After building apartments over the past 5 years, developers are now shifting towards condo projects, opening up more homeownership options that are less expensive than single-family homes but still not cheap.
The goal is to bring more homeownership opportunities for empty-nesters looking to downsize, millennials, and first-time buyers who are not able to afford single-family homes. Yes this sounds great on paper but bringing in more affordable condos are still expensive (usually exceeding $500,000 for a smaller one bedroom unit) and is more enticing for investors who have the ability to drive up prices.
According to the Seattle Times, only about 2,000 condos have opened up in the Seattle and Bellevue area over the last 10 years. About 6,000 condos are in the pipeline for completion within the next few years. Not only is there talk on building new construction condos in the future, but many developers are looking into switching apartment buildings into condo buildings (condo conversions).
Why the condo comeback you ask? Over the last few years, we have seen a major condo shortage with only 350 condos on the market in all of King County (compared to King County’s average of more than 2,000). As a result, condo prices were increasing tremendously more so than single-family homes. Two major reasons for this:
– The creation of a state law made it easy for condo buyers to sue developers for construction defects
– The rental market was on FIRE so why build condos over apartments?
To read the full Seattle Times article, click here.