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King5 Interview:
l was interviewed by King5 today about the condo market, particularly the state of conversions reverting back to apartments and the overall health of the market. It was my first camera interview, it went swiftly and my nervousness showed. Overall, the market has softened, coming down from a sellers market and heading towards, but not yet in, a full buyers market. Business has been picking up and we’re seeing more buyers entering the marketplace as a result of current news reports, which may actually help to maintain Seattle’s condo market at normal conditions.
One note regarding the decision by developers to revert to apartments. It’s a good thing for the condo market as it’ll help to restrict inventory levels from getting out of hand and maintain value. Though, there’s probably still too many $1 million plus units on the horizon for the market to fully absorb. Rumors have been swirling around that other condo projects may ultimately end up as apartments. The self-regulation we’re seeing from developers will keep the Seattle condo market from imploding.
It’ll be on tonight’s 5 pm broadcast on King5 between 5:15 and 5:30, so they tell me.
Ben, I just watched your interview on King-5. You didn’t seem nervous to me, more like a real pro! Great job.
But it’ll push rents down, no? Will that affect speculators who are renting units to cover payments?
C – I’d anticipate that rents will stabilize or decrease as the rental inventory increases. The speculators will do ok in the short term, they likely have 12 month leases in place and the fewer condo projects built will help to stabilize the condo market.
Last year, the projection was 30 condo projects developed by 2010, but the way things are going and developers pulling back, I don’t foresee that we’ll reach that level till well past 2010.
One developer is heading towards bankruptcy. Another is scaling back their development timeline, and yet another is having difficulty selling projects currently under construction, so I expect the projects they have on the drawing boards will either be postponed a bit longer, developed as apartments or abandoned altogether.
hi ben-
interesting tidbits about the developer community. can you reveal who’s headed for bankruptcy?
ps- congrats on the king5 gig!
CS – rather not mention it publicly.
Speaking of conversions, the King5 report mentioned that Strata on California, a West Seattle conversion, is reverting back to apartments. The West Seattle blog has more info:
http://westseattleblog.com/blog/?p=4355
On the same day, we broke the story not only that Strata is reverting to apartments, but that its developer, Mosaic Homes, also has decided to stop the conversion plan for West Ridge Park, which was to become “Gables.” (We actually had first word of that one, courtesy of a reader, two weeks ago: http://westseattleblog.com/blog/?p=4192 )
Nice job with the interview. Speaking in regards to more buyers entering the marketplace, I agree, we’ve received quite a few more calls from ready buyers lately. For those buyers sitting on the sideline, I’m not sure how much longer they expect to wait. Serious buyers know there is no better time then now to get themselves into a great deal. I’m not only speaking in regards to higher levels of inventory and decreases in sales price, but also because of the record low interest rates. For those who need to see the numbers, they can check out the report I’ve prepared here http://www.burien.com/reports/king-county-home-sales-and-information-aug06-nov07.html
With rental rates continuing to climb they will probably stay high through 2008, and into 09. Many of these new buildings will not be completed until 2009 and maybe into 2010. The Seattle Times had a good article explaining more about the supply and demand for rental properties, “For Seattle Landlords, 08’ looks Sweet. Right now through the first quarter of 2008 will most likely be the best time purchase. I agree that if you are on the sidelines, don’t wait too much longer.
You should post the video of your interview here.
They didn’t have the segment on the king5.com website otherwise I would have linked to it. Supposed I could ask for a copy.
I’m a serious buyer who currently rents. I’m not even going to think about spending my money for another 6 months to a year.
The condo invetory in Seattle is growing. 2008 will bring a record number of ARM resets which will only bring more trouble to over extended borrowers.
My rent is very affordable and I expect the market will continue to turn in my favor. Prices have not even begun to decline.
side note: Trying to boost sales through fear and manipulation is wrong.
s.data – Thanks for the comment. I’d anticipate an increase in foreclosures as well. It’ll be interesting to see if the resets will impact SFHs and condos evenly or not.