Seattle Condos and Downtown Condos | Reviews by Wendy & Marco

2012 Seattle Condo Market in Review - The Year of Dwindling Inventory

As we start off 2013, every year in January we like to take a quick pause to take a look back and recap the major events, trends, and milestone from the previous year and for the heck of it, make some forecasts and predictions for the upcoming year.

Trends of 2012 and Events Worth Noting

We saw our condo market absorption rates increase and inventory dwindle to the point nearly all segments of our Seattle condo market were leaning toward a seller’s market with less than three months of inventory. 

Multiple offers returned but interestingly enough we did not see a sharp incline in pricing. This is likely due to buyers who were much more conservative and resistant to overpaying in light of the recent market crash. This could also be due to more stringent appraisal review practices by lenders, which many applaud.

2200 Condominiums in South Lake Union reached the largest construction defect settlement in state history with its developer for $26 million dollars.

We saw the return of investor buyers. An increase in all cash purchases seemed to indicate investors gained confidence in spending again.

Many newer condominium buildings entered litigation with their developers in accordance with the Washington State Condominium Act’s construction warranty time frames. This further limited available condo units on the market because units that are for sale in buildings with pending litigation have a very hard time obtaining buyer financing.

Client Question of the Week: Is the VA Loan Program Available for Condos?

This week, new clients of mine wondered what their options were for a downtown condo that would qualify for the VA loan program. The Department of Veteran Affairs loan program is available to those military veterans and active duty personnel that have accumulated enough service time to be eligible for the favorable terms afforded by this loan program.  Benefits over conventional loan programs include market interest rates, reduced down payment requirements, no monthly mortgage insurance, as well as more flexibility with debt to income ratios and closing costs.

What’s the catch? Condominium buildings must go through the VA's condo project approval process.  Similar to the FHA approval process, an HOA would need to provide supporting documents verifying the eligibility of the condominium community as a whole.  No longer can an individual condo owner seek VA approval if they are either refinancing or selling their condo.  It's all or nothing.  VA looks at things such as overall financial health of the HOA, percentage of rental units, percentage of units that are delinquent on dues, and level of insurance protection, to name a few.  Currently, very few VA approved condominium buildings exist in the downtown core of Seattle.  Newer condo projects in the Downtown, Belltown, Midtown and South Lake Union area especially, lack this VA approval.  So it can be challenging for those wanting to use the VA loan program to find options in our already low inventory market.

FHA Changes Mean Help for Condo Buyers, Sellers and HOAs

The Federal Housing Authority (FHA) recently changed several of its outdated and controversial guidelines, which might help those looking to buy or sell a condo.  Rule changes are “temporary” but include things such as increases to the allowance on percentage of commercial space within a condo project, increased flexibility on percentage of delinquent HOA dues, less liability for HOA Board Members who sign off on the FHA application, as well as allowances for increases in the number of units that can be rented at one time or owned by one person in a building. All of these changes have the ability to help condo buildings, condo owners, and of course buyers who are using FHA loans.

A recent article in the Seattle Times summarized some of the key relaxed guidelines the FHA recently announced.   I wanted to share this article with you and go into more detail about how it affects us here in Seattle. If you are a buyer, seller, or HOA board member, and FHA has been a topic of recent discussions, you might want to revisit it. As of September 13^th you now have more options so I’d take another look to see if your condo building or one you thought about buying in might now be in a position to get FHA approval.

Client Question of the Week: My condo's tax assessed value went down, does that mean my condo value decreased?

Recently a client emailed me a great question that we felt many people would benefit from knowing the answer to.

“Marco, I recently received a tax assessment notice in the mail and it showed my condo value has gone down since I bought it earlier this year. But I'm seeing condo prices in the area are increasing. Should I appeal to the tax assessor’s office to increase my tax assessment to be more in line with recent market sales, as I'm afraid this might hurt my condo's value now and in the future? I realize this might mean my annual taxes may go up, but I'm just not sure what is best.”

Great question!

Bagley Lofts Wins Design Award

Weber + Thompson, the architect and interior designer for Bagley Lofts in Wallingford recently won the International Making Cities Livable award for this project.  W+T was able to turn this challenging site into a successful loft project in Wallingford. The project was awarded for a few reasons:                                                        

• Strong intergration of the project's commercial and residential components.
• Successful parking solution and finely detailed facades.
• The project design appropriately reflects the scale shift between adjacent structures.

The condo was completed in 2006 with 43 lofts units and 3,300 square feet of retail space. Homes at Bagley Lofts range in size from 740 to 1,400 square feet. There are three types of units: studios, or standard loft homes; one-bedrooms, which consist of a loft with a separate alcove for a bed or an office; and two-bedrooms, which have a separate bedroom in addition to the loft space. The interior features concrete floors, tall ceilings and warehouse-style windows. Folks appear to really like living there; currently, there are no resale units on the market.

Some other W+T work also include 1521, 2200 Westlake and Cristalla.

-About Wendy