South Lake Union real estate

[rockybalboa]

Given the massive planned development in South Lake Union, do any of you have opinions on whether or not the new developments in the neighborhood could offset the market?

[Matthew]

offset the market in what way?

[rockybalboa]

There is a lot of planning for revitalization of the neighborhood, being that much of it is currently industrial warehouses and such. Currently, its not well connected to downtown, and with the new streetcar being built, and more businesses and housing filling the gateway district, it seems like in the next 5 years it will be a very nice place to live. I was just wondering, if that neighborhood revitalization could make the home value appreciation offset the negative market trends.

[Erik]

Rockybalboa,

I understand what you're getting at, and I think that the answer ultimately hinges on how far prices in general decline. If there's only a modest correction (maybe a 10% drop or several years of stagnant prices) then the rising value of SLU relative to other neighborhoods might help a SLU condo keep its value or appreciate slightly.

If, on the other hand, property values fall 25% or 30% (and you can certainly find people here who are expecting more than that) then any increase perceived desirability for SLU will probably be more than overwhelmed by overall depreciation.

One other thing worth considering is the characteristics of whatever property you might buy in SLU. These aren't cosmetic fixer bungalows. They are brand new condos with new granite, stainless steel, etc. If there is value to be had in this market (which I very much doubt) I certainly don't think it's in new construction condos. In my opinion, there's an extra risk associated with condos due to overbuilding/overconverting. Also, people actually pay a premium to have granite counters that no-one else has ever prepared food on. And then they prepare food on them....[/i]

[rockybalboa]

Thanks for the reply. Today I had a home selection appointment at the Veer Lofts (a new construction by the Vulcan group), in SLU. I've been eyeing this project for 6 months now (not as an investment, but more just that I would love to live in the neighborhood). Unfortunately, all of the affordable units in the building have already been sold. Its quite amazing actually, the sales team there have been holding their appointments since only Saturday, and from what I could tell, they've sold quite a bit of their units already.

[Matthew]

Rocky,

Prices are going to drop everywhere. A few million Paul Allen granite counter top/stainless steel dollars aren't going to save anyone in SLU.

[synthetik]

but... he's going to be priced out forever!