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 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.

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.

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.

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

March 2009 Seattle Condo Market Stats

 
The March statistics are out.  Are they looking as sunny as the weather we have been getting the last few days?  Here is a quick look:

Months of inventory
Months of inventory for March was 11.6 (i.e., it would take 11.6 months to sell all of the current inventory at the present purchasing volume).  This is an improvement from the previous month at 13 months but still higher than a year ago which was a much more brisk 6.4. 

Pending sales
Pending sales continue to remain 44% lower than same period last year and a modest improvement of 3% higher than previous month.  

Seattle Condo News

 

This has been in the news for a week but at first, I didn't feel like blogging about it since Thornton Place is kind of far away and their new layoff protection program seemed more like a PR strategy than anything else.  I would much rather they lower their price, buy down points, or throw in some nice upgrades.  Layoff protection is hard to value and probably is most valuable to buyers who might not be qualified.  If you're curious, here's the article in the PI.

 

King 5 just ran a story about more condo owners breaking homeowners rules.  Particulary renting out their condo month-to-month instead of the typical minimal 6-12 month lease period that most condo associations allow.  Frankly, I won't be suprised if they rent it out even week-by-week.  Although I'm not a big fan of short term rentals, I don't blame those homeowners for trying to rent out their property to minimize their losses given recent market conditions.

 

Related posts:

Northgate's Thornton Place Development

Elektra Short Term Rental Update

Elektra- Does your condo come with VRUs

Queen Anne Condo Auction - by the numbers

As promised, here's a neat chart I whipped up showing the original listing prices and their ultimate auction winning price.  As you can see, some people picked up 2BR units for just over $300K which I suspect, at the risk of putting chum in the water for the pessimists, will turn out to be a really good price.

Overall, a few things struck me about yesterday's auction:

Cosmopolitan View

What happens when a tall building is constructed 18 feet from your window? This is how it looks. Needlesss to say, it's really unfortunate for owners living on the west side of the Cosmopolitan.

Lesson learned: always assume your view could go away unless it's truly protected.

Related posts:

Tower spacing news
Where is my view?
Cosmopolitan

Queen Anne High School: Inventory Close Out Auction Review

            

Queen Anne High School Condo is following the foot steps of Press Condominiums and Seventeen07 and will be auctioning their 12 remaining homes on Sunday, March 22nd at the Grand Hyatt Hotel at 1:00pm.

Minimium bids for these homes start at $145,000 for the studio, $325,000 for the one bedroom plus den, $245,000 for the two bedrooms, and $650,000 for the penthouse.  Click here for more details and the auction video. 

I visited the project again today and took another look.  Of all the homes, #367 and #402 (penthouse) seem most interesting.  The penthouse was previously listed for $1.29 million and the price was dropped to $999,950.  It has a great view of the city, 14 foot ceilings and large vintage arched windows (though they are single pane).  As for #367, I like the fact that it is facing the fountain courtyard, well laid out, and the deck is accessible from both bedrooms.

In the last auction for Press Condominiums, 350 people attended the event and all the homes were sold within 45 minutes at ~ 92% of the asking prices.  Queen Anne auction will be conducted by the same company, Kennedy Wilson Auction Group, a real estate company based in Beverly Hill, California.  So far, they are not extending this type of service to individual owners yet but if this method continues to find success, I wouldn't be surprised.

Ruby Update

Fannie Mae's new guidelines requiring new construction to be at least 70% presold before they will fund loans has affected some projects in Seattle.  One such case is Rollin in South Lake Union delaying their closing.  As for Ruby in Eastlake, it looks like they have found a way to get over this hurdle.  Ruby has started partnering with a local lender (Seattle Mortgage) that has committed to close homes with no presale requirement.  The developer is also working with other regional lenders for additional commitments to close homes with no presale requirements.  The building is also FHA and VA approved which opens up more doors for them to appeal to home buyers with low down payment.  To encourage purchase, the developer is offering rate buy- down's for home buyers.  I wonder if other projects will follow suit.

Related posts:

Ruby Condos Update
Ruby Condos
Rollin Hard Hat Tour
South Lake Union Update

Home Auction

Developers aren't the only ones using auctions for a speedy sale nowadays. Some individual owners are trying this non-traditional way to sell their homes. I came across one such auction yesterday (Canal Station #304) sent by a fellow colleague. According to her, the home isn't distressed or being foreclosed upon. The seller simply wants to do a fast sale (knowing it would likely be at a loss). The auction is for an one bedroom condo (873 sq.ft) in Canal Station. The minimum bid starts at $279,000.

Elektra Update: Short Term Rentals OK

Owners of vacation rental units in Elektra appealed the initial decision against the practice of renting out units for short stays last month.  The hearing examiner ruled that the city could not enforce a 30-day minimal stay and VRUs owners won the appeal. This decision will probably upset some owners in the building who are concerned with alleged risks they believe are associated with temporary visitors. 

Read all the legalese on the hearing examiner's decisions here. 

(Update 03/02/09: I received an email from a resident, Tika Bordelon regarding the status of the appeal.

"The VRU owners had two current appeals and one was "thrown out of court" for essentially being frivolous. The other one is still going through the process but it doesn't look good for them. Many have either sold or converted to long term rentals. Our board attorney has been trying to keep us up to date of the situation, of course, at the end of the "findings and decisions" from the city it states

"...THE DIRECTOR'S CONCLUSION THAT SHORT TERM RENTAL OF THE ELEKTRA CONDOMINIUM UNITS IS NOT A PERMITTED ACCESSORY USE..."

Patrick downs, the city attorney connected to this case and also our lawyer and board all agree that it is illegal to rent for less than 30 days in the Elektra. after that they just become "rentals". The three main VRU companies:)

www.seatoskyrentals.com
www.seattlesuite.com
www.pikeplacesuites.com

They now say on their sites that their elektra properties have a 30 day minimum")

 

Related post:

Elektra: Does your condo building come with VRUs?

 

Capitol Hill Condos -Homes for Auction!

In this slow market when sellers are not getting too much response from buyers. What can they do to speed up the selling process?

One project is using the auction method. Seventeen07 condos is holding an auction on Oct 19 at 2.00pm at Hotel Monaco in downtown Seattle. Instead of dragging out on the sales on the remaining units, they are hoping to have quick sales for all the remaining 17 homes.

Seventeen07 is a recent conversion on Capitol Hill which started their sales back in the spring this year. The building comprises of 36 homes which include studios (395-397 sq.ft.), one bedrooms (471-665 sq.ft) and two bedrooms (817-849 sq.ft.).

Interested bidders will need to visit the sales center and register themselves. Tour the condo and pick the unit(s) they desire to bid. Talk to their preferred lender, either with Wells Fargo or Countrywide and pick up a bidding package.

On bidding day, home buyers should arrive with a $1,000 cashier check written out to themselves (presumably this will help show you're not just a window shopper). The bidding will start at $10,000 increments. If you are successful in the bidding, you would need to provide another $1,500 check to make the deposit for the home. The home would also need to close in 30 days.

Bidding for their 17 homes start at $95,000 for studio, $195,000 for one bedroom and $215,000 for two bedroom. For context, the 2BR's were listed for low 300's back in August. Only one bedroom and two bedroom homes come with parking. Based on their sold units, the two bedroom units will give home buyers the biggest room for bidding. If the seller actually honors those minimal bid prices and there aren't a lot of people in a position to pull the trigger, a 2BR for potentially only $215,00 could be a risk tolerant investor's opportunity.

-Wendy

Seattle Condo Market Update

The last two weeks have been a crazy time for the financial sector. We had Lehman Brothers file for bankruptcy, Merrill Lynch rescued by Bank of America, the federal government taking control of Fannie Mae and Freddie Mac, and bailing out American International Group with a $85 billion loan. Closer to home, WaMu's shares sunk to $2.01 this week. There's no doubt this presents a challenging and discouraging time for America and obviously impacts those who have been considering buying a new home.

In Seattle, numbers from the NWMLS for August indicate that inventory has started leveling off with a total of 1,491 condos on the market, 9% higher than same time last year. On the bright side, back in January this year, we had ~65% higher inventory than January of 2007 so inventory trends are coming down.

Median prices for August ($310,000) have fared better than the previous month ($299,975) but are still lower than a year ago which was $327,500. This is a 5.34% drop versus the same time last year. Compared to other cities, we are still experiencing a minor drop in median prices but it's unclear if Seattle will continue to be an oasis of fairly stable prices in light of what's going in in the rest of the country.