Massive Condo Oversupply on the North End

In keeping with the old cliché that “all real estate is local,” let’s take a moment to look at one local market: Kenmore townhomes and condos. I selected Kenmore because it happens to be where I live, so I am pretty familiar with the area and what projects have been built over the last couple years.

Here’s a summary of five major projects in Kenmore that have been built / converted since

Trail Walk Condominiums – 2007 conversion – 180 units – ~69% sold
Northshore Kenmore – 2008 new construction – 86 units – 0 (?) sold – (more in this forum thread)
Coventry Place Condominiums – 2007 conversion – 96 units – ~82% sold
Vermont Condos (website defunct) – 2008 conversion – 54 units – ~6% sold
Copper Lantern Homes (low income) – 2009 new construction – 0 sold

5-Project Total: 449 units, ~57% sold.
Total Unsold Units: ~157

From October through January, there were a grand total of 59 closed sales of all types (SFH, townhome, condo) in all of Kenmore reported by the NWMLS. That’s an average of about fifteen sales per month. In other words, just between these five townhome/condo projects, Kenmore has over ten “months of supply.”

It’s even worse if you only look at condo sales, of which there were a grand total of two in January. Two.

Meanwhile, over in Woodinville, a 2006 condo conversion called Timber Ridge has at least one unit on the market at half of what it sold for in 2006.

2006 sale price: $200,900
Current asking: $99,900

Half off. I shouldn’t be surprised, but somehow I still am.

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

29 comments:

  1. 1
    Bernie says:

    you wouldn’t happen to know about the condo numbers in Ballard would you?

    Rate this comment: Thumb up 0

  2. 2
    deejayoh says:

    February home sale stats just posted on the Times. Prices back to June 2005 levels

    Home sale prices continue to decline in February in Puget Sound area
    The median price of a single-family home in King County dropped to $375,000.

    By Eric Pryne

    Seattle Times business reporter

    Home sale prices in King County continued their long slide in February, according to numbers released today by the broker-owned Northwest Multiple Listing Service.

    The median sale price of a single-family house that closed last month was $375,000, down from $382,500 in January and $429,900 in February 2008.

    The Eastside saw the greatest year-over-year drop — 18.5 percent — while Shoreline, Lake Forest Park and Kenmore experienced the smallest decline, 7.1 percent.

    The number of sales that closed last month in the county was down 42 percent from a year earlier, while the number pending sales — offers that have been accepted but haven’t closed — slid 21 percent.

    But closed sales were down only slightly from January’s total, and pending sales were up.

    Rate this comment: Thumb up 0

  3. 3
    Irene Dorang says:

    RE the Timber Ridge condo, defnitely prices have dropped, however if you read the listing this unit is also affected by the fact that the homeowner association is suing the developer and lenders are currently not willing to finance any purchases here. In other words, it’s not an ‘all other things being equal” situation.

    Rate this comment: Thumb up 0

  4. 4
    tim says:

    Would be great to see an analysis of West Seattle. I don’t see much on here about this area.

    Rate this comment: Thumb up 0

  5. 5

    It’s over!!

    The real estate hiccup and recession are over. The Dow has gained over 240 points as of now and Microsoft has gained almost 3%. And Obama is getting together a plan to bailout homeowners. I also hear he is working on getting more Immigration here (H1-B’s as one example) as well as so I figure many of those New Americans can buy housing too.

    My suggestion to you people here is Buy now or be priced out when the President’s plans come into full effect. Most likely by the end of the year. And I am saying all of this as a favor to you all.

    Rate this comment: Thumb up 0

  6. 6
    Dash Pointer says:

    I’m sure oversupply won’t translate into upwards rent pressure. Or, I will everything magically pick up come spring?

    Rate this comment: Thumb up 0

  7. 7
    TheHulk says:

    Wow. Already at 50% off peak and no takers. Looks like we are officially into Sniglet territory for these condos.

    Rate this comment: Thumb up 0

  8. 8
    Kary L. Krismer says:

    RE: deejayoh @ 2 – I haven’t had a chance to fully digest those numbers, but the 661 sales is less than I expected (although I did expect under 700), the median SFR is slightly less than I expected, and the median pending is higher than I expected, but still a VERY low $359,590, which means further declines are likely the next two months. The mean was up over January though.

    Rate this comment: Thumb up 0

  9. 9
    seattlerenter says:

    You realy should look into verdeaux new construction right off of 160th on the bothell kirkland border. I live half mile from there and have never seen more than 5 cars in the parking lot. They were renting after being for sale for over a year now still selling and I can’t tell if they are for rent still. We checked them out last summer and had about 6 sales out of over 100 units, I don’t think it is much better now.

    Rate this comment: Thumb up 0

  10. 10
    Crashback says:

    RE: TheHulk @ 5
    The one is a special case. The comments in the listing explain that due to a lawsuit between the developer and the HOA no bank will provide funding.
    I think this is especially interesting because the $99k is the cash, no credit price for that condo. It is a case study of what hapens when credit absolutely dries up.

    Rate this comment: Thumb up 0

  11. 11
    Thomas B. says:

    I love what passes for “low income” housing around here. http://copperlanternhomes.com/

    For the price of a one bed / one bath low income townhome in Seattle, I bought my 4 bedroom / 3 bath house in a private gated community in San Antonio, TX. Talk about price distortion in Seattle.

    Rate this comment: Thumb up 0

  12. 12
    seattlerenter says:

    Wow low income but look at the HOA fees up to $279 a month.

    Rate this comment: Thumb up 0

  13. 13
    DaveyDave says:

    RE: Eastside Realestate Agent @ 5 – Welcome back Eastside Realestate Agent — you have been sincerely missed.

    Rate this comment: Thumb up 0

  14. 14
    singliac says:

    RE: DaveyDave @ 13

    ditto. we missed you buddy.

    Rate this comment: Thumb up 0

  15. 15
    DaveyDave says:

    RE: Eastside Realestate Agent @ 5 – Oh, just one more thing ERA. As DJO points out @2 above, the NWMLS numbers are out for February. The Eastside (area 530) has seen a 17% drop from Feb ’08 to Feb ’09. That’s a median drop from $575,000 to $477,500 in one year — about $100k. I feel your optimism…

    Rate this comment: Thumb up 0

  16. 16
    EconE says:

    I Love Eastside RE-Agents posts.

    Satire is good.

    The most interesting thing about Obama’s homeowner rescue program, is that it can’t/won’t keep prices at their inflated levels.

    It can/will keep people “priced in forever” however…and it most certainly won’t help them keep their slopeside and beachfront vacation condos and houses.

    Tahoe anyone?

    Rate this comment: Thumb up 0

  17. 17
    Kary L. Krismer says:

    By Crashback @ 10:

    RE: TheHulk @ 5
    The one is a special case. The comments in the listing explain that due to a lawsuit between the developer and the HOA no bank will provide funding.
    I think this is especially interesting because the $99k is the cash, no credit price for that condo. It is a case study of what hapens when credit absolutely dries up.

    Not really–it’s worse than that. Even back in 2007 I wasn’t advising people to buy into condos that weren’t golly close to sold out. In fact I recommended avoiding new or newly converted altogether for the most part, especially on larger projects.

    If a condo fails, it’s not pretty for the people who bought. So there’s additional risk, even if you have cash.

    Rate this comment: Thumb up 0

  18. 18
    gameboy says:

    Any word on high-rise condos in Bellevue?

    I actually would LOVE to live in one of those high rises. I only have one child and grew up in East Coast and am used to living in apartments.

    The idea of being able to walk to shops and restaurants (and work) while living in a low-crime neighborhood with a very very good schoold district is very attractive to me.

    The only problem is that between my wife and I we make well over median income and I still can’t afford these condos, especially when they are charging $0.50 per sqft per month for maintenance.

    I am just waiting for these prices to fall another 30% to 50%…

    Rate this comment: Thumb up 0

  19. 19
    EconE says:

    By gameboy @ 18:

    Any word on high-rise condos in Bellevue?

    Lots of units not selling.

    The idea of being able to walk to shops and restaurants (and work) while living in a low-crime neighborhood with a very very good schoold district is very attractive to me.

    Yes, a walking lifestyle is nice. But at $400-$800/sf?

    The only problem is that between my wife and I we make well over median income and I still can’t afford these condos, especially when they are charging $0.50 per sqft per month for maintenance.

    $0.50/sf is just a starting point. They seem to rise from there. It happened already at 2200. If you are interested in “mixed use” HOA will be higher…and more out of your control as a homeowner.

    I am just waiting for these prices to fall another 30% to 50%…

    Patience. Banks sell for 50c on the dollar or less. There will be plenty of condos to choose from in the future.

    Rate this comment: Thumb up 0

  20. 20
    EconE says:

    Tim…you’re not serious about being surprised about half off condos are you?

    You are?

    Well…you’d better sit down for this one.

    More than half off a SFR in Madrona.

    http://www.redfin.com/WA/Seattle/1618-34th-Ave-98122/home/141353

    Rate this comment: Thumb up 0

  21. 21
    tomtom says:

    Florera Greenlake

    Opening Celebration in July 07.

    14/59 sold. The last was on 7/1/08.

    (now for rent.)

    Rate this comment: Thumb up 0

  22. 22
    Kary L. Krismer says:

    One thing occurred to me last week. The developers of new condos and housing projects should have bought flags and banners that wouldn’t fade so fast. Some of them are looking pretty pathetic. I even saw a sign outside one complex that was faded pretty badly.

    Rate this comment: Thumb up 0

  23. 23
    Slumlord says:

    Tim,

    If you would stop publishing such dire information, it would stop coming true.

    Rate this comment: Thumb up 0

  24. 24
    Slumlord says:

    My favorite dead project is the Crossing at North Creek in Snohomish County between Everett and Mill Creek. The Crossing is a new single-family condo project that recorded the lots in November 2007. Only three units have sold, and construction has stopped months ago, leaving several partially built buildings exposed to the elements.

    Rate this comment: Thumb up 0

  25. 25
    AMS says:

    The Tim-

    “Half off. I shouldn’t be surprised, but somehow I still am.”

    You didn’t complete the statement. IMHO, it should read:

    ->That’s half off, and probably still priced too high. I shouldn’t be surprised that the day finally came, but somehow I still am.

    Rate this comment: Thumb up 0

  26. 26
    kfhoz says:

    By Slumlord @ 23:

    Tim,

    If you would stop publishing such dire information, it would stop coming true.

    Yeah, Tim. You have triggered the housing collapse, and thereby the global economic meltdown.

    Rate this comment: Thumb up 0

  27. 27
    db says:

    RE: gameboy @ 18

    Likewise. We sold our house in Feb (giant weight of shoulders) and are camping out in a nice downtown apartment where we can count the number of lights on in Bellevue Towers. The prices are gonna come down, down, down.

    Rate this comment: Thumb up 0

  28. 28
    explorer says:

    As for Condos, even the “location, location” mantra cannot save them now it seems. Especially with the outragous prices they were asking for CONVERSIONS, not originally built as condos, and only cosmetically refurbished.

    Most of the coversions are indeed going back to rentals, at nearly the same rent as the mortage would have been. Are they getting it (literally and figuratively)? My anecdotal observations in the Ballard/Greenwood area is NO.

    It may take another year for those to sit vacant for the rent to come down to reality.

    Rate this comment: Thumb up 0

  29. 29

    […] readers may recall past mentions on these pages of Northshore Townhomes, an 86-unit townhome complex in my north Kenmore […]

    Rate this comment: Thumb up 0

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Please read the rules before posting a comment.