With all the new and innovative urban living projects in Seattle, looking at the history of the Tribeca is an interesting excercise. When it was put on the market back in late 2003, it was really one of the earlier thought-leading experiments in mixed use construction in Seattle. Concrete and steel and built to commercial standards atop a Safeway in Queen Anne with a fairly low supply of total units, many investors and buyers considered this an ideal project and one that would rise in value like a rocket ship.
In practice , it actually took some time to sell through and the builder went through two marketing firms. Certainly, the property is wonderful and owners have definitely made gains. However, what's thought provoking is that on paper, this was and continues to be an almost perfect property that some anticipated to do even better than it has thus far. Location, construction, limited direct competition in immediate vicinity, uniqueness, etc. all pointed to a bidding war property. Nevertheless, many units did take a little while to sell -- even while the real estate market was white hot.
What lessons can be inferred? It's ok to pay a premium for premium property -- just understand that regardless of how much you feel it in your gut, there's always a risk that future buyers may not always have the same intensity of appetitite as you do. How do you make sure your enthusiasm and that of the sales center are calibrated for future demand? That's definitely an art as much as a science.
Some things that I always make sure I do with my clients and you should ask from your own realtor:
- Look at comparables from a product as well as a price point of view (I call this a backwards and forwards CMA)
- Research any potential yellow flags that might create resale friction (e.g., litigation, new projects planned nearby, crime, builder track record, design flaws, new zoning discussions, etc.); these are rarely easy to find but can often be critical to avoiding future headaches
- Pick the right unit and right layout -- sometimes it's better to have a great unit in a good building than a good unit in a great building
- Look at historical sales data for that building as well as its neighbors,
- Consider the local economic drivers within a few square blocks of the property, etc.
- Get a good, unbiased buyer's representative. Remember, the sales center works first and foremost for the seller.
- Make sure your realtor knows the lay of the land and does his or her homework.
There are a number of other things to keep in mind but the ones above should get you off to a good start. Also, every buyer and realtor are different so consider this post all personal opinion and I'll be the first to admit there are a lot of ways to skin a cat. There's no guarantee you'll pick a winner but I think these are some good pointers to mitigate your risk. Hope this helps!
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