Seasons managed to get a loan extension and started reducing prices (~15%-25%) for their remaining homes in the summer. Another hotel/condo, Olive 8, obtained a two-year extension on its construction loan. The project has closed ~ 50 out of the 229 available homes.
Escala- Please refer to my previous post.
Marselle started selling in the summer and sold 40 out of their 134 homes. Home buyers will have to go through their designated lender to get financing. The building was recently approved by FHA. The project is offering 0 homeowner dues until January 2011. One bedroom homes start at $229,000, two bedroom homes start at $379,000, and penthouse homes start at $499,000.
Capitol Hill/ Eastlake
While some developers opted for a quicker sales method by auctioning their remaining inventory, Realogics, the broker for Eleven Eleven East Pike and Decatur went with a different approach. Last year, they released homes in bulk for a discounted price. Eleven Eleven East Pike has since sold 10 out of 18 homes (55%) from their second release. The bulk sales pricing was up to 25% off previous list prices. Decatur sold 14 out of 42 homes (33%) in their second release with up to 35% off previous list prices. Available homes for Eleven Eleven East Pike start at $244,950 and they're offering FHA financing. Available homes for the Decatur start at $184,950. For a limited time, they're offering additional 3% credit in closing costs.
Ruby on Eastlake received FHA approval in early 2009 and has sold 60% of their homes. Their preferred lender is also offering $8,000 buyer bonus. Remaining homes are now listed under $299,500.
5. Condo Market Performance
The market in 2009 started out really rough. March was the lowest point for the Seattle condo market with pending sales down 43.92% and closed sales down 47.77% versus March 2008 and closed median prices were ~17% lower. Even the most optimistic were pretty bummed in March. Luckily, things bottomed out in March with October coming in as the best performing month. October pending sales saw a whopping increase of 73.25% over same period of 2008. Closed sales were 12% higher and closed median prices were 4.37% higher than October 2008. So how did the year end compare to beginning of the year? In December, pending sales were about the same level as January (~150 condos), closed sales were ~15% higher. That said, closed median prices of $260,000 in December were 22% lower than in January. The year did not end with a bang but it wasn't as disastrous as many had predicted at the beginning of the year.
6. New condos on the horizon?
Most of the planned condos on the horizon are either on hold, unable to get financing or have been sold at a loss. The developer for 1 Hotel and Residences (1st Ave & Pine) was unable to obtain financing and the big hole on the construction site will be turned into a parking lot. The twin towers, Pagoda and Heron (5th and Stewart) lost half the site to foreclosure to New York lender G4 Capital Partner. The site of Icon Tower (Wall St & 6th Ave) in Belltown is up for sale. Insignia in Belltown (Battery & 5th Ave) will be on hold. Alex in Belltown is still under full construction. The developer is pushing for the finish line in 60-90 days. There will be 4 Alex models available for prospective buyers and agents to tour around April 1st.
Stepping into the new year, there are several questions on home buyers' and sellers' minds. Here are the top 5 based on what I'm hearing from my clients.
Top 5 questions on home buyers' minds
Will interest rates start rising?
Should I wait to buy?
Is it worth pursuing short sales/foreclosure homes?
Which new condo building will start reducing pricing that's worth tracking?
Which building will be having an auction?
Top 5 questions on home sellers' minds
Is the first time home buyer tax credit going to improve the condo market and help me sell my condo?
When should I re-list my condo this year (after my first unsuccessful attempt to sell)?
Should I walk away from my condo which is currently under water?
For how much can I rent my condo?
How much do I have to bring to the closing table if I choose to sell at a loss?
Maybe in future posts, I'll take a stab at some of those questions but this might be the longest post in Seattle Condo Review history so I'm gonna take a break for a few days ;-)
Related posts:
2008 Seattle Condo Market Year in Review
2007 Seattle Condo Market Quick Review
