The Seattle Condo Blog | Seattle Condos and Lofts

So far, 2012 is becoming a watershed year for Seattle’s beleaguered condo market as we’ve quietly shifted into a seller’s market seemingly overnight with a constricting inventory supply and strong buyer demand.  As a result, the remaining new construction and condo conversion projects have benefited from the market’s turnaround.

Here’s a look at the 2012 year-to-date sales activity and the current total sales percentage of the remaining major condominiums in Seattle.

North Seattle

Hjarta

Duncan Place

Downtown Core

Marselle

Olive 8

Escala

1521 Second

Four Seasons Seattle

Pontedera

Capitol Hill / First Hill

 Decatur

1111 E Pike

Harvard & Highland

Sanctuary

West Seattle

Dakota

Duncan Place (website) is the most recent condominium development to be completed in north Seattle this year. Its University District locale benefits the project since developers have shied way Northeast Seattle. Besides Thornton Place, it’s only the second new condo project completed since 2007.

The 63-unit Duncan Place soft opened a couple of weeks ago with little fanfare though they do plan a grand opening next month. So far, with just an on-building banner and a few MLS listings, they already have 5 units under contract without pre-selling.

One thing that struck me about the building is that it’s not what you’d typically expect in north Seattle. It’s clean modern design and interior space are reminiscent of condos in Belltown or Capitol Hill, particularly the corner units with floor-to-ceiling windows and open living spaces. Home features and finishes include:

• 8’6″ to 9′ ceiling heights
• Expansive windows providing abundant light
• 27 different floor plans – studios, one-bedrooms and two-bedrooms
• GE stainless steel appliances
• Honed granite countertops
• Hardwood and carpeted flooring
• A/C in 6th floor and two-bedroom homes
• Washer and dryer
• Parking (2 spaces for two-bedrooms) and storage
• Zip car availability

The building is set back from I-5 which helps to minimize traffic noise. At 4:30 pm on a weekday with the window open in a west facing unit the ambient sounds were essentially white noise. For the other three sides it was even less apparent. The developer plans to build another structure that’ll separate Duncan Place from the freeway creating a buffer.

The homes feel spacious due to their oversized windows, high ceiling heights and open floor plans. This is most notable in the corner units on the 1st and 6th floors which have 9′ ceilings. Though, a few of the studio layouts felt a wee bit cozy. Select homes have electric fireplaces and many have patios or balconies. Common amenities include a community room, courtyard and a roof top deck with spectacular city views.

Current price ranges as of 8/19/09 are:

• Studios & Open one-bedrooms – prices range from $185,000 to $230,000. Homes are between 365 to 495 square feet.
• One-bedrooms – prices range from $225,000 to $425,000. Homes are between 585 to 775 square feet.
• Two-bedrooms – prices from $499,000 to $599,000. Homes are between 810 to 1,219 square feet.

Downtown-style does come at a premium, however. While the price points are competitive, on a per square footage basis, Duncan Place is comparable to newer downtown area developments and are a bit higher than nearby Ruby and Ballard’s Canal Station. Homeowner dues also appear to match those with downtown highrises and are unevenly distributed with smaller units paying more per square foot. Based solely on the four units listed in the MLS (as of this writing), the dues for the 392 square foot studio run $.70/SF while the dues for the 1,219 square foot 2-bedroom is only $.42/SF. However, that hasn’t been a deterrence as they’ve sold nearly 10% since opening a few weeks ago.

The development is FHA approved which provides buyers with a 3.5% down payment option. The Duncan Place team anticipates most buyers will be first-time buyers and those associated with the university (faculty, staff and parents of students). Most buyers should qualify for the $8,000 first-time home buyers tax credit. Though, closing time frames could affect the eligibility of FHA buyers as a certain number of sales must be reached before FHA buyers can close on their purchases.

Duncan Place is also offering a rather unique “Move-In Today” lease-to-own program, which may be in response to accommodating FHA buyers mentioned above. Rental rates begin as low at $300 per month for studios (1-bd: $500/mo; 2-bd: $700/mo) with half the rent payment applied towards the buyers down payment. I haven’t seen the details about this program.

Overall, Duncan Place is a good addition to the U-District that offers modern living options not typically found in Northeast Seattle, save for Park Modern. Situated on 47th Avenue NE, it provides easy access to I-5, the University of Washington, the Wallinford district and Green Lake.

The sales office is open daily between 11:00 AM and 4:00 PM, which is located at 4547 8th Ave NE.  Note: a buyer agent / representation registration policy applies.

View available Duncan Place condos for sale.

Click on thumbnails for larger images:

DISCLAIMER: This information is presented to provide an overview of Fannie Mae’s condo guideline changes. For specific information and questions, please consult with your mortgage loan officer.

Recently, TSCB noted two new mortgage fees implemented by Fannie Mae affecting condo buyers — a .75% condo add on fee and a 1.75% additional fee for investors — both applicable to loans with a loan-to-value rate greater than 75%.

Well, there’s more. Effective March 1, 2009, Fannie Mae is implementing condo guideline changes “in light of the current condo market and the need to mitigate risk on condo loans”. Some of these changes may affect a buyer’s ability to obtain conventional condo loans for new and established condos.

A condo project is “established” if 90% of the units have been sold, is complete and the HOA has been turned over to the owners. A condo project is “new” if less than 90% have been sold, is not completed, is subject to phasing or if the HOA has not been turned over to unit owners.

Overview of Fannie Mae condo guideline changes:

• For new construction and newly converted condo developments, 70% of the units must be pre-sold (closed or under contract). This is being increased from 51%.
• No more than 15% of a condo project units can be more than 30 days delinquent on HOA dues. This is an existing guideline that is now being applied to new condo projects. The calculation was also changed from being 15% of HOA fee payments to 15% of total units.
• Fidelity insurance will be required for condos with 20 or more units, ensuring that homeowner association funds are protected. Presently, this requirement applies to new projects and is now being extended to include established condos.
• A requirement that borrowers must now obtain a condo-owners insurance policy unless the master policy provides interior unit coverage; coverage may not be less than 20% of the assessed value. A condo-owners policy, known as an HO-6 policy, covers personal property, personal liability, and the physical unit from the studs and in. Many policies also include special assessment coverage or the option to include a special assessment coverage rider.
• No more than 10% of a project can be owned by a single entity.
• No more than 20% of a project can consist of non-residential space.
• The homeowners association must have at least 10% of its budgeted income designated for replacement reserves and adequate funds budgeted for the insurance deductible.

According to a Fannie Mae, the guidelines can be modified for condo projects on a case-by-case basis. Therefore, these guidelines may not apply to all condo projects.

What effect will the changes have?

The revised guidelines may affect a buyer’s ability to obtain a conventional loan for either a new or established condo if the project does not conform. Most notably, it’ll affect new developments and it’s already having an impact on at least two new projects. Vulcan recently sent a letter to buyers at its Rollin Street Flats project in South Lake Union notifying buyers of the new 70% pre-sold guideline and extending closing until April 15th at the earliest.

As it stands, Vulcan may be unable to close any of the units at Rollin Street unless (1) they continue to extend closing until 70% of the units are under contract, (2) seek modification under a Fannie Mae expedited review process, (3) find a lender willing to hold the loans in their portfolio, or (4) convert the use of the building.

Ruby Condominiums in Eastlake is holding off closings until there are enough sales to qualify under the guidelines…that could be awhile. Ruby is FHA approved so that offers qualified buyers an alternative, though Ruby must have 25 sales under contract before it can begin closing FHA buyers. Its developer, Barrientos, is a major apartment developer as well, so reuse may be an option. In both cases, buyers are left in limbo.

The new guidelines may also apply to other recently completed and/or soon to be completed projects including Enso, Veer Lofts, Equinox, Alex, Duncan Place, Leona, Lakeview Residences, Brix, Eleven Eleven, The Danielle, The Dakota and Marselle — that is unless they’ve been approved for a lower rate under a case-by-case expedited review process. Quite frankly, though, I expect a few of these won’t end up as condos.

If there is a silver lining, it’s for sellers at established condo developments who’ll have reduced competition from new construction developments.

Statement from Vulcan:
Vulcan has informed our buyers of the new Fannie Mae and Freddie Mac regulations because Rollin Street is at a level of pre-sales that is under what is mandated by the new guidelines. As these guidelines affect the ability of our buyers to obtain financing and close on their purchases, we felt it was important to communicate these challenges as soon as possible. We are working to understand the new guidelines and how they will ultimately affect the property and our buyers. We will be communicating what we know about these changes and their impact in the next 2 to 3 weeks.

Veer and Enso are at a higher level of sales and pre-sales respectively and our goal is to continue to close units in those buildings as buyers come to the closing table.

Response from Williams Marketing (per comment below)
As of today [2/20/09], Ruby has partnered with a local lender (Seattle Mortgage) looking to actually lend money! They have committed to close homes now, ie, we are move-in ready with no pre-sale requirement. We are also working with other regional lenders for additional commitments to close homes with no presale requirements. Ruby on Eastlake is both FHA and VA approved, so buyers can take advantage of every financial opportunity to get into new home ownership.

Posting has been revised.

Duncan Place Condos

Duncan Place is the latest condominium development in the University District area located at the SW corner of NE 47th St and 8th Ave NE. With most of new developments near the city center, Duncan Place is only the second new construction project in the U-District in the past couple of years (the other being Park Modern).

When completed in early 2009, the 6-story Duncan Place will feature 63 studio, one-bedroom and two-bedroom homes ranging in size from 361 sq ft to 998 sq ft. Home finishes and features include:

• 8’6″ to 9′ ceiling heights with floor-to-ceiling windows
• European-style wood cabinets
• Honed granite slab countertops
• GE stainless steel appliances
• Hardwood flooring in entry and kitchen
• Deck or patio for most units
• A/C, upgraded appliances & finishes for premium homes
• Common amenities include an owner’s lounge and roof top deck

The location does place it fairly close to I-5, essentially a block away, though the homes will have sound reducing engineered walls. Nearby, residents will find Trader Joes, the Seattle Public Library and Metro Theatres all within a couple of blocks.

The developer is waiting till the project is closer to completion, around December, before announcing pricing levels and accepting reservations. Occupancy is anticipated for February 2009.

www.duncanplacecondos.com

View available Duncan Place condos for sale.

Duncan Place interior

Duncan Place lounge