Home Residential New Construction in Seattle’s Condo Market Contributes to the City’s Growth

New Construction in Seattle’s Condo Market Contributes to the City’s Growth

Condos, condo market, Keller Williams Real Estate, Downtown Seattle, Seattle, Ballard, Queen Anne, Capitol Hill
Photo: Nexus Seattle

By Brittan Jenkins

While new construction on condominiums contributed to the growth of Seattle’s condo market in 2016, growth in the resale market has been relatively modest. Seattle Condos and Lofts released a 2016 year end report analyzing their findings, which found that unsurprisingly, downtown Seattle remains the anchor of the condo market with more units sold and for higher prices than the surrounding neighborhoods.

Ben Kakimoto, Seattle condo and urban real estate marketing and listing specialist who put together the report, said when writing the report he wanted to note two things, how the market did overall last year and what the sales prices look like excluding new construction. “If it wasn’t for Vik, Insignia and Luma, we would’ve sold fewer condos last year than the year before, which I thought was an interesting finding,” said Kakimoto.

Last year, 3,625 units were sold compared to 3,050 in 2015, which is an 18.9 percent increase. Of those units sold, the majority came out of the downtown area at 959 units, not unlike the previous year when the downtown area led the pack with the most units sold than any other neighborhood at 780. From 2015 to 2016, downtown experienced a 22.9 percent change in the number of units sold.

The Seattle Polaris Pacific Report from January 2017 details some of the condos currently selling and condos that have sold and are no longer on the market. Bosa-developed Insignia at 2301 6th Ave in Seattle went on the market in September 2013 and closed with 654 of 698 units sold. While a limited number are still in contract, the cheapest listing price for a one-bedroom condo ranges from $415,000 to $660,000. The most expensive units start at $2,580,000. Nexus, the 40-story, 374 unit condominium in the Denny Triangle neighborhood hit the market in October of last year. Those condos are still in contract but unlike Insignia, these units include studios through 3.5-bedrooms and for a tad bit cheaper. The cheapest unit starts at $300,000 and the most expensive starts at $1,800,000.

A number of condominiums sold out including Luma on 1321 Seneca St., Vik Ballard at 1760 NW 56th St. and Four Seasons on 99 Union St. Combined, the units total 321 condos sold.

In total, Seattle accounted for 43 percent of all condo sales in King County. The median sale price rose 16.7 percent in 2016 to $408,500 compared to $350,000 from 2015, however the median includes new construction, which added approximately 630 units last year. Excluding new construction, the median would have been $370,000 or a 5.7 percent increase for the resale market. The median condo sale price in King County was $326,000.

“If you exclude new construction, the market is pretty consistent across the city,” Kakimoto said. In Capitol Hill, for example, he said if the 168 new condos were excluded from the market, the area would be very close to where it was last year.

He does anticipate, however, that the most popular and tightest density for condos will happen in downtown and Queen Anne. “They’ll see the biggest growth this coming year,” said Kakimoto.

The report noted that the least expensive sold for $90,000 and the most expensive sold for $8,000,000. There were 258 condos that sold for over $1 million, which reflects a 65.4 percent increase over 2015 and 1,318 condos sold for less than $350,000 which is a decrease of 12.1 percent from 2015.

While there was growth, Kakimoto said it’s typical for the market to go through cycles. “I would say last year was more of an anomaly because between 2009 and 2015, we didn’t have any new construction in the city, it was all resale,” he said. “But in 2015, phase one of Insignia was completed, which added 350 units and then in 2016 with phase two, there was an added 600 units.”

“If we look at the five years prior, we had almost no growth,” Kakimoto said. “In this last cycle, we were recovering from the crash, and we didn’t run out of inventory so a lot of developers shied away from developing in those periods where we had no new condos,” Kakimoto said.

Kakimoto said he anticipates people will be holding onto their properties this year, resulting in fewer resales than last year. “It could be somewhere between that I think it’ll be higher than 5.7 but I don’t think we’re [going to] have as many resales this year as we did last year,” he said. “Unless someone is going to relocate out of the area, most owners won’t sell, because they’ll have the same issue as other buyers, there’s nothing to move into.”

Looking into 2017, Kakimoto said he anticipates a tight market. “I think 2017 is going to be a tighter market, and we’re going to see greater increase in prices than we did the previous year in terms of resale prices,” Kakimoto said. “New construction definitely pumped our market up and that’s not something we’ll see this year with fewer condos coming online,” he added.