Despite Seattle’s inventory explosion (due to unsold homes sitting on the market) and substantial home price declines in Q2 2018, according to Redfin, Polaris Pacific thinks Seattle is unstoppable. Polaris Pacific, a West Coast leader in high-density real estate sales and marketing, is now representing 766 condominiums in four Seattle-based projects.
“Eight years of no supply has led to a pent-up demand for condominiums here,” said Josh Nasvik, Polaris Pacific’s Seattle Regional Manager.
These projects include:
- South Lake Union – 113 units
- Mira Flats in Downtown Bellevue – 162 units
- The Emerald – 265 units near Seattle’s Pike Place Market
- 8th and Cherry Street on First Hill – 226 units
The region’s condominium median sales price is currently $610,500, an increase of +16.3% y/y. (This compares to a median price of $669,000 for a single-family home in Seattle, a +12.1% increase in Q2 2018.) High-rise prices are now $1,010/square feet, an increase of +23.8% y/y.
Polaris Pacific is also considering a 21-story proposal in Bellevue, a 41- story building near the Space Needle and three nearly finished buildings that will open as condominiums, not apartments as originally thought.
Why have condominiums been so scarce in Seattle during these last eight years? In 1989, the Washington State Condominium Act was passed to protect condo buyers from developers trying to cut costs by using poor building materials and poor construction practices. Some say this Condominium Act has “overprotected” buyers with unattainable warranties and severe restrictions in buyer deposits.
Inadvertently, the Condominium Act has generated a tremendous amount of litigation…the Act simply made it easy for buyers and attorneys and insurance companies, and you name it, to sue for building defects.
Now, developers have decided that building condominiums are worth the risk of litigation due to buyer demand. Significantly, the apartment market in Seattle has softened due to too much supply and rental rates dropped by 57% in July 2018 compared to rates dropping 38% in July 2017.
Obviously, Polaris Pacific agrees with the builders and developers. The company expanded to the Emerald City two years ago in anticipation of a condominium boom.
Time will soon tell if Seattle and Seattle’s condominiums in market are unstoppable.