Olive 8 announced reset pricing for their remaining homes. According to their latest email, the reset pricing is 15-25% off the most recent list price and 30-40% off presale pricing. More than 10 new sales have occurred in the past week.
The website recently posted a video hosted by Tom Kelly, a nationally syndicated real estate columnist and author discussing about the reset of Olive 8 and the downtown condo market.
The video pointed out that we are not going to see a new condo coming up in Downtown over the the next few years and Olive 8 represents 25% of the new inventory for all condominiums in downtown Seattle. I agree that Olive 8 is one of the few newer projects available in downtown Seattle. We have in fact seen several new condos in the city selling most of their inventory like Enso, Gallery, Marselle and 1521 and the condo market has lost some projects which were converted to apartments (it wasn't that long ago when all the apartments were planning to convert to condos!).
No new condos pouring into the market is a good news for sellers. On the other hand, buyers have definitely taken their time coming back and bank lending remains pretty tight in general. We should also keep in mind the new wave of apartments coming onto the market. This will have an impact on the first-time buyer condo market who will have lots of apartments competing for their business as well as investor condos who will need to offer more competitive rents. That's just my take. Any thoughts?
Related posts:
Olive 8's New Pricing
Olive 8 Auction Results
Olive 8 & 5th and Madison Update
Olive 8 going Auction
Wendy, the last point you made is really interesting and one that I hadn’t thought of before. I tend to agree that with more “New” apartments on the market that it will effect condo owners looking to rent. Then again rents are expected to rise 25% over the next 5 years (according to Dupree and Scott). I guess we’ll find out soon enough. I think we would all agree that Olive 8’s reductions are good for the market.
Jeff, you have a good point. I think it all comes down to supply and demand. Hopefully, the condo market will turn around soon.
Jeff and Wendy,
Olive 8 is only using a marketing ploy to get buyers in their doors.
The prices are actually higher than they were really selling for before, during, and after the auction. Why is the typical buyer so uneducated? If you can possibly sit through Olive 8’s sleazy negotiation process!
I have researched the prices and the same style units have sold for at least 100K less on one or two floors below the 27th floor.
On the lighter side, olive 8 new sales ploy is very comparable to a short tale by Hans Christian Andersen, “The Emperors New Clothes.” As you recall, this tale is about two weavers who promise an Emperor a new suit of clothes that are invisible to those unfit for their positions, stupid, or incompetent. When the Emperor parades before his subjects in his new clothes, a child cries out, “But he isn’t wearing anything at all!” He was really naked.
So to all the possible Seattle buyers! Look more closely and you will see that Olive 8’s prices are higher not lower. The reset prices are rest from the pre-construction prices from about 2006.
Seattle Bubble has an analysis showing the prices are not ‘reset’ at all. They are the same as closing prices pre-auction in most cases.
And Tom Kelly was saying buy buy buy in 2007.
http://seattlebubble.com/blog/2011/01/10/olive-8s-unconvincing-reset-marketing-strategy/
@ Mike and Danno:
Thanks for the info! The reset prices seem to be made only on homes that were previously listed higher on the MLS before the Auction. They did not adjust it base on the closed auction homes. I agree, the reset prices are much higher than the closed auction homes. I’ll be doing an update post on this. Stay tuned.