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.
- There has been some good demand for lower priced condos — particularly under the half million mark.
- However, we still have a little over a year's supply of inventory for the higher priced condos ($1M>).
- Furthermore, prices haven't moved up materially in years and have been fairly flat this year.
- 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.
- 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.