272 Less Rental Units in Belltown, Rents Expected to Rise

There have been several rants posted about the teardown regarding the infamous McGuire apartment building, which has been an eyesore in Belltown for years.  The scaffolding has been leached along side the exterior for what seems like ages, and now infamously blends well with the building’s paint job.

First off, this is a positive story for a couple reasons:

1. It’s the most interesting thing so far this year!  As opposed to a decline in home prices, or more fallout in the mortgage industry, the biggest news to hit the downtown Seattle market is the teardown of an ugly building. 
2. For those who have investments downtown, there are now 272 less rentals available, and several people are expected to raise their rental rates somewhere around $100+ more per month.  This will influence supply and demand.

The questionable part of this news was brought to attention by Tim at SeattleBubble.com…

This brings up an interesting question to me. Eight to ten years from now as the plentiful high-rise products of the housing bubble begin to age, how many similar situations will we see cropping up? With this so-called “upscale” apartment being torn down after less than ten years, I can’t help but wonder just how much attention to detail was really given to the latest batch of towers as developers rushed to cash in on the gold rush.

Tim brings up an excellent point.  Nine years ago, during the beginning of Belltown’s condo boom, the neighborhood was just starting to plant its roots of a residential urban community.  Now, almost 10 years later?  One of Seattle’s most respected architects also said this about the building on Facebook, “Top notch developer/architect/structural engineer on this project, it makes no sense.”

Now, when is demolition day and who’s selling front row seats?  Will there even be a demolition, or is it actually going to be “dismantled”?

Maybe now that prices on condos are agreeably low, many of these high-end paying renters may see this as a good time to buy… .

What’s the Market Like?

Almost all newspapers across the country referenced increases in home sales on the front page over the last few days.  However, all stories have been careful to recognize if the market has in fact hit bottom or not.

The Multiple Listing Service reports the first quarter of 2009 to have 52 sales.  The first quarter of 2010 reports 103.  Loan applications have also been reported to be on the rise in addition to a slight increase in the median price of homes in King County.  Most of the activity is of course hypothesized to come from expected increases in interest rates, and the expiration of the homebuyer tax credit.

King County house prices post year-over-year rise for first time in 2 years (article):

Tim Ellis, who edits the real-estate blog Seattlebubble.com, said in an e-mail that he expects Seattle-area sales to continue to rise through May, then plateau and maybe drop in the summer and autumn after the tax credits expire.

We’re of course optimistic in that housing sales will continue, and agree with Tim that prices will continue to be flat.