New condo projects come with real challenges. Recycle and buy a gently used condo instead.
I’ve never been an advocate for new condo developments downtown. For many reasons new condos are of course beautiful. But are they worth the cost? That’s what we will dive into today!
I get wowed by new development condos projects in downtown Seattle just the same as anyone else. When I was more green in real estate this was even more true. But as I age (gracefully I should add…) I’ve learned a few things. New projects come with real challenges.
My least favorite part is of course the price. Nexus is trying to sell their condos at 902-1,900 per square foot!!! With a median price per square foot of $1,350. WHAT??? Yes you get an amazing building with amazing amenities but let’s face it. That is a TON of money! Those price might be normal in four years but they sure aren’t today. And for all that, you get a bunch of blocked up views with a lot of potential for more blocked views in the future. In fact all new buildings have the issue because they are being built where things still can be built in downtown Seattle. Save that for rich girls and not this one!
The second big problem I have with new buildings is the number of investors that buy in each new building. You need look no further than Insignia to see what I’m talking about. Investors LOVE to buy up units in a building offering pre-sales like Insignia did. They don’t have to close, make payments or even own it in some cases while the market prices on condos continues increasing. The building finishes two years later, prices are up 30% and they all have the great idea to sell. The ones that don’t get what they want end up renting. All the while you have low appreciation numbers in that building because thePl stream of for sale units continues years after completion. You are always competing with other units because everyone tries to sell. I like my homes to make money honey! Which brings me to my next point…
You are paying a premium.. Now you might also note that the HOA dues typically increase pretty dramatically. Not to mention many of the new buildings go into litigation with the developer about 4-5 years after contraction. Kiss even more money goodbye! You cannot sell your unit while the building is in litigation. Banks will not lend and your values will plummet. Although, I do tell my cash buyers this is the time for a deal because the building will recover. Also, new buildings always entice buyers in with SUPER low HOA dues. This is VERY temporary of course. Let’s look at 1521 2nd Ave as our example. The dues on unit 2403 in 2009 where only $871. By 2013 they were 1061 and today they are $1170. So don’t get suckered in by the low HOA (Insignia)
So what to do… Well as a savvy fashionista knows you should find a timeless building, in an area where development is limited and where your views are “safe.” Find it in a good area too with MASSIVE walkability. Which brings you to our favorite building and a plug for our new listing! Meridian Tower embodies all the things I love about a well crafted, well designed building. The mix of steel, brick and glass are timeless. Plus, you can walk to EVERYTHING. The location is so much better than Luma, Nexus, or Insignia that I find it hard to believe that people are even buying those units at those prices. Plus no view obstructions can happen at Meridian. The tower is up a hill and 27 stories tall. Little known fact, this building is THE place to be in a major earthquake. The whole building is on rollers with an isolated foundation, counter balances on top, and a HUGE back up generator that even the convention center uses in the case of an emergency. On the cusp of Downtown Seattle, Capitol Hill and First Hill you can’t really ask for a better spot to buy a condo in Seattle.
In summary, just remodel an older condo for better value or buy one (like ours) already remodeled. $967 per square foot is SO MUCH better than $1,350. If you buy one un-remodeled you might be looking at $800 per square foot. For those of you counting that is a saving on a 1000 square foot unit of $500,000. You can renovate 4 units for that amount of money with our team. Just saying! In summary, if you are a huge risk taker and don’t care about money then a new building is for you… For everyone else, you can do better with a tried and true building in a great location.