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Thursday, April 05, 2007

"Re-Sales Galore" in Local Condo Projects

Local condo enthusiast Matt made an interesting observation in a post on Urbnlivn Tuesday. Apparently in many of the recently-opened Seattle condo projects there are, in Matt's words, "re-sales galore." 33 units at 2200, 19 at Cosmo, and 5 (of 48) at Meritage. Plus, anyone who bothers to spend a little time searching on Craigslist can see quite a few more units in these projects up for rent.

I thought that all these projects had "strict limits" requiring that units be owner-occupied, which would supposedly eliminate flipping. It would appear that these rules are being disregarded.

So much for all the alleged protections against speculation in the local condo market...

(Matt Goyer, Urbnlivn, 04.03.2007)

19 comments:

matthew said...

The condo boom is coming to a grinding halt. The funny thing is that a ton of these projects aren't slated to be finished until 2008. Seattle is following in the footsteps of Miami and San Diego.

refractedthought said...

Last march of the flippers.

Or is that last March of the flippers?

refractedthought said...

Oh, another good one from the comments, someone is trying to rent a 2-bedroom for "only $3,800/month."

BWAAAHAHAHAHAHA!

BanteringBear said...

""Re-Sales Galore" in Local Condo Projects"

Mmmm, the pungent smell of barbequed flipper. Never buy a condo. Ever. If you can't afford a house, then rent a condo or apartment, but don't buy one.

rolandovich said...

There are at least 10 currently pending projects on Cap. Hill and several more that are in the design phases. News articles are already using the G-word.

Over the weekend, I saw my first abandoned project in the neighborhood as well. Between Republican and Harrison on Bellevue you will find a fenced off old apartment building. Hanging on the wall is a a glossy advertisment extolling urban living in a vibrant neighborhood.

Next to the sidewalk, there is a for sale sign extolling a great investment opportunity in which it is expected that each unit will sell for somewhere near $700,000.

Only time will tell....

MisterBubble said...

Also interesting -- chris' speculation about rent increases:

"Rents typically track inflation, but have just returned to the year 2000 level. so look for big rent increases if we have a soft landing from the housing market."

Given that vacancy rates were less than 1% in many neighborhoods in 2000, and Seattle was in the clutches of the dot-com bubble, you have to wonder what these landlords are smoking.

Grivetti said...

The more condos the merrier, glut 'em up, build build build, I say.

I remember being on the PI soundoff board and there were a ton of condo-owners (one in the 2200 Westlake flagship) telling me how only a small amount of units were available for investment...

Econe did some research on that and found 25 units there for rent...

hmmm... yeah. Apparently there's loop whole's big-enough to drive Whole Foods delivery truck through.

meshugy said...

The condo boom is coming to a grinding halt.

Sorry Matthew...it's actually exploding right now.

March #s are up:

YOY 6% increase in closed condo sales and 12% increase in price!

Condos sales March 2006: 833
Condos sales March 2007: 889

Condos price March 2006: $249,950
Condos price March 2007: $281,000

EconE said...

Sorry Matthew...it's actually exploding right now

yup those 4-600k 1BR's certainly are flying off the shelf...eh?

Condos price March 2007: $281,000

have you seen what $281k gets you lately? Sounds like the median sales price is faaaaaar below the median asking price.

but then I'm all for people shoehorning themselves into overpriced studios.

I'd ask for the inventory statistics Shuggy but I already know alot of what is being hidden.

I do however know that they don't hide sales.

LOL.

matthew said...

Mikey,

The small increase in sales does not makeup for the giant leap in inventory.

flotown said...

Rent data from several of the largest landlords in town supports the theory that rents will rise. ...Harbor, BRE, Security, Lorig, Vulcan are all raising rents 5-7% this year

Pegasus said...

This will probably help out that inventory problem.

bizjournals.com
Microsoft leases massive amount of Bellevue space
Thursday April 5, 5:13 pm ET


In two of the biggest leases ever in the Puget Sound region, Microsoft Corp. said Thursday it will occupy 1.3 million in two office complexes under construction in Bellevue.
The Redmond-based computer giant (NASDAQ: MSFT - News) will occupy 740,000 square feet of space in the Bravern complex in downtown Bellevue, next to the Meydenbauer Center, moving in sometime late next year. Microsoft will occupy more than 600,000 square feet in the Advanta office commons in southeast Bellevue, moving in employees by the end of this year.

The two buildings are being developed by Schnitzer Northwest LLC and will accommodate 4,000 current and future Microsoft employees.


"Microsoft continues to grow at a rapid pace across all our businesses -- software, games, entertainment, search, mobile and business applications. Adding additional work space in Puget Sound, the company's center of gravity, helps address our current space limitations and ensures that we are prepared for future growth." said Chris Owens, general manager of real estate and facilities at Microsoft, in a statement.

Published April 5, 2007 by the Puget Sound Business Journal

EconE said...

Rent data from several of the largest landlords in town supports the theory that rents will rise. ...Harbor, BRE, Security, Lorig, Vulcan are all raising rents 5-7% this year

that sounds super duper!

but.....I see TONS of specials that I didn't see last year...mainly the "first month free" deal.

so...I get a month free...basically an 8.333% discount on a year lease.

sounds like their increase is a wash at best...if really an increase at all.

Oh...what's that...they'll raise my rent at the end of the lease?

Duh!

That is the benefit of being a minimalist...I can move everything in less than 24 hours.

So...Mr. Landlord tells me that he's going to be raising the rent...I wait until the very last moment to give my notice (30 days...not a day sooner)...but only after letting him think that I'm staying.

Now Mr. Landlord has a soon to be vacated apt. that he has to advertise and refill.

Bring it on Mr. Landlord.

And don't think Mr LL will get me on any sort of deposit...I leave my units spotless...and if the LL want's to play games...I'm alllllll for it....been there done that...easy.

MisterBubble said...

I don't deny that landlords are planning on rent increases; I think that they've lost their minds if they're planning on increasing rents at twice the rate of inflation for the next 3-4 years.

They can try, but wealth does not give you the ability to squeeze blood from a turnip (especially when the turnips in question can relocate in an afternoon with a U-haul.)

Lake Hills Renter said...

Microsoft leases massive amount of Bellevue space

As I posted in the comments for another thread, the expansion is primarily to alleviate a very crowded existing campus workforce. Don't expect it to be a prelude to a huge surge in new employees.

synthetik said...

The number of rental units across the USA is skyrocketing, as predicted. Lots of supply coming on the market, driving rents down.

Of course, this won't happen in pink pony land!

uptown said...

The P-I doesn't sound as optimistic as meshugy -

King County sees more homes on market but fewer sales

The number of homes increased by nearly half in March from March 2006, according to data the Northwest Multiple Listing Service released Thursday. Prices moved up 2.7 percent -- a big drop from the double-digit increases that were common a year ago.

Closed sales were up slightly from a year ago while pending sales, which can be a better indicator of recent activity, were slightly down.

meshugy said...

Prices moved up 2.7 percent -- a big drop from the double-digit increases that were common a year ago.

Ha ha...that is obviously mistake. She's confusing MOM with YOY. 2.7% is small YOY gain but a huge MOM gain.

Prices are up 12% YOY.

flotown said...

I don't know if blood out of a turnip is the appropriate analogy. Rents in seattle, as defined as a % of income, are by and large affordable, 30% being the typical number - or at least the number used in affordable housing circles. So there probably is some upside in rent to be found.

The numbers I cite are for seattle city proper, not regional. There is a lot of job growth in Seattle ocurring and traffic makes living in town more appealing. They can't afford to buy, so...therein lies the spike in rents.

Double inflation for two years is not unprecedented historically, just like 5 years of flat/declining rents we just finished was not unprecedented.