On December 12th, Jake Whittenberg of King 5 News reported on the “condo conundrum” in downtown Seattle, as the city continues to experience a severe inventory shortage despite rising demand for in-city homeownership. It’s “hard to imagine a shortage in this environment,” Whittenberg says, as he showcases a graphic displaying NEXUS Condominium Tower, one of few projects currently under development in the downtown core that is being offered for sale.
Why the lack of condominium options? Whittenberg references the stringent condominium laws and regulations that make it easier for condo buyers in Seattle to sue developers for defects than elsewhere. Given the risk, many developers choose to invest in apartment buildings for a faster return on investment. Quoting statistics provided by Realogics Sotheby’s International Realty, Whittenberg notes that 94-percent of the 27,000 housing units added to downtown Seattle in the current decade are for rent and not for sale. The headwinds to condo development are further explored in a joint report by Realogics Sotheby’s International Realty and Kerry Bucklin of Bucklin Evans Law, a condo attorney representing developers and expert on the Washington State Condominium Act.
Dean Jones, President & CEO of Realogics Sotheby’s International Realty tells Whittenberg that the only solution he sees is to reduce the headwinds developers face in getting product and to consider reducing the cost of entitlements to entice developers.
A graphic shared by King 5 News showcases just how much of an impact the shortage has had, given the number of condo sales experienced in the past three decades. In 1999, there were 2,141 condo sales. That number increased to 3,404 in 2008, but so far in 2017, just 355 condos has sold. Whittenberg also references numbers supplied by Realogics Sotheby’s International Realty that indicate there are just 20 condos currently listed as active in Seattle offered at under $1 million, with just 7 under $700K. To be sure, the median asking price of available condominiums in downtown Seattle is $1.399 million, according to the Northwest Multiple Listing Service.
