Local condo projects slashing prices to attract buyers

Several large, luxury condominium projects in Seattle and Bellevue are finishing construction or are recently completed. The problem is, the down turn in the real estate market has caused sales to be non-existent or extremely slow. Of the 539 units in the Bellevue Towers, only 43 have closed. To stimulate sales, they have slashed prices by an average of 20% at the eastside project.

Vulcan's newest building, Enso, is nearing completion and they are finalizing their pre-sale commitments as well as doing their best to attract new buyers. While Enso won't release their price adjustments to the press, agents were invited to an open house where we were informed some units are now reduced as much as 25%. It's nice to see they are being realistic about the market and their pricing should help move much of their inventory.

On the other end of the spectrum, Olive 8 is refusing to reduce prices and claims they will wait out the market. The developer seems to think the Hyatt hotel that makes up the first 17 floors will carry the building through this down market. Perhaps they should rethink this as only 28 of 229 units are closed.

Read the full article here.

King County home sales in June highest since October 2007

Homes sales in June were up 4 percent from a year ago in June 2008. This is the first increase since the height of the market two years ago. The county hasn't recorded this many sales since October of 2007. Total sales in the southern portions of the county were actually down, while Seattle sales were up 11 percent!

First-time buyers were leading the charge on much of this market activity. But the article from the Seattle Times points out what I've said will happen all along. The people selling to the first-time buyers will eventually buy their next home and create a trickle-up effect.

Prices are still down, however. Median single-family home prices in King County were down 12% in June from a year ago.

Read the full article here.

Backyard Cottages in Seattle?

Here's an interesting article from the Seattle Times regarding a current proposal from the Seattle City Council. If the council approves the proposal, homeowners throughout Seattle will be allowed to build backyard cottages up to 800 square feet. While attached mother-in-law style units have been allowed since 1994, the city more recently explored the idea of allowing property owners to develop what they're calling 'backyard cottages'. The technical term for such a structure is called a 'detached accessory dwelling unit'.

In 2006, the city decided to experiment with the idea by allowing only residents in Southeast Seattle to build these cottages. To this point, only 17 have been built. While the idea is meeting significant Resistance, a city survey reveals that neighbors either like the units or don't notice them.

In general, the city views this as an affordable and creative means for residents to downsize or allow family to live nearby. It also adds density without major development. Opponents of the plan suggest that the proposal in-effect rezones the entire city to multi-family zoning.

Read the full article here.

Seattle sees growth in city

Census data recently released reveals that large cities are now growing faster than other parts of the nation. This reverses a decade-long trend of urban sprawl. The Associated Press article suggests the growth in large cities is due to the economic crisis and housing downturn. With people making less money and not being able to sell real estate as easily, they are starting to remain in big cities.

The article claims that Seattle is one of the large cities seeing faster growth in large part to foreign-born immigrants who moved and stayed here.

It goes without saying that growth in the city of Seattle will eventually help our real estate market. More people equals more demand for housing. More demand leads to appreciating values.

Read the full article here.

Mortgage rates inch upwards

Home mortgage rates crept a bit higher this week with an average rate of 5.42%. This is up from a week ago at 5.38%. It appears (at least for the immediate future) that our super low rates in the mid to upper fours are a thing of the past.

An interesting phenomenon seen in in some potential buyers is the idea of holding out for that ultra-low rate of 4.78% seen a few months ago. While 5.5% is extremely low when looked at from a historical perspective, some buyers are wishing for the rate that they missed. People who bought in the 1980s will be happy to inform anyone who will listen that 5.5% is amazing compared to the double digit rates they faced a few decades ago.

Fears of inflation could be another reason rates will only continue to creep higher.

Read the full article here.

Boeing's 787 delay bad for local real estate?

When looking ahead to the outlook for Seattle area real estate in 2009, 2010 and beyond...one must look at many different economic factors. I don't pretend to be an expert on other industries outside of real estate but the recent news regarding another delay on the 787 Dreamliner made me pause for a second.

Boeing certainly doesn't drive our local economy like it once did...however it is still a major player for employment around these parts. I would keep your eyes on this 787 project because any bad news for Boeing in this already difficult economic climate could have ripple effects on housing.

If Boeing loses too much money because of these delays or future orders for this plane are rescinded because of the long timeline then it's possible layoffs could follow. No jobs leads to selling houses or people not buying houses...not something our market needs.

Read full article here.

Affordable Seattle neighborhoods?

This article is a few weeks old but I'd still like to share it. In the article, The Seattle Times discusses serious price adjustments from the height of the bubble to now. Many average income earning families are now able to afford homes closer or in the city limits of Seattle.

Low interest rates, lower prices and tax credits are all allowing buyers to pursue their piece of the American Dream.

Read the full article here.