Condo price drops: "It won't happen."
This gem from a July 2007 (the peak month for Seattle's housing market) column by our fondly-missed Elizabeth Rhodes strikes me as particularly amusing:
Will condo prices fall?
Will condo prices fall?
Elizabeth Rhodes wrote:Q: A friend has this theory that the cost of new $500,000 to $700,000 condominiums will drop significantly in the next two years because it's mostly investors who are purchasing the standard $300,000 to $500,000 units in these new projects, and no one is buying the more-expensive units. So once the mid-priced units are sold, the developers will be in a rush to sell the rest and they'll cut prices. What are your thoughts on this?
A: Real-estate economist Matthew Gardner follows the Seattle condominium market closely, and he's confident that new condo prices will not drop. In fact he says, "It won't happen."
"Point one: in today's market $500,000 to $700,000 is cheap. The market has exceeded that number," says Gardner, a principal in Gardner Johnson, a Seattle land-use economics firm. That's particularly true in downtown Seattle where new million-dollar condos abound and in the more-affluent Eastside communities. Propelling sales in that price range are dual-income career couples (some of whom purchased in Belltown a few years ago for $250,000 and now have the wherewithal to trade up to $600,000). Equity-rich baby-boomer homeowners looking to downsize are an even larger buyer group.
Point two: "Right now the situation is that most projects are sold out before they're even built," Gardner says. So there isn't a glut of $500,000 to $700,000 condos.
Point three: The Seattle area is growing, wages are going up so buying power is increasing, and "we haven't seen a ridiculously large amount of supply," notes Gardner.
He estimates 1,200 new condos will be added to downtown Seattle's inventory this year. Compare that to Miami where developers are cutting prices because sales are scarce and there are 8,500 downtown condos for sale.
Comments
http://seattletimes.nwsource.com/html/b ... ake18.html
From the October 2007 post Realistic or In Denial? You be the judge. Whoops. Guess that didn't turn out quite like he expected.
I'd say he belongs in the Hall of Shame with the likes of Greg Swann.
Most of all he's a Broker who attracts other Brokers to his nationally recognized site. The whole thing is the biggest mess of disinformation on the web today.
Oh yea, about condos. I counted eleven cranes in down town Seattle this week before I stopped counting. There is so much more dirt to be developed that it's inconceivable we will ever run low on housing units in Seattle.
The outlying areas that should be dropping prices fast. When new housing units, condos, go on the block there will be a serious impact on pricing. If in city prices go down that hour commute will seem harder to take.
http://www.stroupecondoblog.com/categor ... -area-701/
He has closings taken from a title company, not NWMLS - so captures the direct sales.
That was my FAVORITE quote in that Greenlake article! The next paragraph was pretty good too:
I had a question come up in class last week and I didn't know the answer. What do you think?
Q: When an entire condo complex is sold to one person or entity, does that count (in the statistics) as one sale or do all the units get counted individually?
The sale referenced was taking place prior to foreclosure.
~~ Bertrand Russell ~~ (1872 - 1970)
I must say back in 2007 there was ZERO doubt HERE as to the outcome would be....and so it is.