The condominium shortage is officially worse than it’s ever been in King County, as a lack of new construction and increasing demand continue in Seattle and the surrounding areas. As a recent Seattle Times article outlines, condo prices are rising even faster than single-family homes, with little relief in sight as developers continue to build apartments for rent rather than condominiums for sale. Looking at data from the past two decades, King County has averaged roughly 2,000 active condos on the market this time of year but now “it’s down to about 350, a record low.” Conditions have pushed the average sales price of a condominium up to just over $450,000, an increase of approximately $150,000 over three years.
Reporter Mike Rosenberg says the “severe condo drought” is effectively “depriving both first-time buyers and downsizers of a cheaper homeownership option that’s common in other pricey cities.” While last month there were just five condos priced under $500,000 on the market in Seattle, the article says New York had nearly 400 and Miami had 560. Even another expensive West Coast gateway city, San Francisco, had 24.
Of the 75 major projects currently under development in downtown Seattle, just 3 will offer condominiums. Why the overwhelming preference for apartments? Given the state’s extensive laws and restrictions placed on condominium development, “apartments are simpler and just as profitable,” so many developers take the “easy road.” RSIR explored Seattle’s lack of condominium supply and the difference in other cities such as Vancouver in a recent blog found here.
As Dean Jones, President & CEO of Realogics Sotheby’s International Realty tells the Times, “We are incubating thousands of well-heeled, upwardly mobile, equity gain-seeking millennials who are paying rents that look like mortgage payments, yet there is no product they can buy. Our condo market has missed an entire (construction) cycle.”
Skyrocketing prices continue to plague more than just in-city condominiums, as the Times reports that prices reached $851,000 on the Eastside with a “12 percent-year-over-year increase” which “includes a 33 percent jump in the area south of Interstate 90, and a 27 percent rise on Mercer Island.” Other markets also saw sizable gains, as Snohomish County median prices increased 11.3 percent compared to last year, and Pierce and Kitsap counties saw increases of 7.5 percent and 9.6 percent, respectively.
Though market conditions may seem daunting for some would-be buyers, Realogics Sotheby’s International Realty recently reported on condominium presales as an attractive alternative to those that can plan ahead, to avoid the competition within the heated resale market. Explore more condominium stats and the benefits of presales here.