Here are my notes from Dean Jones of Realogics talk on market trends.
He started with a slide featuring four buildings – Escala, 1 Hotel, 1521 and Four Season:
- Average price: $1.6 million/unit
- 50% pre-sold
- Completion: Winter 08/09
These are grand estates in the sky and show that there has been pent up demand at the top end of the market. In order to serve this market everyone needed to retool to in order to communicate to the consumers in this demographic (he didn’t get into how/what/why they had to retool.)
Buyer demographics in Seattle
- Baby boomer
- Age: 50-64
- Lock and walk lifestyle
- Reprioritized social life
- Discretionary income
- Condo living is liberating
- Rediscovery of spousal relationship
- Urban professionals
- Age: 25-50
- Want to reduce time in traffic
- Career focused, starved for time
- Access to life attractions
- Attracted by new design
- Adopters of hiving concept
- brand conscious/social positioning
- Age: 65+
- New life chapter
- Single level living
- Amenities and safety
- Attractive to visitors
- Social cultural opportunities
- Close to amenities
- The slide had Cosmo blogs’s 910 Arte photo
- They started late in Seattle
- 2005/2006 – 30% segment
- 2007 – 20 %
- 2008 – 10%
- Developer imposed restrictions
- Attractive for 5-10%
- We learned to preserve home value
Common marketing platforms
- Health and wellness
- Insipriing design
- Time value benefit
- Social connectedness
- Investment quality
Seattle late arrival to residential boom.
Portland, 1/2 of our size delivered twice the units.
Residential construction resources are competing with commercial construction resources.
What are the sizes of the groups?
- 40% empty nestors
- 20% out of state
- 30% move up buyer – urban professional
- 5-10% investor
The Seattle market can absorb 2000-2500 units a year.
Downtown is moving north because of the amount of available land and zoning.
Denny Way is zoned to 400 feet.
Westlake will be like Market street in SF or Yaletown in Vancouver. Yaletown turned around in 8 years.
Ballard is referred to as a “Boom burg”.
First hill getting some towers. Capitol Hill will remain low rise because of zoning restrictions.
Hard to deliver tower units under $400k.
Interbay has brown fields that need cleaning up.
Seattle has very little green space as compared to other cities.
Re-sales at 2200 and Cosmo are not affecting new construction.
Less than 15% of a building trades a year.
Buildings take 24 months to build.
$750/square foot will be common in a few years.
Will we have a repeat of the lawsuits we saw in the ’80’s and ’90’s? No, buyers are getting more savy about requesting info on the developer. Developers are also much more serious about water issues and hire specialists to ensure water integrity.
Lengthening of retail core from 6th and pine to market.
Westlake is growing up.