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Tuesday, June 27, 2006

Downtown Condos For Everyone... Psych!

Seattle Times columnist Nicole Brodeur points out the downside to the city's apparent condo-rich future—the condos are pretty much only for the rich.

I like the idea of an army of spit-shine new residents invading downtown. It's fewer cars on the road, a nod to our healthy economy and hints at the world-class city we've always wanted to be.

But I don't see any place for the middle class. Any firefighter, teacher or store manager (we're what the city calls its "work force") will have to borrow a jacket to be seated.

One exception is the "green" Veer Lofts at South Lake Union, which start in the mid-$200,000s. With their laminate cabinets and concrete floors, the industrial-style lofts are considered "entry-level."

So of course it's like scaling a mountain to get one. Potential buyers must attend an informational overview, get pre-approval from a lender, fill out a lottery card and then cross their fingers.
...
...So while some 11,000 new downtown condos are in the works, a fraction of that will be apartments for the working class.

I guess that's what it means to be "world-class." Like New York and Chicago, Seattle is becoming a place of haves and have-nots, where the affluent enjoy the banquet of downtown life while we mortals can only window shop.
It seems like most of the large employers with lots of well-paying jobs aren't even located downtown anyway. Microsoft, Amazon, Boeing... Is there really enough demand in the downtown core for all these high-priced homes? I guess we'll see as these projects are built—or not built, as the case may be.

Update: Condo enthusiast Matt over at Urbnlivn shared his take on the matter yesterday.

(Nicole Brodeur, Seattle Times, 06.25.2006)

10 comments:

biliruben said...

I don't get it either. Why would the leisurely rich come here when there plenty of places with nicer weather where they can buy top-end condos.

So these must be for the working rich, but there just aren't that many of those.

We certainly have our share of lawyers, architects, biotechies and the residual .comer, as well as Group Health and the Fred Hutch.

There may be a couple of realtors, mortgage brokers, and developers downtown too. ;)

But I just don't see that many jobs that provide silly-money to spend on high-end condos. The health sciences just don't attract that many high-end posititions, and from my experience they aren't into the status associated with downtown living. Mostly family types that are conservative with their money and thinking about a comfortable retirement and a quiet, family-oriented neighborhood.

Color me confused as to who the buyers of all these condos is going to be.

marin_explorer said...

"...So while some 11,000 new downtown condos are in the works"

Where are these 11,000 "wealthy" Seattle condo buyers coming from? The same was said about many inflated coastal markets, with the assertion the wealthy will somehow absorb overdevelopment. Just look at San Diego or Las Vegas. They built--but did those "wealthy" buyers come?

There are only so many "wealthy" people to live in condos (cough, cough). That's a worn-out pitch from condo "investment" seminars, now defunct but somehow still ringing true to hopeful ears.

Anonymous said...

I agree that it's certainly not good to price eveyrone but the richest out of downtown. However, I'm continually surprised at how many "truly" wealthy people there are. Sure, some may be "upper middle class" people stretching themselves too far to get into these units, but there is a depressingly large number of wealthy people in this country that can afford two multi-million dollar homes.

These people are less than 10% of the population, but hold 40% of the wealth (just read that recently).

This doesn't mean I think there's an unlimited "well" of people waiting to buy $1m condos. It's just that 11,000 units isn't as much as it might seem, given how many people there are moving into Seattle or buying second homes to be near their kids, etc.

At any rate, I also don't particularly care if big condo developers go bankrupt through over-building or have to sell many units for a loss/zero profits :-)

Anonymous said...

Apparently the wealthy have been buying up properties like this in cities all over, so why not add to the collection one in Seattle?

It's like having your own private hotel room in the city.

From a tax standpoint, I can see why the city would want this - units that bring alot of revenue, but don't use much in services.

It has the feeling of a fad, so I doubt these places will remain unused forever, and the buyers probably won't sweat selling them at a loss.

emcityjill said...

Perhaps it's not families buying condos. Perhaps it's the first blush of bamy boomin' fledgling retirees who, taking advantage of soaring prices, sold their house and traded down to a smaller place with less upkeep and a pool for the grandkids.

Now they have a big chunk o' ching in the bank, a condo downtown, and they eat out every night because: #1 They can afford it. #2 Construction of the Whole Foods in South Lake Union isn't finished yet.

Well done, B Boomers~! I'd probably have done the same thing.

Or maybe it's the young'uns who are freaking out because they feel the need for a foot in the door to RE, and they're not willing to wait to see if prices will come down.

IMO it's probably both groups.

Anonymous said...

Remember you don't have to be wealthy these days to "buy" an expensive condo.

Although these condos cost a lot now, the same units may be cheaper in the future. These units could very well become the middle-class housing that Seattle needs.

Anonymous said...

I used to have a friend that sold jets to the wealthy. His favorite saying was the he "made millionaires out of billionaires". Well, I think there are plenty of millionaires buying million dollar condos here and elsewhere - problem is they're on their way to rejoining the middle class!

Anonymous said...

You shouldn't underestimate the number of rich people. After the Asian financial crisis and the subsequent recession, my friends reported that the high end restaurants in Hong Kong were as crowded as ever. When you grow up in upper middle class, there is no college loan to worry about and that really helps. With two people making $140k - 200k combined and little debt, most condos in downtown are well within reach.

Anonymous said...

It can't help but try to dispell one myth. When I see "architect" and "working rich" used in almost the same sentence, I get frustrated. A starting architect makes about the same as a starting teacher. There is no way we can afford a downtown condo!!

Anonymous said...

Anon 8:27-

I wa in Japan during their long deflationary spiral. It wasn't til years later that I even knew they were in one.

No way you could tell while you were there. Things seemed hunky dory.

It's one reason that I can't figure out why people are so "scared" of deflation.

I don't know, maybe they weren't as big of shopaholics as they'd been in the 80's but the stores were still full.

You got me.???