We just wrapped up the slides for the Downtown Seattle condo data from August. The number of sales were down to 137 from 149 sold in July (roughly 8 percent). The average cost per square foot came in at $710psf – driven by strong sales numbers at Insignia Towers. In fact, Insignia accounted for 79% of the units sold in August.
You may have seen this article in the Seattle Times from earlier in the month – it speaks to the rising Seattle condo prices but also explores the issues developers are facing in building new product. This is a topic we have long discussed on the blog. The four biggest factors deterring developers from building new condos are the following:
1. More exposure to legal action pursuant to construction defects
2. The institutional demand for apartment investing has not wavered. Build apartments, market them, set sales records. Repeat.
3. Cost of development (construction costs) and limited access to contractors/subs
4. Limited access to financing