Downtown Condominium Values Increase a Staggering 35-Percent Year-over-Year
An analysis of NWMLS data for the month of September reveals that the value of downtown Seattle condominiums is increasing at an unprecedented rate, as the resale price of in-city condos increased a 35-percent compared to September 2016. These numbers are reflective of Seattle’s continued population growth, rising real estate prices for renters and buyers across the board, and a lack of supply without any relief in sight.
Downtown Seattle condos saw a 35-percent increase in value in September compared to the same time last year.
“After reviewing the data for September, I wasn’t surprised to see the median single-family home price surge across the board by 12-percent, but I wasn’t expecting to see condo values increase so quickly,” said Dean Jones, owner and principal, Realogics Sotheby’s International Realty (RSIR). “There is an affordability crisis brewing as downtown demand is rising much faster than supply, which isn’t likely to change anytime soon.”
Looking at the current decade, just 6% of the over 25,000 new housing units in downtown Seattle are/will be offered for sale. There will be no new condo deliveries in 2018, and of those that will be offered in 2019 and 2020, two-thirds are already pre-sold.
Given the hot housing market, why are developers still electing to build apartments over condos? As a recent report published by RSIR reveals, there are two key factors:
1) Seattle is experiencing a record number of new residents that are flocking to the city’s jobs in the tech industry. This is generating a large number of renters, as most people that relocate to the city typically rent for a couple of years before they decide to purchase a home.
2) Washington state’s stringent quality assurance standards and consumer protection initiatives under the Condominium Act make apartment opportunities much more desirable for developers because they are less risky investments.
Though there was an overall decrease in available inventory, the sales volume for condos in downtown Seattle increased by 15.4-percent year-over-year.