Seattle-area apartment costs rise over ‘nontraditional’ gross sales, purchaser shift

Costs of Seattle-area condos surged in January with double-digit annual will increase in stark distinction to single-family houses that remained largely flat.  

In response to knowledge from the Northwest A number of Itemizing Companies, King County’s median apartment worth was $600,000 in January, up 21% over the yr. The median worth in Seattle hit $689,975 final month, up 28% in comparison with a yr earlier. On the Eastside, the median worth was $734,900, up almost 29%.  

The bounce in costs for condos got here because the Seattle-area still-tight housing market drove patrons to look into choices past single-family houses. Actual property brokers say sure forms of condos, like city houses and yard cottages, are drawing curiosity from annoyed would-be patrons.  

“First-time homebuyers are now not prepared to attend for market situations to enhance,” stated Ryan Palardy, a dealer with Seattle-based Get Glad at Dwelling.  

Regardless of excessive mortgage charges, “they’re out and able to make purchases,” Palardy stated. Condos are “typically the one approach, or a minimum of the best approach, for them to get into one thing resembling the kind of homeownership that they need.”  

John Manning, managing dealer for Seattle-based RE/MAX Gateway, stated the general apartment market hasn’t modified a lot for patrons or sellers, although.  

“We’re not likely seeing an enormous uptick in demand,” Manning stated, noting NWMLS knowledge reveals low- and midpriced condos are staying available on the market for 60 days or extra. 

Manning stated the demand for higher-priced condos has been stronger. Seattle had a minimum of 9 condos just lately promote for a minimum of $1 million, and Redmond had six, Manning stated.  

In response to NWMLS, January’s median gross sales costs for condos in Kirkland and Woodinville topped $1 million.   

What’s behind the worth will increase?  

“It looks like there have been lots of these nontraditional forms of condos bought in January, which pushed the worth, the annual proportion change in worth, up fairly a bit,” stated Steven Bourassa, director of the Washington Middle for Actual Property Analysis. 

The NWMLS counts a number of housing sorts as “condos,” together with city houses, transformed single-family houses and accent dwelling items added to a yard or house beside an present house.  

Bourassa stated January’s NWMLS gross sales and worth figures for condos are troublesome to interpret given this mixture of property sorts.  

The gross sales image for condos was additionally uneven in January. Apartment gross sales had been approach up from final yr, rising 16% over the yr to 144 whole gross sales in Seattle and by 27% in King County to 352 gross sales, the NWMLS reported. Nonetheless, gross sales declined in Seattle and King County from December, usually a sleepy month for gross sales general. In contrast, 480 condos bought in King County in January 2021 throughout a extra strong market.  

Seattle dealer Palardy stated Amazon employees beneath a return-to-office mandate have been trying to purchase condos downtown.  

However, he added, they weren’t dashing to purchase. “They’re taking their candy time discovering a spot and so they’re hoping to barter costs down,” Palardy stated.  

Apartment patrons have been favoring accent dwelling items, reminiscent of yard cottages, Palardy stated. These “are condos in title solely,” Palardy stated. They are often add-on items to an present house with a shared wall, or indifferent houses typically constructed within the yard.  

Seattle inspired ADU growth with zoning that enables for extra density within the neighborhoods, and there’s been a major bounce within the variety of permits since 2020, in response to metropolis knowledge.   

Palardy stated the ADUs look extra like small homes and city houses however are normally extra reasonably priced than single-family homes.  

“Rapidly individuals are leaping on these new-construction condos, partially as a result of they only now are hitting the market and partially as a result of individuals are determined to get into the market and these signify probably the most reasonably priced worth factors,” Palardy stated.  

As for apartment-style condos, “they might be inching up in worth, however barely,” Palardy stated. “They’re not getting the site visitors. It takes nonetheless a number of months to promote and the folks which can be shopping for are nonetheless trying to get offers and so they’re prepared to take their time.”  

Extra condos hit the market in January. In response to the NWMLS, it might take 3½ months to promote all of the condos listed in King County, which elevated from beneath 2½ months a yr earlier. It stays beneath the 4 to 6 months the itemizing service considers a balanced market. 

Condos within the lower cost tiers had been as soon as an choice for first-time homebuyers in Seattle, however as costs, property taxes, mortgage charges and home-owner affiliation charges elevated, that’s now not a lot the case, RE/MAX Gateway managing dealer Manning stated. Some apartment homeowners, particularly retirees, are struggling to maintain up with these prices, promoting their condos and shifting out of town.  

HOA charges can run as excessive as $800 or $1,000 a month for a single-bedroom unit in Seattle. Whereas that payment typically consists of the price of water, sewer and sanitation, “it simply provides to the perceived expensiveness,” Manning stated. Property taxes on a one-bedroom unit in Seattle may also be $5,000 yearly. 

“Whenever you couple property taxes with householders affiliation dues after which add excessive rates of interest to it, proudly owning the condominium has grow to be a burdensome factor,” Manning stated.