Let’s talk Seattle condos
June 24, 2010 by Erin Schedler · Leave a Comment
Residential homes have been one thing, but condos have been another. In 2005/2006 Paul Allen and few other major developers got to work and there was a HUGE influx of new condo buildings in downtown Seattle, Belltown and South Lake Union. When the market crashed, we were left with a lot of inventory – especially high-priced inventory.
So what now? A lot of these new buildings have been turned into apartments or a new hybrid: apartment/condos. In these projects you can either lease or own. I’m not sure what this will mean for ownership, as the “rules” are new and unclear. My guess is that the developer (or “declarant”) will probably want to hold a minority share in these projects so it’s not liable for the majority cost. I also be they won’t want to be owners long. As long as a developer is responsible for 40%+ apartments in the building, the 60% single owners will probably want to use that position to get as much money, proactive maintenance, and repairs out of the building as possible.
The other trend I’m seeing in condos is a LOT of special assessments and siding repairs. You’ve probably seen Charter Construction signs all around town. They’re a really great company, and are commissioned to “fix” siding problems that builders did wrong from square one.
Buildings constructed in the boom are now 3-5 years old, which is the typical term for the initial builder warranty. My guess is that owners are recognizing the upcoming expiration of these warranties and looking at the construction with a fine-toothed comb while they have that “protection”. Once the warranty is up, the owners will be wholly responsible for any repairs and maintenance for the building.
Bottom line: I think the inventory is much lower than it was 2 years ago. Much of it has been sold (at a discount) or transitioned to apartments. There are still a number of units listed, but the pricing of these properties has been so volatile that no one is really sure what to pay for them. I think it will still be a year or two before these prices “shake out” and stabilize.
