Seattle Condos | Seattle Condos for Sale | Reviews by Marco & Wendy

Own an Investment Condo or Thinking About Buying One?

If you own a rental condo right now or are thinking about investing in one there are many factors you should consider and several important laws to keep in mind to ensure you are running your real estate investments successfully.

2015 Seattle Condo Rental Market Statistics (provided by Cassie Walker-Johnson with Windermere Property Management/Lori Gill & Associates)


Important Laws that Have Changed 

• The Rental Registration & Inspection Ordinance (RRIO) is now in place and requires that all rental properties be registered with the City of Seattle by the end of 2016 (the deadlines for registration are based on the number of rental units and zip code)
• Owners need to provide their tenant(s) with a copy of the current rental registration
• Once registered, the properties will be inspected at least once every 10 years by a qualified housing inspector chosen by the owner or by the city inspector
• A property owner cannot evict a tenant if the property is not registered with the City of Seattle under the RRIO
• If an owner wishes to occupy their rental unit or have a family member occupy their rental unit and there is a tenant in place, the owner now has to give the tenant written notice at least 90 days prior to the end of the rental period (this used to be 60 days notice)
• If the owner desires to sell their condo rental unit, and the tenant is in a month to month tenancy, you will need to get the tenants voluntary willingness to move.  The new city regulation does not provide owners of condominiums the right to evict a tenant for purposes of a sale of the property.  I think this is a big miss, personally.  Single family homeowners have this right, so I'm not sure why a condo owner does not have the same right.

 

Join us for Condos Over Coffee 3/30 - Open Forum Coffee Chat

CONDOS OVER COFFEE - March 30th

WHEN: March 30th 7:30 to 8:30am
WHERE: Victrola in Capitol Hill (Pike Pine location)
TOPIC: Open Forum

This month join me at Victrola coffee shop in Capitol Hill's Pike Pine corridor for an open discussion forum meant to focus on your questions and things most timely for you. Come sip some java or tea and get the answers you've been looking for. This month’s Condos over Coffee is ideal for those who have any lingering questions they have been dying to ask about the condo market but just haven't asked yet. Now is your chance!

Feel free to email us in advance or leave a comment here with your questions and we’ll add them to the list of topics to try and cover.

Please RSVP here so that we can make sure to save a seat for you. Friends, family and/or colleagues are welcome to stop by too, so pass the word along!

Oh, and coffee's on me! So stop by on your way to work and get your burning questions about real estate answered.

NEXT MONTH'S EVENT - April 27th
Next month’s Condos over Coffee will be on April 27th and will be a discussion on prepping your condo for the market.

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.

Seattle Condo Inventory Starts to Come Back

Finally, inventory in the Seattle condo market moved up to match demand in May 2013!

We saw a nice boost for listings (from 379 in April to 470 in May).   

This combination of boosted supply and fairly flat demand resulted in a slight dip in median prices by 10% overall with Downtown/Belltown taking a particularly large hit in median prices (from $427k to $365k) while Queen Anne/Magnolia median prices have been steady at $300k for the last few months.

Overall, we're probably not in the no-brainer sellers market anymore.  Seems like we're headed to a more balanced market where buyers will have some leverage given the increase in choices though sellers aren't powerless since even with the bump in listings, there are still 20% fewer listings than the same time last year. 

 

A Cool Seattle Map for Income and Rent

Whether you are asprired to move into downtown Seattle from another city or thinking of renting out your own property, this is one cool map you may want to check out. Chris Persaud, a data journalist, has consaolidated the Amercian Community Survey data on his website Rich Blocks, Poor Blocks on rent and income into a map of U.S. census tracts. The color coded map allows you to have a quick easy look on the different neighborhoods' median income and rent. 

Seattle Bank Owned and Short Sales Update

Thanks Marco on the great wrap up for 2012 Seattle Condo Market!

For those of you who are still curious about distressed properties and their impact on the market (bank owned and short sale inventory), this is for you. More than 6 months ago, we pulled some data from NWMLS on bank owned and short sale condos. At that time, bank owned and short sale condos made up about 19% of the total listings. Last month's data shows that it was almost the same. However, if you compare that to almost 2 years ago, distressed assets as a percent of all on the market went down significantly.

In the first half of 2012, we had a total of 315 distressed condos, during the 2nd half, it went down to 259 sales. Interestingly, bank owned properties sales dropped from 186 to 93  in the 2nd half of last year while short sale condos went up by almost 30% from 129 to 166 sales perhaps an indication of banks starting to work with owners when a short sale is proposed.

In summary, we had fewer distressed condos coming on the market in 2012 than in 2011; so far we are not seeing any influx of bank owned properties coming on the market. I agree with Marco's prediction that we are not likely to see an increase in them in 2013; this will be a good news for sellers.  

( Data extracted from NWMLS on 01/29/2013 and are deemed reliable but not guaranteed. 

By Wendy Leung with Seattle Condo Review: A guide to Seattle Condos and Downtown Seattle Condos exclusively for buyers and sellers.

Related posts:

Seattle Bank Owned and Short Sale Properties July 2012

Seattle Bank Owned and Short Sales Properties April 2011

Seattle Condo Market Update: Soft Landing for the Winter

November 2012 data are in.  Here's some key takeaways and of course, the charts.

• After several year-over-year thumpings of monthly 2011 sales, November 2012 was higher than November 2011...but only by ~15% (versus the ~30% advantages we saw in September and October year-over-year comparisons).  Perhaps the we're finally settling in for our winter hibernation.
• Median prices for Seattle overall saw a soft landing, slightly higher than November 2011 but considerably lower than the banner October 2012 numbers ($245K versus $275K).
• At the neighborhood level Belltown/Downtown remains the most solid overall with sales almost as high as October 2012, median prices up 10% month over month, and inventory still tight.   

 

To Sell or Not to Sell...That is the Seattle Condo Question.

As the market is showing a little bit more buying activity and inventory is reaching new lows, many owners can't help but wonder if now is finally a good time to unload their properties.  This is especially true for those who have been renting out their condo where the current tenant is moving out in a few months.  

To sell or not to sell...  

Recently, a client of mine who owns an one bedroom, 850 square foot condo in Belltown in a fairly new building was contemplating this very same decision. He is an out-of-state owner with a tenant moving out in the summer. Unlike some sellers who bought during the peak and are carrying two mortgages on their condo, he only has one mortgage.  So even if the value still has not returned to his original purchasing price, if he sells it, he doesn't need to bring any cash to the closing table. 

So, it comes down whether he should continue renting it or selling it and moving onto something else. Let's look at some hypothetical numbers for his case. 

Cristalla versus 2200 Westlake...

A few years ago, it was most interesting to see which condo buildings were getting the most pre-sale interest.  Now that new projects are rare and the projects from the condo boom are changing hands for the first and sometimes second time, I thought it would be interesting to see if certain buildings took longer to sell than others.

Since the data is still limited, I ignored buildings that didn't have 3 or more 2BR unit resales (i.e., a previously purchased unit subsequently sold by an individual on the resale market and a brand new unit sold by the developer) in 2011.  For what remained, I looked at the average days on market for all the units sold and then plotted them in the bar chart below. The data includes bank owned and short sales as well. 

What's interesting is there appears to be three tiers of buildings.  Tier 1 buildings like Waterfront Landings, Continental, and Cristalla seemed to be able to find buyers for their 2BR units in a little over 3 months.  Tier 2 buildings like Cosmopolitan, One Pacific Tower, and Seattle Heights took almost 5 months to sell.  Lastly, Tier 3 buildings like Belltown Court, Watermark Tower, 2200 Westlake, Meridian, and Vine took a whopping 7 months or more on the market before they were sold.

Of course, if you cut prices, I'm sure you could sell any of those units much more quickly but there's no reason to think that Tier 1 sellers like Cristalla were asking for a lot less for their units than say Tier 3 sellers like those at 2200 Westlake.

   
        (Data is individually extracted from NWMLS and is deemed reliable but not guaranteed.)

By Wendy Leung with Seattle Condo Review. A guide to Seattle condos exclusively for buyers and sellers.

Investing in Seattle Condos? Six Things to Consider Beforehand.

The year of the Dragon has definitely spurred more buying activities compared to last year. More investors are getting off the fence and feeling a little bit more confident.  Every now and then, I will come across some first time investors interested in the Seattle condo market. If you are one of those first time investors who plan to buy and rent it out, there are a couple of things that you might want to consider before venturing out on your first condo search:

 

• Consult your financial planner (If you have one): How is the rental property going to fit into your whole investment portfolio? Is it going to be long or short term?  These questions may have impact on your investment goals whether you're are looking at medium term capital appreciation or as part of your long term portfolio.
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• Consult your tax account- In most cases, there are some tax benefits when you own an investment property.  You could deduct your mortgage interest, taxes, insurance, and expenses associated with owning the rental property.  If you are experiencing rental loss, you might even be able to write that off but they are subject to some income limitations.  So, talk to your tax account to find out if you're eligible for those tax benefits.
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• Get pre-approved! Unlike during the condo boom years when you can easily get a pre-approval letter within hours after giving out some basis information over the phone, these days, it takes a little bit more work. Lenders are much more stringent about giving a pre-approval letter. Besides running a credit check, most lenders may need you to provide your pay stub, W2, and bank account statements. Depending on your individual circumstance, (employed, self employed,etc.) the documents required may also vary with different lenders.
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• Are you ready to be a landlord? Are you going to manage the rental property or have someone do it for you?  If you are newbies, you may feel excited with your first investment and wanted to manage it yourself.  There's paperwork, time and energy needed to manage a rental property.  So, if this is something you don't feel up for, you might want to hire a management company to deal with it.
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• Run all your numbers. After getting pre-approved and narrowing down the price range that you're comfortable with, run the numbers.  This is where an experienced realtor can come in and help you figure out the high level calcs.  The costs for buying and selling the rental property, the rental rates, vacancy rates, maintenance/repair costs, cost of hiring a management company and other expenses associated with owning an investment condo should all be considered.
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• Be open minded. I once had a client who thought distressed properties are usually not in good condition and did not even want to consider looking at them. However, majority of the condos that I have come across are usually in pretty good shape or only require minimal work to make it rentable.  Since this is an investment property, be open minded about looking at distressed properties (short sales and bank owned).  After all, these properties are generally priced 5-20% below market value which will give you a good start and more head room for appreciation down the road.

By Wendy Leung with Seattle Condo Review. A guide to Seattle condos exclusively for buyers and sellers.

Will Developers Finally Start Building New Condos?

Last week I asked for readers' questions and got a few great ones so I'll take on one of them here. SCR reader Darrel asks:

A lot of big projects were cancelled or put on hold. AVA, Insignia, Heron and Pagoda, 1 hotel, etc. Inventory is steadily dropping as the last units from Escala, Olive 8 and 1521 are selling out. With an increase in demand for Downtown and Belltown condos in the coming months possibly driving up prices, will this motivate developers to build more? Or do you think they will stick with apartments for now like Vulcan is doing?

Obviously, only time will tell and I'll be the first to admit if I could predict the markets, I'd be on Wall Street (the one in NYC).  I'm sure other readers will have different points of view so feel free to sound off in the comments section below. That said, here are my observations.  

1. There has been some good demand for lower priced condos -- particularly under the half million mark.  
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2. However, we still have a little over a year's supply of inventory for the higher priced condos ($1M>).
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3. Furthermore, prices haven't moved up materially in years and have been fairly flat this year.
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4. Moreover, since many owners are waiting for the market to improve (there are fewer units on the market than normal), there is probably fairly liquid supply lying in wait should things improve.  
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5. In summary, I don't expect to see many new condos breaking ground in the near future.  We'll probably start with investment units currently being rented out, then perhaps some apartment conversions, followed by a few brave developers down the road.

That's my 2 cents.  Curious to see what others think as well!

By Wendy Leung with Seattle Condo Review. A guide to Seattle condos exclusively for buyers and sellers.