Condos in King County still expensive and scarce
The Seattle Times recently reported that in November, there were only around 350 condominiums on the market in King County – a record low when compared to the same month in previous years. Because of low inventory, condo prices continue to rise. Of the (only) 58 condos listed for sale in the Downtown/Belltown area at the beginning of this month, 35 percent had an asking price of $2 million or more.
Condominiums have long provided an avenue to homeownership for first-time buyers. They also provide a great alternative for current owners who want to downsize. This is especially true in Seattle’s current market of low inventory and rapidly rising prices. Although we lead the nation in the number of construction cranes, most of those housing projects are for apartments, not condos.
According to a study by the University of Washington’s Runstad Center for Real Estate Studies, the state’s condominium law is part of the problem. Its strict liability provisions make the cost of insurance and construction much higher. To avoid expensive lawsuits down the line, developers are sticking with apartments, which don’t pose the same liability risk but bring in similar profits. The few condos currently under construction are priced for the luxury market and higher end buyers to cover the added liability costs borne by developers.
“Wealth inequality is the major economic issue of our time, and we know that individual homeownership is one of the few ways that middle class people can get ahead. The Washington State Condominium Act is well meaning, but unfortunately has metastasized into policy that inadvertently redlines entire neighborhoods from creating affordable condo and townhome homeownership options,” said Michael Orbino, 2017 Vice President of Governmental Affairs for Seattle King County REALTORS® and Chair of the Washington REALTOR®’s Condominium Work Group. “That lack of added housing stock exacerbates the record low affordability of single-family homes and makes it nearly impossible for many people to ever think about purchasing, which hits our most vulnerable populations the hardest.”
REALTORS® continue to push for inventory solutions, including condo affordability, to ease pressure on our stretched market.
“There is a whole generation who want to be homeowners that should have that opportunity to build equity as we did, but it just isn’t available to them. A freer flowing condominium market would help that,” said Peter Orser, Chairman of the Advisory Board for the University of Washington’s Runstad Center for Real Estate Studies and Member of the Washington REALTOR®’s Condominium Work Group.
Seattle King County REALTORS® is working with Washington REALTORS®, local elected officials, and affordable housing advocates to take the issue of expanding affordable homeownership options to Olympia this coming year. For more information, contact Seattle King County REALTORS® Government Affairs Director David Crowell.