As a recent Crosscut article proclaims, “Don’t call it a comeback, but condos are returning to Seattle.” After a cooldown following the market correction in 2007, condos are now a hot commodity in the Emerald City, as Josh Cohen of Crosscut references high demand, with buyers waiting overnight in long lines to secure unit reservations at projects such as NEXUS, which opened for pre-sales in 2016. Increasing demand amidst few new condominium projects has driven prices up and market experts are hoping to add more inventory to the market.
The article says that “on paper at least, condos are becoming an increasingly sound investment when compared to apartment rentals” as rental values flatten and condo values are “appreciating 16.5 percent year-over-year.” And though condos have traditionally served as an affordable path to homeownership for millennials, first time buyers and retiring downsizers, that hasn’t been the case in Seattle, where stringent state laws and high costs for land and construction are placing limits on developers, who are electing to build mostly luxury high-rise offerings.
Just eight years ago in 2010, Crosscut says “the median condo price in Seattle was $372,000 with more than 50 condos available for less than $250,000 and 200 that cost between $250,000 and $500,000.” Today, the median price for a condominium in Seattle is $527,750, an 11 percent increase compared to June 2017.
Experts say there are two main roadblocks preventing more affordable condo development. First, many have called for changes to the Washington State Condominium Act, which was established in the 1980s to protect condo buyers, but has since devolved into an almost surefire guarantee of condo board lawsuits. In addition to the Condominium Act, Crosscut points to zoning, as “condos are only allowed in a relatively tiny sliver of Seattle.” Currently 49 percent of Seattle is classified as developable land, but just 8 percent of that is zoned for multi-family housing projects. When the city introduced the Housing Affordability and Livability Agenda (HALA), just 6 percent of single-family zoned areas were approved to become denser.
“Meanwhile,” the article outlines, the condo market is slowly loosening: “the latest market report from real estate group Northwest Multiple Listing Service found the number of condos for sale in Seattle – both new and previously occupied – up 139 percent in June 2018 over the same time the previous year,” with inventory up by 72 percent.