Bringing condos back to Seattle
Despite recent growth in new listings, first-time home buyer opportunities in our market are scarce. Buyers know it, and brokers with frustrated clients who can’t afford to break into the Puget Sound region’s market know it too.
James Young, Director at the Washington Center for Real Estate Research (WCRER), visited the Seattle King County REALTORS® Government Affairs Committee meeting this week to talk about what happened in the market to get us here. “They’re building more condos in Boise than in Seattle right now,” said Young. “There’s a very clear imbalance in terms of what’s being supplied to our market.”
Each time a new condo project comes around and buyers line up and wait for hours in the hopes of snagging one, it’s clear: the demand for condos is there. Young’s research provides insight into why the law of supply and demand isn’t exactly working here like it should.
“Developers aren’t building condominiums because of all kinds of risk,” said Young. “Under the current liability regime, there’s a 100 percent chance that [developers] will get sued.” Instead, developers are taking the safer bet in building apartments. In the Seattle metro area, the number of single family building permits has been much lower than that of multifamily over the last several years.
Source: James Young, Washington Center for Real Estate Research
The lack of condo construction leads to a “missing middle” in the market – without affordable, entry-level homes to buy, the rental markets expand to fill the vacuum left behind. This in turn drives up rent, leading to a host of other issues, including a rise in homelessness and whole swaths of younger people who are missing out on the chance to build equity through the purchase of a home.
The good news? “Condo liability is the big issue preventing their development, and it’s the one issue that can be solved.” Stay tuned for more updates on what Seattle King County REALTORS® and Washington REALTORS® are doing with the Legislature and stakeholders to bring more entry-level homeownership options to the market.