There seems to be a lot of million dollar condos in Seattle that have been on the market for over 180 days...is this representative of the market?

Asked by Daisyk, Oakland, CA Fri Jan 7, 2011

Or am I miss reading things and there's actually a high demand for luxury condos right now. Conversely, how's the buying/selling for homes under $700K, is there comparatively more movement?

Here are a few condos that I looked at:
http://www.trulia.com/property/3002586247-737-Olive-Way-PH1-…
http://www.trulia.com/property/3011622993-516-Yale-Ave-N-400…
http://www.trulia.com/property/3033438361-1521-2nd-Ave-Seatt…

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13
Casey Walvoo…, , Kirkland, WA
Fri Jan 7, 2011
Daisy,

I used to practice in the Bay Area (in Seattle now) & still follow your market. Seattle is 6-12 months behind the Bay Area's recovery, particularly at the high end. Also note our high-cost conforming limit is not $729K, but $567K I believe. Therefore we have fewer buyers who can qualify in the $700-$900K versus SF.
2 votes
David Sprague, , Redmond, WA
Fri Jan 7, 2011
Seattle real estate EXPERT David Sprague - Dear Daisy K- the answer to your question is two fold. The Seattle condominium market over $700K has been slowed due to the difficulty in qualifying for a mortgage. Current FHA guidelines allow a mortgage under $565k (loan amount) with a little as 3.5% down. Any loan amount over that requires a whopping 20% down. This has slowed activity in the market over the $565K loan amount benchmark. Currently if you qualify for a loan over that amount (jumbo loan) the market here is considered a buyers market.
Under that amount the availability of a mortgage is easier. The effect is that more properties in the $600K and under bracket are selling at a higher rate.
2 votes
The Cascade…, Agent, Issaquah, WA
Sun Jan 9, 2011
All correct below. The higher the price, typically the longer to sell. Also, foreclosure and short sale competition play into those factors.
1 vote
Rob Graham, Agent, Seattle, WA
Fri Jan 7, 2011
Daisy K,

Numbers don't lie so I did a little research for you.

Condos over $1,000,000

Number of Condos - 81
Days on Market - 345

Single family homes over $1,000,000

Number of Homes - 186
Days on Market - 272

By comparison

Condos between $600-$700K

Number of Condos - 28
Average Days on Market - 298

Single Family Homes between $600-$700K

Number of Homes - 102
Average Days on Market - 165

All in all the premeir market has been hit fairly hard. Buyers are looking for bargains in every walk of life, and houses are no exception. The light on the horizon is that things appear to be getting better. In 2010 home sales were up 13% over 2009. That is volume not price.

Lets all keep our fingers crossed that the trend continues through 2010.
1 vote
Mack McCoy, Agent, Seattle, WA
Fri Jan 7, 2011
The $1M+ condo market in Seattle isn't all that bad, with about a 7-8 month supply of listed inventory, and of course some new construction that hasn't sold out yet. In the $500K-$700K range, there's about a six month supply, with the same conditions.

All in all, it tends towards a buyer's market, but it's not overwhelmingly so.
1 vote
Karen Mcknig…, Agent, Kirkland, WA
Fri Jan 7, 2011
Dear Daisyk,

The best way to answer your question is to give you some statistics, because demand, prices, and "movement" vary by neighborhood. The most important statistic to look at is the "absorption rate". For properties above $1 Million, in King County, where Seattle is located, the November absorption rate is 6.8%. That is a low absorption rate, which means that prices could continue to decline in that $1 Million plus niche. Bottom line, is this is the best time to move up to a more expensive home.

At my website, http://www.karenmcknight.com , you can see Seattle area Market Statistics if you click on the Market Statistics button on the left.

Under $700,000 there is more movement. In suburban Bellevue and Newcastle, for example, the average year to date price for November, 2010, is around $650,000. In Bellevue, that is a 32% increase from 2009 and in Newcastle, that is a 1% decrease. In Central Seattle the year to date average price as of November, 2010 is $685,714 and that is a 12% increase. In Seattle proper, the average price is $467,282 and that is a 3% increase from 2009.

As of November, 2010, Seattle has a 6% increase in number of sales, so that indicates movement. These facts by themselves, however, are not very helpful, because it is important to know what you are wanting to accomplish and on what area of Seattle you are focusing.

For example, if you are moving from San Francisco to Seattle, what you want to look at is where each market is going. I think San Francisco is fairly strong. I know that Seattle is, in various studies and depending on the perspective of the study, ranked in the top five, or ten, or one for recovery. So, if you are buying in Seattle, it would be smart to buy now while prices and interest rates are relatively low.

With the low prices and low interest rates, single family homes are the most affordable they have been in a generation. What is more important to watch than prices, is interest rates. With the mortgage bond market weakening and with rates at historic lows, interest rates are certain to go up. I can send you some charts that demontrate this if you'd like. Just know that a 1% increase in interest rates nullifies a 10% price reduction.

Historically, the Seattle economy follows the airline industry. Boeing is doing well right now and commercial plane orders through 2010 increased. So, the most important facts to consider are, what are your personal goals. You make money on your "buy" in real estate. Seattle has gotten more diversified with medical research and software technology over the last 20+ years and those two industires are booming, along with import and export which are a big part of the Washington, and Seattle economy.

In Seattle proper, the average price has increased 3% from January to November in 2010. Prices vary by neighborhood. In some Seattle are cities, the average price decreased as much as 30% and in some it increased as much 13%. Over all , in the Seattle metropolitan area the average price increased 3%.

I know this is a random smattering of facts, so if you want a more targeted answer for your specific situation, I'd be happy to visit with you, or you can feel free to email me.

Warm Regards,
Karen
Web Reference:  http://www.karenmcknight.com
1 vote
Laurie Way, Agent, Seattle, WA
Fri Jan 7, 2011
Hi Daisyk! There were 29 condominiums over $1M in Seattle that have sold in the last six months. Their Average Days on Market were 135 days. The median Sold price is $1,913,981. . There are currently 82 Active over $1M. Their Average Days on market is 345. Their median list price is $1,636,500. That would make the "Absorption Rate" 35%. Seems to me if priced correctly they are selling fairly quickly.

The home "under $700" is a little harder to analyze unless you pick a geographical area a little smaller than just Seattle. Plus, price range should be more concise to really see what is happening that is more specific to your interests. Let me know if I can be of more help!
1 vote
George Moorh…, Agent, Bellevue, WA
Fri Jan 7, 2011
In an attempt to not be redundant to the first two responses from Casey and David, the overall market for higher end homes and condos have seen a significant reduction in prices, 25%-37% depending upon whether you are in Seattle or the Eastside. Add to things a lack of confidence in the market, significantly smaller pool of buyers in this price point, bank owned properties which normally sell between 15% to 25% below market pricing, and as David mentioned, as much tighter set of guidelines for luxury home financing. All of these things put together are the main reasons why you will see market time much longer than traditionally seen, and pricing which takes us back to 2003 and 2004 pricing.
1 vote
Brett Frosak…, Agent, Seattle, WA
Fri Jan 7, 2011
The answer is really simple. Yes the market overall is down. Yes there are fewer buyers in the high end market. The biggest reason is that they overbuilt high end condos at the peak of the market. It use to be the case that when you build a tower, you build it to accommodate the whole market with a mix of studios, one, two, and sometimes but rarely three bedroom homes. There was a floor premium added with each floor yo went up. by the time you got to the top they made penthouses or larger units on the top one or two stories.

When the market peaked, in Seattle they were building 1521 2nd, the Four Seasons, and Escalla. In Bellevue they were Bellevue towers, and Bravern. All of these buildings were high end. This trend was unprecedented.

Escalla reduced prices after pealing off home owner requirements, their over-the-top private club. Escalla is still expensive but not near what they were expecting. Bravern is converted on tower to apartments. Bellevue towers is now in control by the bank. In Seattle, 1521 and Four Seasons are holding their position.

The lower the price of a condo or project the closer they come to the center of the bell curve of the market. When they are in that center, there are more purchasers and consequently more movement or absorption.

If you are buying. Use an agent who knows. I know.

Brett Frosaker
Broker
Columbia Real Estate Group
http://www.columbia-re.com
206-755-7858

Join me on:
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1 vote
Ben Kakimoto, Agent, Seattle, WA
Fri Jan 7, 2011
Hi Daisy,
What you're seeing the the residual impact of the luxury condo building boom between 2006-2009, with approximately 10 new upscale high-rise buidlings concentrated around the downtown area. Unfortunately, Seattle' condo market stumbled in 2007 and remains depressed with reduced demand, the result being hundred's of luxury new condo units still available. However, the inventory is being sold, albeit slowly. Fortunately, the market crash and lack of construction financing put a stop to new construction for now. We probably won't see another completed luxury condo building until 2014, so that'll provide adequate time for the market to absorb the current unsold inventory.

Pricing for luxury condos have been declining, which will likely continue for the time being. Olive 8, which auctioned part of its inventory in 2010, is expected to announce new pricing levels shortly.

You'll really see the most movement in the sub-$350,000 price point. At this level, there's a larger pool of condo buyers (first-time and 2nd homes) that were driven in part by the tax credits.
1 vote
Ray Akers, Agent, Seattle, WA
Fri Jan 7, 2011
The real estate market is ever-changing. Since November, we've seen a surge in sales that has had the experts scratching their heads, trying to figure out what it means.

The evidence suggests the Seattle area real estate market is showing early indications of a recovery already underway. (Of course the experts have been forecasting a rough start to 2011 and a possible recovery in the latter part of 2011.) Personally, I've been increasingly busy since last October and it feels like a genuine recovery happening right now.

Regarding your question about market activity under $700,000; you should expect to see more sales in all price ranges in 2011. Over the last couple of years we've experienced a significant loss of value, roughly 30%, and the lion's share of sales have been hovering at the bottom of the market. Now, we're seeing more sales in all price ranges, especially in the closer-in neighborhoods.

Historically, the month of March records a large volume of closed sales. That means the sale happened earlier, possibly January or February. Based on the newest data, seller's should be getting their properties listed right now. It looks like there's a real estate recovery underway!
1 vote
Tonya Brobeck, , Everett, WA
Sun Jan 9, 2011
Generally speaking your higher price range will always be on the market longer than the lower priced listings. It's not necessarily a representation of the market, it's the fact that the selection of buyers qualifying or being able to afford 1million dollar homes is less than the pocket of buyers who qualify or can afford 300k.
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Jan 7, 2011
Not many families can afford $1 million + homes these luxury homes will be on the market much longer than a $150,000 house.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
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