Conversion Conundrum
The condo conversion market is continuing to feel the effect of a softening market. In the past few weeks a number of notable conversion projects have taken price reductions ranging from $5,000 up to $30,000 with most of the reductions being around $10,000 to $15,000. Some are offering other incentives for both the buyer (buyer bonuses, paid HOA dues, free TVs) and their agents (commissions as much as 5%).
- CityView – Leshi
- Denny Way Condos – Capitol Hill
- Harwood – Beacon Hill
- Market Court – Ballard
- Nine Cherry Square – First Hill
- Serana – Lower Queen Anne
- Tobira – Downtown/ID
- Vertigo – Capitol Hill
I’m still receiving inquiries from apartment owners looking for developers to sell to, but with the increasing difficulty in moving the units and realizing lower profit margins, developers may begin to shy away from conversions until the market shakes out. This is potentially good news for renters (avoiding displacement) and will allow the market to stabilize.
I have been in favor of conversions as its been one of the principle mechanisms for bringing affordable condos to the market. However, too many developers have jumped on the bandwagon and some are bringing less than quality products to market. The slowing should help curb the rash of conversions.
