With an average annual rate of 1.8% growth between 1970 and 2000, the central Puget Sound region is one of the fastest growing metropolitan areas when compared to an average of 1.1% growth rate for the rest of the nation. Regional forecasts by the Puget Sound Regional Council expect the area to grow by an additional 1.7 million more people between 2000 and 2040 which will equate to approximately 5 million persons. Currently, King County represents over 50% of the region’s current population. Additionally, the entire region’s population is on average wealthier than the majority of other areas in the nation. This has already caused a struggle for lower- and middle-income households.
During 1970 and 1980, figures show 324,000 jobs were added, and 386,000 between 1990 and 2000. The large increase in speculated population is due to an additional forecast which reports that 324,000 jobs were added between 1980 and 1990 and 386,000 between 1990 and 2000. Following that trend we can expect an additional 1.2 million jobs between 2000 and 2040. By 2040, the regional job base is estimated to show over 3.1 million workers.
With a decline in average household size, future population growth will require 1 new home for each 1.77 additional persons. With the expected increase of 1.7 million additional persons between 2000 and 2040, the region will need to construct another 1 million new housing units by 2040. This also means that all regions will need to accommodate to this growth one way or another.
Because the cost of building new or expanded infrastructures are more costly in undeveloped areas, we can expect that the majority of growth will happen in more dense areas such as the city’s urban core.
With the recent media wave regarding a projected shortage of urban housing, here is a synopsis of how many new units which are currently selling, under construction or planned.
For a more updated list of proposed condominium projects and their status, visit Development Status for New Construction Condos.
- Gallery – 233 units
- Four Seasons – 36 units
- Moda – 251 units
- Olive 8 – 231 units
- Parc, The – 185
- Trio – 117 units
- Veer Lofts – 99 units
Total new units planned for 2008 = 1152
- 1521 Second – 143 units
- Alex – 32 units
- Enso – 134 units
- Escala – 275 units
- Rollin Street – 208 units
Total new units planned for = 792
- Art House – 140 units
- Smith Tower – 12 units
Total new units planned for 2010 = 152
- 1 Hotel – 51 units
- 1915 Second – 170 units
- AVA – 236 units
- Icon Tower – 283 units
- Insignia Towers (phase 1) – 322 units
Total new units planned for 2011 = 1062
- 2nd & Virginia (north) – 240 units
- Candela Hotel & Residences – 80 units
- Civic Center – 138 units
- Denny & Yale Tower (phase 1) – 150 units
- Heron Condo & Hotel – 200 units
- Insignia Towers (phase 2) – 322 units
- Martin, The – 170 units
- Stewart & Minor Lofts – 160 units
- Western & Lenora – 116 units
Total new units planned for 2012 = 1576
- 2nd & Virginia (south) – 185 units
- Denny & Yale Tower – 150 units
- Pagoda Condo – 200 units
- Trophy Tower – 19 units
Total new units planned for 2013 = 554
Here is an excerpt from the Puget Sound Business Jouranl: Seattle’s condo pipeline expected to dry up.
Midby (principle of Lexas Companies) said the drop-off in the number of condos available will drive up the price, penalizing the picky buyer. “The ones that are milling around are going to have to grab a seat or they’re not going to get the product they want,” he said. “We know there’s going to be a lot of scarcity between now and then.”
Between now and 2013, Seattle buyers will be crossing their fingers that all 6,255 homes will be built and banks loosen up on financing of new construction. Over half of the new projects that have yet to break ground have yet to get financing approved. Buyers themselves will also see some difficulty in getting loans due to the credit crunch.
Many areas of the real estate industry (sellers, Realtors® and developers) have been scratching their heads wondering where all the buyer’s went. Rates are low, Seattle job growth continues to be one of the nation’s strongest, rental vacancies have declined dramatically, and local demand isn’t those of investors (flippers). So, has the market busted, or can we expect another hot trend in Seattle real estate?
Is there really any demand? We are constantly bombarded with media telling us that market time and inventory is increasing. That pendings and solds are decreasing. So are there really a lack of those willing and able buyers or, are they renting ever-increasing high priced rentals waiting until “the market to hit bottom.” What about the population growth? It’s certain that since the announcement of Amazon and Microsoft moving to downtown, along with the Bill and Melinda Gates Foundation, the desire for condominiums in the urban core is increasing. Another recent fact to consider regarding residentail real estate is the current boom in commercial space. With 5 million new square feet of commercial space, each 1,000 creates approximately 4 jobs! The picture for ‘demand’ is clear. A LOT of jobs are coming to downtown Seattle.
Is there too much supply? Were you planning on attending the symposium today? Many of the new developments are “postponed” or will never be built. The other half of the graph above (displayed below) gives a approximate representation of how many new residential condos we can actually expect.
Here’s an excerpt from Dean Jones at Realogics, Inc.:
Meanwhile, rising construction costs and a national credit crunch will continue to compromise new construction deliveries beyond 2010. These new projects are delayed by the “new rules” of real estate lending that is requiring more presales, more equity (lower leverage), and far more conservative development proformas. This all adds up to higher costs for the developer as well as the buyer, which burdens the further introduction of new projects to the market at this time. Specifically, unless a considerable amount of this proposed inventory enters the marketplace for sale in 2008 and provided it subsequently breaks ground by 2009, the current “buyer’s market” temperament will likely transition to a “seller’s market” as demand outstrips supply by 2010 or sooner.
Seattle’s subsequent market has had the benefit to learn from what we’ve seen in Miami, Pheonix and Las Vegas. Investors who bought into a building with the intent to flip created artificial demand by buying out projects within a short amount of time. This in turn fooled future developers of the market’s actual demand. This is nothing in comparison to our small time “flipper” issue we’ve seen at 2200 Westlake and The Cosmpolitan.
What’s the outlook? As we move closer to occupancy dates, we’ll see more activity with presales. By 2010, more than 1,000 new construction sales are expected (which excludes resales). The urban lifestyle has become a more popular trend, gas prices are rising with no sign of stabilizing, rental rates are apparently affordable, and we have yet to see the tidle wave downtown’s new workforce. Higher construction costs more strict requirements for developers are causing them to require more presales before financing is even approved.
CLICK IMAGE TO ENLARGE
What’s next? Here are some indicators to watch for when judging what direction the market will go in:
- JOB GROWTH – Amazon, Microsoft, B & G Foundation, WAMU
- COMMERCIAL REAL ESTATE – New Commercial Construction, Vacancy Rates, Lease Rates
- RESIDENTIAL RENTALS – Vacancy Rates, Average Rent
- FINANCING – Condo Developers/New Projects, Condo Buyers, Credit Crunch
- MEDIA – Cosumer Confidence, Election (historic optimism of new President), National vs. Local Real Estate, National vs. Local Economy
- INTANGIBLES – Gas Prices, Energy Costs, Commute Time, Environment, Lifestyle, Safety, Government/Urban Growth Management
This is a very important time for Seattle. As mentioned before, we are optimistic about where the market is today and were it will be tomorrow. Expect much more on this topic over the next couple of days.
Graphs provided by Realogics, Inc.
Delivered as a message stating that more time is needed to complete their research for a more informative symposium in the future, this weekend’s Urban Condominium Real Estate Symposium event for April 27th, 2008 has been canceled. No other message was given as to problems that may have caused a short, 2-day notice but now potential buyers can now attend open houses and start making offers.
Maybe the cause is a lack of registered attendees, too many attendees were registered as Realtors, or that they really feel unprepared. We’ll be following up to see if we can get details as to why there was such a short notice and an approximation on when it may be rescheduled.
To disassemble the tower crane, general contractor Lease Crutcher Lewis stationed one of the West Coast’s largest mobile cranes to the west of the building, along Western Avenue. Transportation of the mobile crane’s parts to the site required 14 semi-truckloads. Operators used the mobile crane first to remove the jib, counter jib, mast and operator’s cab, and then to dismantle sections of the tower crane from top to bottom, finishing with removal of the crane’s base. The tower crane’s components will be hauled away in 12 semi-truckloads. The mobile crane reached 300 feet from lower Western Avenue to the top of the First Avenue building, making it the highest, longest “pick” in the area. Lease Crutcher Lewis can now finish the interior spaces the crane had occupied on eight of the 21 floors.
Condo Only, NWMLS Area 701 (Belltown & Downtown Seattle)
Numbers are starting to show more of a balanced market than previous weeks which have been dominated by a buyer’s advantage. Compare to previous weeks by clicking market trends at the top of the page.
Grocery shopping has been a challenge for many downtown area residents, but owners of the historic Kress Building signed a 35-year lease with The Myers Group who will be operating the 18,000 square foot supermarket. Currently there’s really only 2 places to buy groceries downtown; Ralphs on 3rd and Lenora and the new Whole Foods at 2200 Westlake in the Denny Triangle.
Now those who will be living at the Newmark, 98 Union, Fifteen Twenty-One, AVA, Olive 8, and the Four Seasons will be able to conveniently do their shopping just a block or two away from home.
Newspaper articles announcing the much needed addition confirmed that the new store will not offer parking, but plans to offer delivery.
Address: 1000 1st Ave., Seattle, WA 98101
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Madison Tower places you in the heart of Seattle’s vibrant downtown and waterfront districts. The Weber + Thompson 24-story high-rise features 47 luxury homes above Hotel 1000; a boutique hotel. Owner have the luxury of all the amenities the hotel offers… from room service and valet parking to private chef services, housekeeping services, and spa treatments. Floorplans range from 845 to 2300 square feet and original prices ranged from $545,000 to $2,250,000.
- Year Built: 2006
- Number of Units: 47
- Number of Stories: 24
- Exterior: Cement/Concrete
- Parking: Common Garage
- Pets: No Restrictions
- H/O Dues Included: Cable TV, Garbage, Water/Sewer
- Common Property Features & Amenities: Business Center, Cable TV, Concierge, Elevator, Exercise Room, Rooftop Deck, Spa, Virtual Golf
- Alexis Hotel
- Arundel Books
- Aveda Salon
- Bookstore Bar & Cafe
- Greg Davidson Antique Lighting
- Legacy Ltd
- Parfumerie Nasreen
- Scandia Jewelers
- Taboo Video
- Watson Kennedy Fine Home
ADDITIONAL OPINIONS & REVIEWS
*Data is deemed to be reliable, but not guaranteed. In some cases, number of units may include commercial and residential spaces and/or height may or may not include a 13th floor.
We have multiple interested parties who have contacted us regarding the Newmark Tower and Waterfront Place. Our clients prefer a western facing unit at the Newmark, and anything at Waterfront Place. If you own one of these units and would consider selling, have your agent contact us, or contact me directly.
I just discovered a new blog by Scott Thompson with Weber Thompson Architects this morning. The blog is currently about their new location at the Terry Thomas building where Scott proudly discusses their focus on green design and sustainability. The new home for Weber Thompson (as of April 4th) is located appropriately in Seattle’s South Lake Union neighborhood on the corner of Thomas Street and Terry Avenue.
…strategically positioned to take advantage of all the current and future amenities this exciting area has to offer, including being one block from a Streetcar Station and just blocks from Whole Foods Market and Denny Park. Built eco-friendly with an emphasis on sustainable design, the Building features operable windows, an interior, open-air courtyard and a passive cooling system. When completed the owners will apply for LEED GOLD certification.
They’re also encouraging people to contact them for a personal tour of the new building. Weber Thompson’s portfolio includes other familiar/downtown area projects such as:
- Madison Tower
- 1915 Second
- Fifteen Twenty-One
- 2200 Westlake
- Expo 62
- 6th and Wall
You can search active condos for sale and review building facts on this blog for: