Stroupe Scoop: May 2009 Sales Stats, Featured Building, & Featured Listing

This month we have featured The Parc as the building of the Month.  We also have a new featured listing at Toscano which is on the South Slope of Queen Anne.  This unique new listing features 2 side-by-side parking spaces and captivating views of Seattle city lights from any one of 3 private decks.

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King County Weekly Condo Sales Ratios for June 24th, 2009

Condo Only, NWMLS Area 701 (Belltown & Downtown Seattle)

No Doubt ENSO Buyers Will Walk Away VERY Happy!

The brokers open was certainly shoulder to shoulder last night.  Sea Star even seemed to run out of sushi early, and everybody got a pair of free slippers.  So far, everyone seems to be impressed, and Matt points out some staggering numbers when it comes to pricing.  Current buyers are being contacted today and tomorrow to discuss discounted pricing that was mailed to them last month.  There’s really not much we can say that Matt or Ben hasn’t said already.

We do feel it’s important to give credit where credit is due, and that is to Vulcan for taking aggressive action in adjusting to the market.  We’re also happy that they’ve allowed us to come in and take pictures since it’s been difficult to do with Vulcan properties in the past.

The bottom line is that ENSO is (as if it hasn’t been said already) priced to sell.  Everybody agrees that the finishes are very nice, and the location is across the street from the already well known booming South Lake Union neighborhood.

We did head back today to snap a few shots of the 2-story loft where Williams Marketing agents will be fortunate enough to set up as their office.

Amenities are limited, and HOA dues are still TBD.  But what ENSO does have is also very nice.  Buyers are looking at one of the larger club houses with an outstanding outdoor patio equipped with B&W outdoor speakers.  The fitness room is also not only well equipped, but incredibly spacious.

Here are some more photos we took of some 12th floor units, and one of the top floor penthouses.

If you would like to arrange a showing for any of these units, contact us to set up a time at your earliest convenience.

FHA Spot Approvals for Condos Being Eliminated

Spot approvals for FHA loans are said to be cut in October, however investors have to buy the loan, then sell back to FHA.  Therefore, investors may cut spot approvals sooner than October 1st.  One of our preferred lenders has done several for us, and has recommended that if anyone is looking to make a purchase using a spot approval, it would be wise to do so sooner than later.   Although buyers will be able to still get FHA loans on FHA approved properties, options will be extremely limited considering many of the older buildings downtown still have not yet been approved. Currently, the following FHA Spot Approval Guidelines must be met:

• The legal documents of the homeowners association do not contain a right of first refusal or restrictive covenant.
• The unit is part of a condominium regime that provides for common and undivided ownership of common areas by unit owners.
• The project, including the common elements, and those of any Master Association, are complete and the project is not subject to additional phasing or annexation.
• (a) There are no special assessments pending.
  (b) No legal action is pending against the condominium association, or its officers or directors.
• The common areas have been under the control of the homeowners association for at least one year.
• At least 90% of the total units in the project have been sold.
• At least 51% of the total units in the project are owner-occupied.
• There are no adverse environmental factors affecting the project as a whole or individual units.
• No single entity owns more than 10% of the total units in the project.
• The units in the project are owned in fee simple or the units are held under a leasehold acceptable to FHA.
• The homeowners association has adequate common area insurance coverage. General liability, replacement coverage, etc., reflect the character, amenities and risks of the particular development. Flood and other insurances should be carried when applicable.
• General maintenance level of common elements is acceptable and there is no deferred maintenance, based on the comments by the Appraiser and/or the pictures.
• The homeowners association has a reserve plan and a reserve fund, separate from the operating account, that is adequate to prevent deferred maintenance.
• (a) For projects consisting of over 30 units, no more than 10% of the total units are encumbered by FHA insured mortgages.
  (b) For projects consisting of 30 units or less, no more than 20 percent of the total units are encumbered by FHA insured mortgages.

Developers now apply for FHA approval of the entire project during development, but with the lack of supply Seattle is expected to have, getting a FHA loan can be more difficult come the final quarter of the year if you’re seeking a unit in a building that has yet to get approval. Contact us for more information.

New Lake Union Condos at Wards Cove: The Enclave

While developers are stalling on new projects, Trinity Real Estate, Inc released plans for a new 21-unit lakeside community today at Wards Cove–Lake Union.

SEATTLE, WA. (June 24, 2009) – Officials at Trinity Real Estate, Inc. today released plans for their newest project “The Enclave”, a 21-unit lakeside community nestled within the 5-acre redevelopment known as “Wards Cove” on Lake Union. The coveted site is considered by many the last of its kind on what is now a largely built-out waterfront in King County. Its developers say that the project is designed like a horizontal high-rise from a quality standpoint but unlike a high-rise, The Enclave can be developed in distinct phases to help with construction financing. The announcement arrives at a time when few, if any, new developments have commenced since the onset of the commercial credit crunch in the summer of 2007, two years ago.

“It’s one of those rare never before, never again opportunities that developers cherish,” says Michael Yukevich, Investment Manager and partner in Trinity Real Estate, Inc. “It’s an irreplaceable location and an unparalleled opportunity for our homebuyers to own the quintessential Seattle lifestyle.”

Amazingly, construction will start this year, and occupancy is planned for 2010!  The new lakeside community will consist of three-level, two bedroom plus den homes ranging from 2,500 to more than 3,000 square feet.  Homes will come with private garages and options include private elevators.  Additional amenities include access to the Wards cove Marina Club which includes a fitness center, conference facility, guest suite, and full-service moorage.

“The Enclave provides a compelling alternative to high-rise condo living by putting the penthouse right on the lakefront,” says Nick Glant, the listing agent with Northwest Group Real Estate. “For those that desire the sea, city and sky – we’ve got your address.”

Introductory pricing will start just over $1 million and Dean Jones (president of Realogics, and who will be marketing the boutique address) feels that the announcment and decision to move forward is a “savvy development practice right now.”  In the press release, Jones points out that today, new homes need to offer more unique attributes to make a difference.  For Seattle boaters, this may be a perfect chance to get an in-city home that has yet to come to our market–and never expected to come available again.

Belltown Park Boulevard Proposed

There’s been quite a bit of talk recently over developing the first park boulevard for Seattle along Bell Street in Belltown between 1st and 5th Avenues, coupled with  mixed opinions on what it would do for the area.  An article in the Seattle Times shows a lot of comments which of course express concern for crime potential.  Some Belltown residents (and those from surrounding areas) feel that increasing the area into a much larger park will increase drug activity and allow for more homeless people to find shelter.

And, turning the area into a park would transfer the jurisdiction of the area from the Transportation Department to the Parks Department.  As a result, center-city coordinator  with the Department of Planning and Development Gary Johnson said the area would get a “much higher level of maintenance.”   Additionally, property values would be expected to increase since studies have shown parks generally have a positive affect on values.

The Times article also mentioned a valid concern from an employee at Mama’s Kitchen who expressed concern for potentially losing business since parking would become more scarce.  However, making a more walkable area could bring more Belltown residents out of their homes and out exploring a little more.

Money is also a concern but when looking into the concept further, it really won’t cost anything since the estimated cost is under 2% of an already $146 million parks levy approved by voters last year.

Time will tell if the boulevard becomes reality.

Multiple Mortgages to One Borrower

Our buyer activity has picked up and we have also received more interest from investors who are looking to purchase blocks of condominiums. Therefore, we wanted to take a minute to explain some details on how multiple mortgages to one borrower works.

First off, in addition to a borrowers principal residence, a borrower may own up to nine additional properties on Fannie Mae loans if the mortgage is secured by a second home or investment. If a borrower currently owns five to ten  properties, then certain conditions must be met. Also, a borrower must not be affiliated with the builder, developer, or seller on the property.

Because owning multiple investment properties can affect the ability to repay mortgage debt if for some reason the property was to remain unrented for an extended period of time, Fannie Mae does require a borrower to be secured by investment properties that have a financial reserves.

The following guidelines must be met for investor and second home borrowers who are interested in owning five to ten financed properties:

Eligibility Requirements for Five to Ten Financed Properties

Transaction Type	Number of Units	Maximum LTV/CLTV/HCLTV	Minimum Credit Score
Second Home or Investment Property
Purchase	1 Unit	75/75/75	720
Limited Cash Out Refi	1 Unit	70/70/70	720
Investment Property
Purchase & Limited Out Refi	2-4 Unit	70/70/70	720

Additionally:

• No history of bankruptcy of foreclosure within past seven years
• No 30 day delinquencies within the past 12 months on mortgages
• Rental income must be documented with two years of tax returns, regardless of the DU condition
• Borrower must sign and IRS Form 4506 or 4506-T at application and those IRS transcripts must be obtained prior to closing the validate the accuracy of the tax returns (potential 30 to 60 day process)
• Reserve requirements must be met for the subject and all other properties currently owned
• Does not apply to Renovation or One Step loans which restricts borrower to four financed properties
• Must run through DU and then submit to underwriting for review with IRS transcripts

Reserve Requirements for Investment Properties and Second Homes

• Six months reserves are required for all investor transactions.
• When borrower owns one to four financed properties, requirements are:
  • 2 months reserves on subject property if 2nd home
  • 6 months reserves on subject property if investment property AND
  • 2 months reserves on each other financed second home or investment property

• When borrower owns five to ten financed properties, requirements are:
  • 2 months reserves on subject property if second home
  • 6 months reserves on subject property if investment property AND
  • 2 months reserves on each other financed second home or investment property

Reserves are defined as all components of the monthly housing expense. All of the following must be included when calculating the appropriate reserve requirement:

• Principal, interest, taxes, insurance
• Ground rent, special assessments or any owner’s association dues
• Any subordinate financing payments on mortgage secured by the subject property

Need additional information? Contact us.

…and the “Best of the West” Award Goes to:

We are delighted to present to you a press release just sent to us by Nyhus Communications.  And, we’d like to add, Congratulations!  Well deserved!

Seattle’s Fifteen Twenty-One Second Avenue Earns Two Prestigious Awards in the “Best of the West” Development Competition
Pacific Coast Builders Conference Highlights Ongoing Success for the 440-foot Condominium High-Rise

SEATTLE – June 23, 2009 – Opus Northwest, today announced that its Fifteen Twenty-One Second Avenue condominium development in downtown Seattle received two honors at the 47th annual Gold Nugget Awards.  At the awards ceremony – the premier event at the Pacific Coast Builders Conference – Fifteen Twenty-One Second Avenue won the top award for “Outstanding Attached Project – High-Rise for Sale” and received an “award of merit” in the category of “Sustainable Residential Neighborhood – Attached Home.”  Another Opus project, Canvas LA, won an award of merit for “Residential Community of the Year – Attached.”

The Gold Nugget Awards program honors creative achievements in architectural design and land-use planning for residential, commercial and industrial projects.

“Relevance keeps the Gold Nugget Awards at the forefront of design/planning competitions, as our 2009 winners demonstrate,” said Judging Chairman Peter Mayer of Peter M. Mayer Productions.  “The Merits and Grand awards represent an amazing diversity of locales, projects and design and planning firms.  Gold Nugget winners share one common denominator: excellence and innovation in addressing complex design/build issues.”

During a three-day judging process, a panel of eight industry professionals from across the country selected Award of Merit honorees and Grand Award winners from a field of hundreds of entries representing 14 Western states and international high-rise markets as far away as China and Dubai.
Judges acknowledged a long list of design innovations at Fifteen Twenty-One Second Avenue, including:

• The first “tall and skinny” residential tower under a new zoning code (440 feet tall)
• Elimination of traditional terraces in favor of indoor/outdoor solariums
• Unobstructed views of Elliott Bay from almost every home (even those on the east side of the tower)
• Larger-format, two-bedroom homes averaging 1,950 square feet (twice the size of typical condos)
• The first luxury high-rise anticipated to achieve a “silver” LEED rating

All new concepts were exhaustively test-marketed during the tower’s design and were key differentiators leading to impressive sales statistics today.  The project was designed by Seattle-based architectural firm Weber Thompson and Opus Architects & Engineers is the architect of record.
“We’re very proud of both the design and our ongoing market success,” said Andy Taber, Senior Real Estate Director for Opus Northwest – Seattle, who accepted the awards on behalf of his development team. “These acknowledgments reinforce the civic role that developers play – to challenge convention and to listen to the marketplace when designing new communities.”

Taber says with an average purchase price of more than $1.9 million, homes at Fifteen Twenty-One Second Avenue are bucking the trend of a regional housing market slowdown, which is more acute in higher price ranges.  The project’s sellout pace since opening in January remains steady at one new home per week, bolstering its reputation as the most successful condominium on the West Coast.  The development, near Pike Place Market, was also noted for contributing half of the top 25 residential sales closed in King County in recent months.  To date, 81 of the 143 homes have closed with many more scheduled over the coming weeks and months.

King County Weekly Condo Sales Ratios for June 17th, 2009

This is the first time we’ve seen any “seller advantage” in the 7 week averages since September of ’08.

National Publication Reports Seattle Market as “Tight”

Business Week Magazine online featured an article about Seattle’s prevention of overbuilding last week, which clearly favors an optimistic view for current homeowners.  Consultant Richard M. Gollis, founder of the Concord Group in Newport California, was quoted as saying, “Give sales, demographics, and job growth, we expect the inventory in Seattle to burn off faster than in other markets.”

Just based on the city’s physical demographics alone, a local builder points out additional constraints when building, since the city is between the Puget Sound, and Lake Washington.  While the supply of homes nationally averages a rough nine months to swallow, Seattle’s estimated supply is an estimated five months.

“…cities with low inventory will bounce back sooner than the rest of the U.S. Tight supply in Seattle—much like in Dallas, Denver, and Portland—should set the stage for recovery in the next year or so.”

Still, many are waiting for the Seattle market to hit bottom, as if the city hasn’t already.  With Miami looking at a 40-month supply, numbers and expectations are skewed.  However, the article gives an example of homeowners who have recently received multiple (five) offers the day after going on to the market.  Additionally, we ourselves have had a buyer inquire about two properties that are now already pending.

Seattle, Washington

Building restrictions—and the city’s unique geography—should help lift prices

POPULATION
2,496,619

2007 MEDIAN HOME PRICE
$437,920

2008 MEDIAN HOME PRICE
$395,000

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