Remember when all of us condo lovers were wondering which building would make the best investment back in 2006. You remember 2006, right? When new condo projects were getting announced so often a few of us decided to write an entire blog about them 😉
Well, I was curious which resale condos faired the best through the recent recession. Certainly, there were plenty of SCR readers who were convinced all the 2006 prices vastly exceeded their future values and probably just as many who were convinced certain buildings would always be in high demand.
This afternoon, I pulled all the 1BR sales from 9/1/06-9/1/07 and 9/1/08-9/1/09. I was actually doing a much more in depth analysis for one of my clients but they were ok with me sharing a slice of it for SCR readers since they've been readers themselves for some time now.
Below is one of the resulting analyses. The takeaway? Concord and Klee investors were kept the most whole through the dark times.
(Data from Multiple Listing Service and are deemed reliable but not guaranteed.)
I'm sure lots of folks have theories. My take is Concord is considered a blue chip building. It's got a great location (close to Belltown but not within earshot) and the building quality is top notch. Surprisingly, Klee's open one bedroom prices are holding up really well. As for Bellora, it's still a pretty solid building to keep in mind. The price per square foot retention is lower partly because of a higher number of smaller units selling (smaller units generally result in higher price per square foot) in the '06-'07 period versus '08-'09.
I live in the Ellington and this is rather surprising to me. I currently have a 1 bedroom for sale, and I purchased directly from the seller in 2007 at peak value. While it’s depreciated about 16% per Zillow over the past two years, seeing it represented on this list is somewhat comforting.
Wendy, are you sure your numbers are correct?
There is an unit in Concord and the price offered is only 20K higher than the purchase price at the end of 2004.
@kevin: Price offered and price sold are two different things. Also, I believe Wendy looked at all the 1BR’s in each building in aggregate so one off examples might be an exception.
I will wait for Wendy to respond if she will.
Of course I know offer price is different from sold price – sold price will be lower at current market so it will probably be sold around or below end of 2004 prices.
I can’t see where the 97% increase is – unless a disproportionate number of sales happened in 2008 at before-crash prices.
@Kevin
The numbers are from MLS so they are pretty reliable. The data was compiled based on average price per square foot sold for 1 bedroom condos during the peak of the market (~fall 2007) and fall 2008-2009. The 2008-2009 average price per square foot retention is 97% (for Concord and Klee) of what sold during the peak of the market. They’re not referring to the increase in average price per square foot. Hope that helps!
Are you factoring in the 6% agent commission? e.g. If I sold my one bedroom at Concord for 97%, the transaction costs me 6% as well, so the actual net is 91%.
Cristalla is worse than I had thought, but you missed the #1 worst which is Madison Towers/Hotel 1000. I’ve seen several sell far underwater, and at least one that lost 37% y-o-y.
Wendy, sorry I misread your post so the 97% is the “retention” rate instead of price increase.
Based on the current listings, I still beg to differ that Concord can still fetch 2006 price (the height of the bubble), but the numbers do make much more sense now.
@Ben
Yes, the 6% fee has been factored in. The research was for a client looking in Belltown so Madison Tower/ Hotel 1000 was not included as part of the analysis : )
Great post. Wondering why my agent isn’t doing this for me.
Since when is 2200 Westlake in Belltown?
Curious why Mosler Lofts were not included in your analysis. I don’t think any units have re-sold for less than the initial sales price. Maybe one. Low volume for sure, but values have held up pretty well.
2200 Westlake is not in Belltown but they were included in the analysis because they share the same zip code.
Sales at Mosler have been surprisingly slow and several have gone to market for less than their 2007 price.
#803 sold for $563,000 last week, and was originally sold for $615,000 in 2007, so it lost 4% per year, plus the cost of commissions. They must have lost close to $100k on that one.
#TH1 finally sold for $401k last month at $417 sq ft, which was a new low per square foot for the townhouse plan.
#TH5 sold in 2007 for $695,000, and sat on the MLS at $609k without any offers.
#704 is on the market at $339k which is probably $20k underwater once you take out commissions.
#1011 sold a year after opening for $6k less than the 2007 price, probably a $30k loss total with commissions etc.
The only thing helping the price at Mosler is probably the builders lien which locked up sales for so long and has kept units off the market until recently.
You missed 1104 @ Mosler which hasn’t sold at the 2007 price in over six months.
On market:182 days
Oct 25, 2009 Listed $330,000
Dec 14, 2007 Sold $327,000
$330,000 less 6% commission = best case they lose $20,000.
Hi, Ms. Leung, I have some questions about condo. 1.If I move to another place, can I always rent out my condo or the condo association has to agree to this? Thanks
Hi Maggie, the best way to get these answers is to find out from your association regarding the restrictions on rental.
Thank you, Wendy. Can the restrictions on rental change over time? Thanks.