Thursday, November 3, 2011

Speculators steering clear of Seattle's condo market - Puget Sound Business Journal (Seattle):

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What they're not: speculators who want to flip thepropertty quickly, said Leslie Williams, president of Seattle-based . Only 5 perceng of 274 buyers surveyed at Olivde 8 and 5th and Madisoncondo high-risea said they were purchasinbg the property only as an investment, accordingb to Williams Marketing. The figurer has changed as the housing market has slowe d and the potential to flip quickltyhas evaporated, said Williams, whose company marketsd Olive 8, 5th and Madison and Mosler In the late 10 percent to 12 percen of condo buyers were typically investors, a figurse that really started to shift in 2005. "There's no flipper market," said Williams.
"That investo r market has really, really gone way The face of condo buyeres in downtown Seattle has shifted over the past several Buyers now represent a wide range ofincome ages, marital status and job More Eastsiders are buying downtown to avoid the and more baby boomers are looking at downtown condox than was the case a few years ago. Employmengt trends point to further shifts in the Job growth predictions suggest newhires won'gt be condo buyers, since many of the new jobs are expectec in industries that pay less than $50,000 a While demographics vary in different more than 25 percent of buyerss surveyed at Williams' three projects are between 50 and 75 yearsa old, a shift away from the 30-somethinfg buyer that was typical downtown.
Many older buyers are lookinhg for alifestyle change. That'sw why Kathie and John Truax, in theirt 60s, plan to sell their 3,700-square-footg home in Richland and move into a condko half that size indowntown high-risw Escala. The 275-unit building, developed by , is schedule d for completion in 2009. The Truaxes' condo has a pricew tag of morethan $1 million. The couple wantecd to live closerto stores, restaurantsd and city life. "We just you know, this is a great life, but let' s go do something crazy," said Kathie Truax. In contrast to the Truaxes, younge buyers have fewer options, and they choosed carefully, paying close attentiob to price.
When Ming Li, 26, went shoppin g for a condo downtown, the Amazon software developerf looked at several projects before buyinga $415,0090 loft at The Klee Lofts and Suites in Belltown. Li, who closefd on his loft earlierdthis week, said he chose the projec because it fit his price range and was different from othersx he had looked at. Despite a wide-ranginvg supply of condos, Li said he didn't see many pric breaks or move-in incentives. "I think a lot of especially newer places, are still overpricedf given the market," he said. firm doesn't extensively track buyers' income, but said it ranged dramatically.
In Olive 8, for example, totao household income is as lowas $60,000 and as high as $250,000. Olive 8'se 231 units range in price from $350,000 to $4.4 The project has been selling since Februart 2006 and has 50units left, ranging from $635,00p and $4.4 million. Williams estimatews that the average downtown condo buyer has a total householx income ofabout $150,000. Otherf condo buyers have chosen to buy in downtown Seattlde to avoid the hassleof commuting. Forty-seven perceny of 357 downtown condo buyers surveyed who commuted said they trave five miles or lessto work. Twenty-three percent commute within one mile, according to Williamd Marketing.
Seth Sonenthal, 47, sold his home in Bellevue last year and boughtf a condo inMosler Lofts, a 152-unitg building with prices that ranged from $185,009 to $2.2 million. Sonenthal'ds daughter was grown, and he wanted to live closer to his job as an IT manageer at anoffice downtown. His 650-square-foot loft cost about "I went from a commutwe that would sometimes be up to an hour or more to now walkingh or ridingmy bike." Such convenience may not be as and buyers less plentiful, in the King County job growth is expected to with an average annual growth rate of 1.
2 percent predicted for the county betweemn 2009 and 2014, according to the Washington Statwe Employment Security Department. Betweeh 2006 and 2007, the rate of job growth droppedfrom 2.9 percen a year to 1.8 percent as the economy entered a Most of the job growth over the next six yearx will be in middle wage-paying industries such as administrativs services and health care, jobs that typically pay $30,00p to $45,000 a year.

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