Wendy Leung's Seattle Condo Blog

Seattle Condo Market December Update: Steady Sales from Lower Supply

Last December only had 689 condos for sale in Seattle, a drop of 16% from the previous month, and 30% fewer than December 0f 2010.  In contrast to shrinking supply, year-over-year December closed sales were up by 16%.  In fact, December 2011 ended with 22% more closed transactions than January 2011, good improvement...but not a home run. 

Median prices were off by 7% from twelve months ago landing at $234,000 in December and have been hovering under the $250,000's mark for the past 7 months. 

Supply absorption rate (based on closed sales versus inventory) showed sign of improvement from the beginning of the year.  In January, we had around 9 months of supply and the year ended with 5 months supply, moving from a strong buyers' market to a neutral market (favoring neither buyers nor sellers).

Overall, the year concluded with lower supply and higher sales from beginning of the year but median prices were still showing softness.  If the market continues the same momentum as the last few months with lower supply and higher sales, we might start seeing gradual pricing improvement.  Much like the national economy, things are getting slightly better, but it's a slow road.

 

Seattle Ranks #2 for Office Investment

Assuming what's good for the office and retail market is good for the condo market, Seattlelites have something to look forward to!  Of course, being best in the country right now is like being called one of the tallest dwarfs but we'll take what we can get right?

Seattle will be among the top five markets nationally for investment in office and retail properties over the next five years, according to a new national report by Santa Ana-based real estate firm Grubb and Ellis Co.   

Grubb & Ellis is predicting a “continued sluggish recovery” for commercial real estate in 2012, with gradual improvement in leasing and sales of commercial properties.

The growth of high-tech and bio-tech companies put Seattle second only to San Francisco among the U.S. markets predicted to be best for investment in office buildings. 

Here's the full article.  Not a bad way to start 2012 :-)

Seattle Condo Market Fairs Well In November 2011

November 2011 data is in for the Seattle condo market and all things considered, it was a pretty good month -- considerably more promising than October.

Highlights:

• Sales month over month were flat (which is actually good since we're now entering the holiday season) but when you compare year over year, we saw about the same number of sales from October 2010 to October 2011. November, on the other hand, saw sales go up a strong 44% from November 2010 to November 2011.
• Median prices recovered 7% from $226K in October 2011 to $240K in November 2011.
• Supply remained stable with only 824 units for sale (versus over 1,127 in June).

Have a Happy Holiday!

Wendy

 

Olive 8 Closed 148th sale and Reducing HOA Dues By 15%

Olive 8 is 65% sold as of this press release. Since readjusting their prices over the new year, they are averaging 4.5 sales/month bring it to a total of 148 sales. The developer has also announced that the HOA dues will drop by 15% (from $0.54 per foot per month to $0.47 per foot per month). According to the developer, the reason for that is due to the building's operational efficiencies shared by the hotel and from lower utility consumption within the LEED Silver Certified building.

It's rather unusual for such a new building to have the HOA dues reduced within the first few years of completion. Generally, for new condos, the dues typically stay around the same or go up (within the first couple of years) by a few percent, sometime as high as 10% to reach a realistic budget. I guess this a good news for homeowners and buyers. I'm curious to see how that will hold up for the next two years.

 

Related posts:

Olive 8's Video and New Reset Pricing
Olive 8's New Pricing 
Olive 8 Auction Results
Olive 8 & 5th and Madison Update
Olive 8 going Auction

Developer for Queen Anne High School Conversion ordered to pay $9.4 million

Puget Sound Business Journal and Seattle Times PI recently reported about the lawsuit brought on by Queen Anne High School homeowners against the project's developer. The judge has ordered the developer to pay QAHS's HOA $9.4 million in liability and legal fees. 

"The lawsuit alleged leaks and cracks in the building, including such defects as exposed, unprotected drywall and wood framing, substandard windows and drains, missing and ineffective flashing, insufficient weatherproofing and unprotected joints. Reported damage includes water-stained drywall, covered-up rotted deck sheeting, water-damaged plywood, mortar turned to sand and powder, and cracked and flaking bricks and terra cotta."
(Source: Seattle PI)

If you recalled, the project was converted in the summer of 2006 and completed sometime in 2007 and had a successful close out auction in 2009. Matt over at Urbnlivn has the time line on the suit. It's quite amazing within a few years, the owners discovered the problems, sued the developer and won the lawsuit with such a substantial judgement. What a speedy process! I wonder which firm they hired. It must be a relief for the homeowners. Now, the hard part is probably going through all the repair work. Being through one myself for 1 1/2 years while living in a condo, I sympathize with what the owners will have to go through. On the bright side, when it's completed, it's just going to make Queen Anne High School that much more desirable as a livable historic condo. 

Related posts:

Queen Anne Condo Auction-by the numbers
Updates on Queen Anne High School
Queen Anne High School Updates
Queen Anne High School Begins Selling
Want to own a piece of Seattle History?

Seattle Condo Inventory at Lowest Levels since Feb 2007

The Seattle condo market continues to show lower levels of inventory and lower median prices than 2010.  

For the month of October, we had 137 homes closed, an increase of 10.48% from October 2010 and at the same level of closing versus last month. Condo inventory dipped by 8% from the previous month and 32.47% from twelve months ago. There was only 911 homes on the market. This is the lowest level of inventory listed on the NWMLS we have ever seen since February 2007. 

Year-over-year pending sales shot up by 56.30% with 211 homes under contract (not closed yet) last month. The median price for October's closed sales was at $226,000, down by 9.60% from a year ago. Comparing that with the previous month, it was down by ~6%. Seventy five percent of the homes sold last month were under $400,000. Bank owned and short sales accounted for ~35% of the sales. 

The absorption rate for Seattle condos showed slight improvement from the previous month. We had about 6.6 months of inventory on the market based on closed sales and 4.3 months based on pending sales. Last month it was at 7.1 and 4.9 months respectively. A 6 month absorption rate indicates a neutral market so we are in that range now. 

Overall, we still have pretty consistent sales, although most of the sales are occurring in the lower price ranges. Short sales and bank owned condos also account for some price pressure on the condo value. Moving towards the end of the year with holidays around the corner, we can expect fewer condos coming on the market, fewer sales and most likely lower prices. 

 

Inventory Glut Showing Improvement: Months of Inventory Down by 50% Versus Same Time Last Year

September condo sales figures are in and here are some highlights:

• Inventory is at its lowest level for this year coming in at less than 1,000 condos on the market. Listings were down 7% versus August.
• Pending sales are up by 34.67% compare to same period last year and about the same as the previous month.
• Year-over-year sales were up 4.58% but were down from the previous month by ~20%.
• Median prices were steady floating around $240,000 to $255,000 for the last few months but down by close to 20% from a year ago.
• Months of inventory (how long it would take to consume all the available units based on current run rate) continues to show improvment from a year ago. We had about 7 months of inventory on the market based on closed sales and 5 months based on pending sales. Compared that to a year ago, it was at 11 months and10 months respectively.

Vulcan Condo News

If you can recall, Vulcan Real estate had 5 condo projects: 2200 Westlake, Enso, Rollin,  Veer Lofts, and Martin planned during the condo boom. With the exception of Martin, the rest were completed as condos. However, Rollin was later converted to an apartment. The Martin project was put on hold. Now, it looks like Vulcan Real Estate is going to start constructing this project very soon, not as a condo but as an apartment. The 24-story, 188 apartment building will be completed in 2013. It's located right behind the Cinerama Theater on 5th Ave and Lenora St. Read more on Seattle Times.

Related post:

What's going on in South Lake Union 

Cosmopolitan's Views Under Attack (again)?

Looks like the Cosmopolitan, which suffered from a loss of views by a taller project a couple of years ago, may be affected yet again by another construction project.  The Department of Planning and Development recently approved a proposed 400 foot tower in the Denny Triangle. The new project, designed by Weber Thompson will be on the corner of Lenora St and 8th Ave (2030 8th Ave). The current site is a two story commercial building while the proposed new structure calls for a 39 story high rise with 350 apartment units. Read more here.

There are several high rise condos located within a two blocks radius of the new project: Cosmopolitan, 2200 Westlake and Enso. If the giant building goes up, it will probably have the biggest impact on Cosmopolitan.  A couple of years ago, soon after Cosmopolitan was built, it had an office project going up on its western side. The plan initially called for a lower building (13 stories) with smaller impact on the Cosmo but the plan was later on revised to go much higher (33 stories). After the completion of that project, the new height affected Cosmopolitan residences living on the higher western floors.  

This latest new proposed project is probably something Cosmo residences won't be looking forward to either.  According to the spoke person representing the new project's owners, there is no plan to start construction yet. The building permit is good for 6 years. So, we might not see this new building coming up for a while (or at all) but it's worth keeping an eye on.

Related posts:

Cosmopolitan View
Cosmopolitan
2200 Westlake
Enso Update

Seattle's August Condo Sales Bump Up after Dip in July

•  NWMLS reported 172 condo sales in August, a gain of more than 20% from the same period last year and 26%  higher than the previous month. The neighborhood with the biggest gain in condo sales is in Belltown/Downtown with 50 condos closed, twice the amount than last year.
  - 
• The median price for closed condos was at $246,000, This is down by 17.17% from tweleve months ago and staying around the $250,000 level for the last three months. Interestingly, If we look at June, July and August 2010, median price was staying at around $290,000 level.
  - 
• We had 244 new units of inventory added to the market last month totalling 1,048 condos on the market, a drop of 29.76% from a year ago and 3.5% from the previous month. August was the 2nd lowest inventory level for this year. January 2011 was the lowest level with 1041 condos on the market.
  - 
• Months of inventory (how long it would take to consume all the available units based on current run rate) is showing improvement from August 2010.  Last month, we had about 6 months of inventory on the market based on closed sales and 5 months based on pending sales. Compared that to a year ago, it was at 10 months and 8 months respectively.

Million Dollar Condos in Seattle Reach 2007 Prices

I was curious how much of a hit the >$1M condo market in Belltown and Downtown (98121 & 98101) have taken since the peak in 2008.  Below are some charts and some observations.

• The average price per square foot on >$1M condos has fallen below 2007 levels (10% below 2010).  
• The average price sold so far this year is still above 2007 levels (buyers are getting a lot more for their >$1M money).
• Total sales of >$1M condos in 2011 will likely be lower than 2007 and less than half the 2009 peak.
• The most expensive condo sold was in 2008 at Four Seasons (#1703) and it sold for $11,386,525.

                      

Seattle Apartment Buildings Continue Circle of Life

As the demolition work at the McGuire Apartment is pressing on layer by layer, a couple of new buildings are emerging in Belltown and the circle of life continues.  Note these are not condos but rather apartments (my blog must go on).

One of them is located right across the street south of Mosler Lofts called Altos (2612 3rd Ave). Not so good news for Mosler owners who live on the south side of the building as most of their views will be blocked by this taller building. Altos is a 17-story, 184 unit building with an estimated completion date of Spring 2012. It looks like a nice building; perhaps, it would be a nice condo conversion towards the end of the decade?

Another apartment project will be built on 6th Ave between Lenora and Blanchard. Construction is already underway for this 654 unit luxury apartment complex which is comprised of two 24-story towers with retail space. This project is expected to complete in 2013. Read more on Sixth and Lenora Apartments.

According to Dupre and Scott Aparment Advisors' forecast model last year, rents will climb 2.3% in 2011. They expect rents to rise to 4.6% in 2012 and 5.1% in 2013. If all of this come true, it will be nice timing for Altos and Sixth and Lenora Apartments to enter the market.

I looked into some condo rentals on the MLS and landlords have a much better time renting out their condos these days than three years ago. The average days on market for condos in Belltown and downtown is 55 days as oppose to 91 days three years ago this same period.  Hope everyone's enjoying 2011, it's the year of the rental units :-)

Related posts:

2010 Seattle Condo Market in Review
McGuire Building to be demolished
For the Data Junkies: Dupre and Scott Apartment Investor Report
Conversion and Rental Market Report
Seattle Rental Market

 

Seattle Condo Market Muddles Forward for July of 2011

July numbers are in for the Seattle condo market and they're much like the national economy: nothing to get excited about.  

Some highlights:

• After three months of increases in sales, July sales came in below March levels but above Feb and took an almost 30% drop versus June.
• Those sales numbers were slightly better year-over-year with July sales about 6% below July of the previous year.  This was actually better than June 2011 which was 15% below June of the previous year.
• Median prices month-to-month were up from $246k in June to $255k in July.  Total condo listings meanwhile stayed steady and dropped less than 4% versus June.

Overall, this data looked a bit like the national economy.  Some positive signs but pretty marginal.

Almost Half of Queen Anne Condos Sold were Bank Owned or Short Sale

Back in April, I put together some charts on bank owned and short sale properties in Seattle looking at how long it takes to close on these types of properties.

This time we are going to look at which neighborhoods have the most bank owned and short sale inventory and sales. Active listing data is from the first day of August 2011.  Sold data is based on the last 6 months (2/11-7/11). Co-op's are removed from all these areas. So, we will be looking at purely condos.

Some highlights:

• While Belltown may have the image of the epicenter of the condo bubble, almost half of all Queen Anne condo sales were either bank owned or short sales compared to 1/4 for Capitol Hill and 1/5 for Belltown/Downtown.
  -- 
• Of today's active listings, Capitol Hill takes the prize with 23% of short sales compared to 20% and 11% for Queen Anne and Belltown/Downtown, respectively. 
  -- 
• For those of you sensitive to what you can get for your money, the average price per square foot sold for short sale condos in Queen Anne and Capitol Hill is $258.11 and $304.31, respectively. As for Belltown/Downtown, they are going for $368.88/square foot.
  -- 
• Queen Anne has the highest number of bank owned condos sold (in fairness, 1/3 of them are from 200 W Highland project). 

 



 

 

 

 

 

 

 

1521, Olive 8 & Four Seasons Update

Fifteen Twenty-One has just reported selling 83% (115) of their inventory. There are some selected homes priced below $1M available but are not listed on the MLS and the highest priced penthouse is going for more than $4M.  Eighty three percent sold over the last 1 1/2 year in this market is a pretty good progress. I think one of the reasons is that there are few newers condos on the market right now with direct water views available giving 1521 a little bit more advantage over other newer condos. The website has a cool map showing the number of condos priced above $1M sold since 2000. I think it would be more interesting if they could add another heat map that shows sold inventory over the last 3 years. 

How did Olive 8 fair after the auction and "reset" this year? They have 33 sales since the first of the year and now are more than 60% sold.  Apparently, there was a big buyer who picked up 10 units as an investment. There is also a 5% down payment option available through their lender. The developer is working with Alchemy Collections to furnish their remaining open one bedrooms (for full price offers).

 

The Four Seasons Private Residences has restructured their construction loan and is now back on path marketing the 11 remaining units. The building went through some financial difficulties over the last two years but fortunately was able to restructure the loan with the lender, Washington Real Estate Holdings. Read more here. 

One bedroom       1,328-1992 square feet------$1.475M-$2.555M

Two bedroom      1,850-4,132 square feet-----$2.44-$6.30M

Three bedroom   4,488 square feet-------------$7.15M

 

Hope this helps.  

-Wendy