Seattle Condo Review: Reviews, News, and Seattle Condo Market Updates

FHA Update

It seems like everyday we are hearing new updates from the financial industry.  FHA has just announced the following changes:

1.) Increase in the up-front mortgage insurance premium, paid by borrowers, from 1.75% to 2.25%.

2.) Allowable seller concessions will be reduced from 6% to 3%

3.) To qualify for the 3.5% down payment program, a borrower needs to have at least a minimum FICO score of 580.  Borrowers with lower than 580 score will have to put down 10%. 

The last change probably has the least impact on home buyers since currently represents a smaller segment of the market.  Read more here. 

Top Seattle Condo Market Developments and Trends

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.

Matrix, the Marriage of MCM Group & Williams Marketing

MCM Group and Williams Marketing are merging.  The two companies have decided to tap on each other's strengths and have formed Matrix Real Estate.  Both have a pretty impressive list of projects they've taken on over the years selling over $1B worth of property since 2005.  This partnership will probably be mutually beneficial for them and perhaps gaining the largest market share in town.

Matrix announcement

What do you all think?  Will this be good, bad, or neutral for condo buyers and developers?

For the Data Junkies: Dupre & Scott's Apartment Investor Report

There's a whole lotta data up in D&S's recent article on apartment ROI.  The article suggests most apartment investors, even in the worst of times, still made money (4% CAGR) though that's probably because they hold property for a >10 years.  Yep, these are serious Investors, not flippers a few years out of college.  

According to D&S, the folks who bought an apartment in 2007-8 will likely be underwater for 4-6 years so if you're an investor, be happy renting your apartment out for several years before you can realize significant appreciation or try and sell next year and redeploy the capital elsewhere.

In short, buyers these days should look at real estate as a long term investment, especially those who bought at the top of the market. 

See the full article here.

October Seattle Condo Sales: Up, up, and....up

October 2009 numbers are in...and the recovery is in full effect.  

Even our favorite bear reader, MD, will have to call this glass half full.

Some highlights:

• Pending sales were up 73% over October of 2008 and up almost 25% versus September 2009.
• Closed sales were up 12% over October 2008 and up about 5% versus September 2009.
• Median prices were up 4% over October 2008 and up around 15% versus September 2009.

Congrats to buyers and sellers.  Buyers, you should feel confident you're not trying to catch a falling dagger and know that the market is already moving up (not just going to move up).  Sellers, the buyers are coming back (though don't get greedy, just sell for what the market will bear).

Home Buyer Tax Credit Update

The legislation to extend the first time home buyer tax credit beyond its November 30 deadline and expand it to a wider group of home buyers was approved by Congress this week and signed by President Obama yesterday.  Here are some of the highlights of the expanded and extended tax credit benefits:

• The $8,000 tax credit will be extended for first time home buyers (who have not owned a primary home for the last 3 years prior to purchase) for sales contracts entered into by April 30, 2010 and closed by June 30, 2010.


• The bill also includes a new $6,500 tax credit for current home owners who have been residing in their primary home for five years out of the last eight years. The sales contracts need to be entered into by April 30, 2010 and closed by June 30, 2010.


• The income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 (single taxpayers) and $150,000 (married taxpayers filing a joint return) to $125,000 for dividuals and $225,000 for married couples. The new income limits are only applicable to purchases occuring after November 6, 2009.


• Qualifying home prices are capped at $800,000.

More information available here.
 

Related posts:

Tax credit for first time home buyers
More support for first time home buyers

Auctions, Auctions, Auctions

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.

Some advice for potential auction buyers:

Seattle Condo Market Update (September 09)

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.

Icon Tower and Enso

The site of Icon Tower is up for Sale.  The approximately 11,000 square foot lot was planned as a 32-story condo but later on the developer decided to change it to an apartment.  However, they were unable to obtain financing for the project.  Read more here.
 

 

Enso will be having their Grand Opening this weekend from 11.00am to 5.00pm.  The project is approximately 60% presold and working on obtaining final approval from Fannie Mae.  There are not a whole lot of new projects out there that are interesting to visit unless you don't mind crossing over the bridge to Bellevue (yeah, I know).  If you are in the market, I would check out Enso.  All the floor plans on the 12th floor are open for the public to view.

Related posts:

Enso Update
Icon Tower 

Seattle Condo Boards

There was an interesting article on Co-op/Condo boards this weekend in the NY Times.  One quote that caught my eye was:

The people who run for a board seat, he said, tend to fall into three categories: “Some people love the power and they like the respect it gives them; some people do it because they feel it’s time to do something for the community; and some people have a personal agenda.”

It reminded me how little attention some buyers pay to the quality of the condo associations.  Granted, condo boards turnover pretty frequently but in terms of the culture, expectations, and history, some buildings seem to have it down better than others.

Four Seasons Condo Cut prices

Four Seasons Condos is planning to cut prices for their 11 remaining homes.  So far, 22 homes have closed with three more units (presold 6 months ago) waiting for custom finish work to complete.  Read more here. It comes as no surprise that the higher end million dollar homes are affected given the current market conditions.  

We are looking at more than 2 years of inventory on the market for the $1M and above homes in the Belltown/Downtown neighborhood.  This is probably the time when buyers who are in the market are going to keep their eyes out for good values.

One question that remains is are all of these price cuts we hear about enough to get buyers back into the market or will they end up being a series of small reductions which may only cause buyers to wait for the next one.  The more I think about it, I tend to think lots of small cuts will actually reduce buyer confidence as opposed to holding prices or doing major cuts in one fell swoop.

Thoughts?

Related posts:

My thoughts on Four Seasons
Four Seasons Update 2
Four Seasons Update

July Seattle Condo Market Update

June numbers are in.  My thoughts:

• The free fall appears to have ended in March 2009 when pending sales were about half of March 2008. Since then (April, May, and June 2009), we've seen pending sales within 10% of the same month previous year. 
• While we're seeing glimmers of hope, we're still not beating last year's numbers.  It's getting close but still softer than 2008 across all major metrics.
• If I were a betting person, I'd say we'll see continued improvements over time but it will probably be a long, hard slog for the next 6-12 months.  The good news is that painful period late last year and early this year where each month was worse than the last seems to have passed.

Related posts:

May Seattle Condo Market Update
April Seattle Condo Market Update
March Seattle Condo Market Update

Condo Updates

I've been working OT on a few deals so have a lot of catching up to do for the blog.  Here is some of the latest Seattle condo market news:  

First off, The Schuster Group's proposed project on the corner of Elliott and Cedar St (previously named as Bellora 2 at UrbanCondominiums.com in 2007) is heading for Downtown Design Review Board on June 23rd.  The proposed project will housed 120 condos and may go as high as 14 stories.  The last time I spoke to the developer's office, they were waiting for the market to recover.  Construction may not start for a year or two.  So, it will be a few years before we see this project.  Read more here. 

May 2009 Seattle Condo Market Stats

Northwest MLS just released May 2009 stats. As you may recall in April, we had pending sales up almost 50% from March. How did May pan out?

First Church Converting to Townhomes

(Pictures provided by Moira Holley, archived under Seattle Condo Gallery)

As it turns out, First Church of Christ is turning into a 12-unit townhome building.  Last week, they debuted their model home.  During today's broker's open house, I had the chance to tour the building and meet up with the developer.  Even though it is not a condo project, I thought it was still worth checking out and let's be honest, there aren't exactly a stampede of new condos being announced every week like in the good old days (and yes, I appreciate those days are part of the reason we're in a recession but they were good if you liked writing about new condos).