Heron Pagoda On Hold
The Heron Pagoda development at 5th and Stewart has been delayed, according to the DJC today, becoming the latest project to be put on hold due to the housing market and the economy. It joins the other major downtown area projects that are on the back burner — AVA, 1 Hotel, Martin and Stewart and Minor, et al.
Per the DJC’s article:
Multi Capital Group is delaying construction on a two-tower development across from the Westin Seattle due to a faltering economy, poor local condo sales and lack of financing for parts of the complex, according to a project official.
[Multi Capital] had planned to start building the 46-story Pagoda and Heron towers in late 2009, said Alec Carlin, senior project manager with Hummingbird Advisors, which is managing the development.
“We’re still trying to decide when is the best time to move forward,” Carlin said.
Carlin said Multi Capital has considered building apartments instead of condos, but “right now it’s staying condos as far as we’re concerned.”
How do you see the market for downtown highrise condos looking for 2009 with many projects downtown being postponed? Do you see prices rising due to less supply and equal or greater demand?
Supply is at record levels and I suspect we’ll continue to see significant inventory throughout 2009. In respects to new construction, we have Gallery, Veer and the Four Seasons finishing up later this year and 1521, Olive8, Alex, Enso and Rollin Street completing next year. There’s still a considerable number of available units in those projects, not to mention resales. I would think we’d see more equilibrium in the market.
As far as demand, I never bought in to the notion there was ever sufficient demand for new highrise condos given the price points…it’s just too out of reach for the majority of urban condo buyers.
I don’t know where prices will be next year, but I don’t think we’ll see it rise much, if at all. Though, it’ll really be dependent on the property, location and health of the economy. Look at 2200. It opened over 18 months ago and there are units for sale that are priced below the presale price.
You didn’t even mention Escala!
Don’t forget all the non-new projects that surely have some units for sale. And some of the close-in neighborhoods (Capitol Hill, Queen Anne) essentially compete for the same buyer.
Seattle downtown is not so big/nice that people are unwilling to consider living a mile or so outside the core.
Personally, I have no skin in the game (don’t own a condo) but I’m happy there’s all this new inventory. Hopefully long-term (10-20 years out) this will mean a more vibrant/people-filled downtown.
BTW – We’re exactly the type of buyer that might consider these projects 15-20 years from now as we downsize from our current home after the kids are grown. But still, the price points are crazy right now, just based on the $/sq.ft numbers. How many Bagley Wrights and Bill Gates Sr’s are there?