Wendy Leung's Seattle Condo Blog

Viaduct and Seattle Condos

As I was driving South on 99 to the Stadium, it was great to see some progress with the Alaskan Way Viaduct Replacement project. The south end of the Viaduct had been demolished and the traffic has been shifted onto a new bridge near the stadiums. After more than 10 years of discussion, planning, design and prepping work, we can expect the deep bore tunnel work to begin next year. Yes, finally. With the removal of the Viaduct along the waterfront, which is estimated around 2016, I had to wonder which condos would benefit from it.

Well, I think a few of them like Belltown Court, Belltown Lofts, Pomeroy, Site 17, Fix Building, HillClimb, and Our Home Hotel condo will be better off. Let's take a closer look on why that's the case.

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?

Comparing Seattle Condo Market Sentiment from Early 2011 to Late 2011

Earlier this year we had a poll asking readers how the condo market would do in 2011. Last month we had a similar poll asking for sentiment about 2012.

So has the vibe changed from last year to this year?

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 

Marselle & Danielle Over 70% Sold

                          Danielle                                                                   Marselle

The Danielle project which was completed last summer is now down to six from an original thirty one homes. With over 70% sold, their close out pricing for their one bedroom units are priced at $199,950 (3 remain), one bedroom plus den is $269,950 (2 remain) and the lone two bedroom is at $479,950.

As for Marselle, they have sold about 100 homes, which puts them at about 75% sold. The one bedrooms start at $219K, the one bedrooms with den at $289,990, and the two bedrooms start at $394,990. There are also some cool two-story homes that are two bedroom plus den and 2.5 bath or could be converted to three bedrooms. Each of these two-story homes also has private access to roof top decks.

Related posts:

The Danielle
Danielle Update
Marselle Condos Update
Marselle Condos

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.
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• 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.
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• 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.
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• 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.

Seattle Condo Appraisers Sound Off

The last three years have been an interesting ride for most Seattle condo watchers.  When the market started slowing down in the fall of 2008, a lot of people believed (in retrospect, hoped) that the slow down in prices was just a small correction.  However, when prices continued to slide over the next few years, condo owners were and still are faced with a tough decision of either holding on, renting the unit out, selling it at a loss, or short selling.

With a higher proportion of shorts sales and bank owned properties on the market versus four years ago, we are seeing a split value in comparable data from the distressed and non-distressed properties.  Pricing your condo correctly today has become more critical than ever.  This important job lies mainly with your Realtor (assuming you're not doing it DIY).  If you have a buyer for your home, will it pass the buyer's bank appraisal?  How are appraisers valuing properties in this market and what has changed?

I interviewed two appraisers who shared their perspectives. This may be worth taking into account as you select what pricing strategy to use for your condo.

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.