This article first appeared in Realogics Sotheby’s International Realty’s 2023 Forecast Report. To get your digital or print copy of this comprehensive look at the Pacific Northwest’s ever-changing residential real estate landscape click here.
The new year once again comes with a new set of challenges for housing development. Construction pauses during the pandemic, combined with increasing development costs and material supply delays, have tied up development equity, resulting in a flatlining of more condominium supply. Most proposed condominium projects have converted to apartments, others paused, and no developer has announced a new project groundbreaking anytime soon. This lack of new product is making for-sale new condominiums inherently limited, and ultimately, valuable.
Right now, developers are pausing but economists are beginning to signal that the market has finally adjusted, and the capital buyer investing today will experience a higher probability of equity growth.
In Seattle, it takes a minimum of five to seven years from design to occupancy to deliver a high-rise condominium and until housing scarcity pushes prices up and projects begin to pencil in again, what you see is what you get.
Against all odds, Daniels Real Estate is delivering Graystone this summer because we have always been bullish on Seattle and urban home ownership. We have been developing catalytic projects for over 40 years during every economic cycle, and one thing remains constant: Seattle is home to pioneers, innovators, and the creative class.
Life is springing back, and the urban charm is returning to Seattle. Workers are returning, and people are moving on and moving in. Those who bet on Seattle will be rewarded. And Daniels Real Estate is doubling down on its commitment to urban homeownership in the Emerald City.
Condominium development is not easy in the State of Washington—especially over the last four years—and 2023 will have its challenges. But we firmly believe that urban homeownership is essential to the vitality of any city. If the pandemic taught us anything, it’s that urban communities depend on long-term relationships, both residential and commercial, to look after each other to create social capital.
This summer, Daniels Real Estate will deliver 271 condominium homes on First Hill, a neighborhood that has been a “century in the making” as Seattle’s first neighborhood. We purchased the site because of its unique location along heritage tree-lined streets, adjacency to landmark amenities, and zoning that enabled us to include a waterfall parklet rather than ground level retail. The rooftop amenity penthouse features mountain peak views in all four cardinal directions.
The housing market has shifted but we are still experiencing the greatest amount of amassed home equity in modern times. The unprecedented equity makes the coming market fundamentals different than those in the past, but it should also make buying, whether a first condominium home or a right-sizing investment, key to your real estate goals.
The first quarter of 2023 will be the opportunity of a lifetime. While the market right-sizes and prices bottom out, those who purchase in 2023 will be amassing unprecedented equity in an urban housing market that won’t see anything new for some time to come. The fact is that many homes will be sold well below replacement costs.
Timing the market is now—and Graystone is priced to meet the market in 2023.