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Monday, January 15, 2007

Who's Buying Condos in Kirkland?

We're used to hearing unsupported claims that "young professionals" and "empty-nesters" are providing the bulk of the demand for condos. Well, finally we have a first-hand account of who's actually buying condos (in downtown Kirkland, anyway).

Amie Lynn is the community sales manager for Miller Condominium Marketing, which recently opened The Boulevard, a 119-unit condo building at 598 Central Way, and 128onState, a 124-unit building at 128 State St.

She said most of the two-bedroom condominiums — which make up about a third of the stock — sell to empty-nesters who are downsizing into smaller, lower-maintenance places in more urban areas.

"They can afford the higher price points because they had great appreciation in their last house," Lynn said. "More and more people want to spend their weekends not maintaining a home. They want to enjoy what the city has to offer."

Retirees, too, have purchased condos downtown as second homes, Lynn said. They winter in California or Arizona and come back to Kirkland in the summer to visit old friends and family.

The remaining studios and one-bedroom condos go to single people ranging in age from their 20s to their 50s, Lynn said, though the majority are in their 30s.
So it sounds like "young professionals" are in the minority in Kirkland. I can't say I'm surprised that "most" of the condos are selling to people that are actually downgrading their home. When prices spiral upward out of control like they have lately, young people have a hard time buying, and existing homeowners looking to upgrade find that they can't even afford to trade up.
What's not springing up downtown are young families — the condominium units that are big enough for couples with children are typically more expensive than they can afford. But Lynn said that's something that could be changing over the next decade.
Whoops! Looks like the writer let a little bit of truth slip in there. Maybe they figure that they can get away with implying that prices might actually be headed down soon because the King County Journal hasn't got anything to lose.

(Erica Hall, King County Journal, 01.15.2007)

3 comments:

Doug said...

Interesting. A friend of mine (in Billings) who agrees with my bearish videos still insists that downtown condos are a good idea.

Something about the "urban core" and young families needed to make the downtown thrive. Sounds like Kirkland has the same idea but isn't quite seeing it materialize.

jpsfranks said...

I have the reverse opinion, that downtown condos may fair worse than other regional RE. I'm generally bearish but if I had to predict I would say that SFHs will see stagnant prices for several years, whereas condos could see some significant short-term depreciation.

It's hard to walk a block in downtown/Belltown/South Lake Union/Capitol Hill without stumbling on a new condo project. I simply don't see how all these units could possibly be absorbed.

Here's an article from the NY Times today that focuses on the other Washington, but I think it may hold true for many cities.

homes said...

From recent experience I can confirm the upper end condos being sought after by downsizing boomers. On the lower end there is slim pickin's...