The distressed category of the Seattle Condo market continues to expand. I know I risk boring you guys with so many examples of distressed units, but I feel that it is important for you to see. The “market value” for condos downtown is constantly facing pressure from the short sales and foreclosures that make up a large portion of our inventory. This condo that you see above is located at Lumen (5th and Mercer).  In 2007 it sold for $449,900.  Now, just 4 years later its priced at $188,987.  I should know what the final sale price is by this afternoon/evening.  The Takeaway……..Lower prices mean more investors/sales and decreasing inventory.  At the same time it adds pressure to pricing for those trying to sell traditionally.

****Other condos offered at the foreclosure auction today included, Betsy Ross (Capitol Hill), Queen Anne High School (Upper Queen Anne) and 2200 Westlake (South Lake Union-Postponed).

[picture courtesy of M Schmaltz]

Yep, you read that correctly. We initially highlighted this unit last week in our Black Friday post. Unit #316 last sold in November of 2007 for $341,241.   Now, just 4 years later it sold for $131,161; which was “$1″ over the minimum bid set by the bank. Some may argue that with the recent developments and the buildings history that this was a risky purchase, but I tend to think about the upside years down the road. Ultimately, the construction defects will be remedied. For this unit, I thought $131,161 was a great price. Not to mention, that if you are looking to purchase a condo in the Downtown Seattle or Queen Anne neighborhoods, there are only 22 listings on the market under $140,000. Only 5 of those units have a square footage of 700sf or more.

Building: 500 Elliott Condos
Neighborhood: Queen Anne

DESCRIPTION

500 Elliott Condos is located at the Southwest edge of Queen Anne. Known best for its convenient location, 500 Elliott also features, secure parking, a fitness center, lobby entrance, security and intercom access.  Many of the units offer spacious balcony’s that feature great views of the Puget Sound.  Within walking distance of Kinnear Park, The Olympic Sculpture Park and Belltown, 500 Elliott is positioned to be a popular Seattle building for years to come.

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If you had been following Seattle condo news last week, you probably noticed that the owners at Queen Anne High School received a favorable ruling in King County Superior Court.  The court awarded the Queen Anne High School Association 9.4 million dollars.  The lawsuit alleged that major construction defects were present at the historic building. Those defects include unprotected drywall and wood framing, substandard windows and drains, insufficient weatherproofing, joints/flashing and water damage.  Some owners reported failed drywall, water stains, dry-rot in floors and framing, failed mortar and flaky bricks and terra cotta.

The important lesson in this story is how these issues can inhibit owners from buying, selling and re-financing.  It is a well known fact that lenders are “nervous” about underwriting loans on condos in general.  When you add lawsuits and pending assessments, almost everyone in the lending world will refuse to give money to even the most qualified of buyers. With that said there were a few sales during the period of litigation.

During the last 12 moths:

• There were a total of 5 sales
• 3 of those sales were bank owned and financed by Fannie Mae/Freddie Mac (Homesteps)
• There were 5 cancellations (condos that were listed and cancelled)
• At this moment, there is just one unit for sale in the building.  Unit #101, asking price of $385,000.

The future of building is a bit unstable. I anticipate that the developer will continue to pursue a settlement from their insurer.  As an owner in the building, I would stay put if you can.  As a buyer, I would watch the situation closely. Once the dust settles and the repairs have been made, then I think you can consider this building an option. For those optimistic about the buildings future, there are 2 units scheduled to be sold at foreclosure auction on Monday the 28th. Foreclosure buying is an opportunity to benefit from a deep discount.  So if your strategy is buy and “hold”, then a foreclosure purchase may be a good option. Especially given the limited inventory.

It has been an active week for Seattle condo foreclosures.  Take a look at this one.  You’ll probably recognize the building.  The unit going to auction is 561sf on the 4th floor (413). In August of 2006 this unit sold for $226,900. Today its auction price is $75,509. This is a 67% reduction in price from the last market sale.  For the investors out there, prices like these create opportunities to purchase, rent and enjoy a couple hundred dollars a month in passive income.  We haven’t talked much about cash flow in years.  Happy condo hunting this weekend.

Project: Lumen Condos
Neighborhood:  Queen Anne

DESCRIPTION

LUMEN is project of 94 contemporary condos located in lower Queen Anne. Lumen was completed in 2007 and brought a different interior element then most Seattle condo projects.  The finishes include sealed concrete flooring, high ceilings, stylish lighting, stainless appliances, quartz counters, Nana wall systems, expansive windows, exposed concrete ceilings, large patios and luminescent exterior walls.  The exterior is concrete, steel and glass construction.  The amenities include concierge service, owners lounge, private screening room, guest suite, business center, indoor lounge, landscaped courtyard, and secured access and parking.  Lumen’s lower Queen Anne location allows great access to Downtown, Belltown and South Lake Union.

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LUMEN INFO | UCS PROJECT GRADE

There are three active foreclosures that I’m watching this week heading into Fridays auction.  For the 3rd weekend in a row, there is a Washington Square unit. A condo at Lumen on the 3rd floor and an incredible unit at Market Place North in the Pike Place district in Downtown Seattle.

1. Washington Square (1 bed, 1 bath 967sf)

2. Lumen (1 bed, 1 bath, 775sf)

3. Market Place North (3 bedroom, 2 bath 1,682sf)

SOURCE: Realogics, Inc.

Do you remember just 2-3 years ago when the Seattle skyline was full of  high-rise construction cranes? That’s not the case anymore.  When it comes to condos, we might not see another project built for 4-5 years.  What does that mean for new construction condo inventory?  Statistically it can be proven that inventory is in decline; here is why:

Let’s examine what the downtown Seattle condo market really looks like. Attached is the graphic provided to UCS (courtesy of Realogics Market Research). Realogics maintains detailed information on the sales of each condominium building.  As you will see in the illustration below, the inventory of newly constructed condominiums is decreasing dramatically.

Clearly the biggest impact on inventory has been the transition of 4 major condo projects to apartments.  These include:

• Expo 62 (114 units in 2008)
• MODA (251 units in 2008)
• Equinox (204 units in 2009)
• Rollin Street (208 units in 2009)
  ****A total of 777 units

The wild card is Volta (formerly known as Alex).  The construction has stopped and at best this could come this year either as condos or as apartments.  For now it has be cited as condos because that’s how it was last presented.  What’s amazing about this situation is that even if it came to market today, we would still have less than 450 new condos to choose from.  From the looks of it, it doesn’t appear that they are doing much with it right now.

In terms of availability by building, from the most to the least, it stacks up like this:

1. Escala
2. Olive 8
3. Gallery
4. Fifteen Twenty-One Second Avenue
5. Enso
6. Volta
7. Four Seasons Private Residences
8. 5th & Madison

Interestingly, two-thirds of the available new condos are in Escala (now 30% sold) and Olive 8 (now 50% sold).  Realogics identifies a unit as being sold as a non-refundable earnest money deposit (pending) or closed.

It is important to note that the title reports are notoriously late with real time information and often show fewer homes sold than actual.

So where does this leave us?  The question becomes, is 450 units or less enough inventory for future demand?  I think not.  As the economy improves, many of those units will be purchased.  I’m sure that eventually Rollin Street and others may come back on the market, but for now, as inventory continues to decline, Seattle may be looking at its next wave of new construction starts in 2012/2013.

It is important to understand that as prices continue to fall, many potential buyers have been renting.  Eventually the increase in rent will drive more consumption of Seattle condominium sales. In addition, what is most fascinating to me is the enormity of going through the construction process. From start to finish it can take up to 5 years.  I will be on the lookout for the first project to break ground.  Until then, as consumers we have about 8 projects to choose from.

Take a look at this unit.  It’s not new to the market, but it just recently had a price reduction ($299,000).  I’ve been in this building before, but I have not seen a unit as nice as this one.  It was designed by Erich Remash.  Check out his website.  Pretty cool portfolio.

Another quick note on 200 West Highland.  I’ve included the invitation for the brokers/public open next Tuesday.  See below for some additional pictures of the project as well.  I would not expect to see pricing for all 17 units.  They will be unveiling 5 units and will probably make adjustments to the remaining units based on the initial demand and feedback.

Get in touch if you have any questions.

200 West Highland is back on the market.  See the press release below.  This is months after the project was to be foreclosed upon in August (Foreclosure Update at 200 West Highland)

The offering will consist of:

• 2 and 3 bedroom homes
• price at $700,000-$1,700,000

According to the MLS, the last sale was recorded on June 25th for 1,775,000.  It was a 2,398sf (2) bedroom at $740psf. There should be 17 units remaining.

Highly Anticipated 200 West Highland Relaunch Event Hosted by HGTV & Apprentice Star Kendra Todd this Tuesday, November 16th

FOR IMMEDIATE RELEASE

HGTV Star & Donald Trump’s Apprentice Winner, Kendra Todd, Hosts the Highly Anticipated Relaunch Event of 200 West Highland this Tuesday, November 16th

A special Brokers Event will be held on Tuesday at 3pm before the public Buyers Event at 5pm.

Seattle, November 11th 2010 – Join Kendra Todd, Donald Trump’s Apprentice Winner and HGTV Star, in celebrating the official rerelease of the residences at 200 West Highland in Seattle, WA.

Known for their extreme luxury, coveted location and unparalleled views, the homes at 200 West Highland are the focus of this special evening event dedicated to previewing Seattle’s most luxurious condominium project.

The first group of units back on the market will be unveiled at 200 W Highland’ s rerelease event on November 16th at 5pm. A special Brokers Event will be held on Tuesday at 3pm before the Public Event at 5pm. Private showings are available.

Perched high on the south slope of Queen Anne, this 25-home condominium development is a new landmark for Seattle, and a compelling alternative to high-rise downtown living.

“This is truly a one-of-a-kind development,” says Kendra Todd. ”It’s a rare opportunity for buyers to purchase new construction homes on historic Highland Drive with this level of quality and views.”

Situated across from historic Kerry Park, these spacious condominiums offer views of downtown, Elliott Bay, the Space Needle and Mount Rainier. The timeless architecture is designed with classic materials to complement the upscale neighborhood. Units are characterized by high-quality finishes, from marble and granite countertops to custom hardwood flooring.

Available in 2- and 3-bedroom units, floor plans range from 1,500 to 2,800 square feet. Prices will range from $700,000 to more than $1.7 Million.

Home sales are facilitated by The Kendra Todd Group at Keller Williams Greater Seattle, and led by Kendra Todd and Stacey Brower.

For more information, visit www.200westhighland.com <http://www.200westhighland.com>

This week in the King County Foreclosure list, there are units at Queen Anne High School and Elektra scheduled to go to auction.  See below for details on each:

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WEEKLY SEATTLE CONDO FORECLOSURE LIST

A green home may be classified by LEED, Built Green, Energy Star or another 3rd Party classification.

I thought I would highlight a few environmentally certified new construction projects and those still seeking some form of green building classification:

Trace North/Trace Lofts – Capitol Hill

Brix – Capitol Hill

Rollin Street – South Lake Union

Enso– South Lake Union

Veer Lofts – South Lake Union

Parc – Belltown

Mosler Lofts – Belltown

Cosmopolitan – Downtown Seattle

Olive 8 – Downtown Seattle

1521 – Downtown Seattle

5th & Madison – Downtown Seattle

220 West Highland – Queen Anne

Hjarta – Ballard

Florera – Greenlake

Bellevue Towers – Downtown Bellevue

We just received an e-mail from Lorig Associates in regards to the status of 200 West Highland.  Many of you have read about their recent foreclosure notice.  As you will see below, the e-mail blast seems to want to assure pontential buyers and current owners that the project is stable and has potential to “weather the storm”.   Per the e-mail, Bank of America will take title of the remaining “unsold” inventory on August 6th.

Over the last 38 years, Lorig Associates has had a strong presence in the Seattle real estate community, building market rate housing, renovating historic structures, and consulting with nonprofits and universities on their housing and service facility needs. We are proud of our work, and of the condominiums we have developed – Market Place North, Market Court, The Willis, The Victoria and, most recently, 200 West Highland. In many respects, 200 West Highland is the culmination of all of our knowledge and resulted in the best building, in the best location – brought on line, unfortunately, at the worst possible time. As you may know, on May 5, 2010, Bank of America served us with a foreclosure notice on the remaining unsold homes at 200 West Highland.  Rumors abound.  Here are the facts, as we know them.

• The building is complete.
• Since the first of this year, we have closed 7 condominium homes, all owner occupied, and will be closing our 8th on June 25.  We are 32% sold.
• Bank of America intends to take title to the unsold units on August 6.
• We have been told by Bank of America that they will NOT be auctioning units, but rather will continue to sell them one by one.
• We also have been told by Bank of America that they will be holding the current pricing.  There will be no major price reductions.
• We have been instructed to continue our sales activity.

We believe that this remarkable building will survive the current turmoil and will, over time, be a smart investment and an exceptionally desirable place to live.  We are encouraged that our existing homeowners share this sentiment. If you would like more information about 200 West Highland or would like to schedule a showing, please contact our marketing agents for an appointment. Sincerely, Bruce Lorig

A few quick facts about 200 West Highland:

• 25 condominium homes
• 1,500 to just over 2,800 square feet
• Located across from Kerry Park

Developer:  Lorig Associates
Website:       200 West Highland

For anyone considering the Cosmopolitan in Seattle, they must re-visit its past.  As most of you know the Cosmo had an epic rise and fall all within 2 years. Read the italiasized text from a previous post of mine as a reminder and then follow along below to participate in a discussion about where the Cosmopolitan Condos stand today:                                  View Pictures Here

Everything about the Cosmopolitan would seem to fit Seattle perfectly.  However, the construction of a commercial project just west of the building has put a damper on the once perfect luxurious tower.  A very controversial topic for well over a year amongst owners, the city planning office and the private sector led to a period of silence as Schnitzer Northwest proceeded with their development of a 36 story commercial tower (1918 eighth).  Not only did it disrupt remarkable west facing views for the highly sought after wing of the building, but it has cast a pricing spell on the rest of the units for sale.  Many owners trying to sell their units at the Cosmo, dealt withan incredible amount of uncertainty in pricing and had to fight the aftermath of their project sticking out like a sore thumb.

If any of you were to consider the Cosmopolitan as your next home, it would be foolish not to consider the damage that has been done. However, it has much to offer when considering the location, amenity package and the allure of high rise luxury living.  Without much construction over the next few years, I anticipate that demand will increase once again for this special building.

Obviously the project has had its fair share of bad press. It also has experienced quickly declining values and a social stigma amongst Seattle buyers; but how do we all feel about the project now?  The Cosmo could benefit from little to no new Seattle activity.  It shouldn’t surprise anyone if we don’t see a new project completed in the next 3 years. Does that actually benefit a buyer at the Cosmo?  Does a seller now in the “04″ stack (NE facing) have a new appreciation for the future of their unit?  Once Enso and Olive 8 sell out, the Cosmo will remain a 34 story luxury tower within close proximity of a growing South Lake Union neighborhood.  It begs the question:

Would you purchase now at the Cosmo?  If so, why?  If not; is it a matter of time or do you feel that the project is forever plagued due to its new 36 story neighbor?   I’m anxious to hear your thoughts!

View More Photos Here

[mappress]