Friday, February 29, 2008

Sales are slow for new and existing luxury condominiums. Olive 8, the luxury project in downtown Seattle, placed an ad in last weekend’s Seattle times and sent out a mass email to prospective buyers with a special offer designed to boost their own sales in a time of economic pessimism.

In their ad, Olive 8 correctly attributes slow sales to psychological factors. David Thyer, president of Olive 8’s developer RC Hedreen, is loosely quoted in the ad,”…concern about the economy has many people taking a ‘wait and see’ attitude. People are afraid that they may buy a house today and find that it’s been reduced in price later this year”.

Data reported in the Seattle Times indicates that our local real estate market is slowly picking up, but this is less evident in our luxury home market than it is in other segments of our housing market. People buying luxury homes usually have more flexibility in buying or selling a home, so even though our market is turning, luxury home sales will recover more slowly than other types of home sales.

So Olive 8 is offering some price protection to their buyers. If you purchase a home at Olive 8 and prices for other units with the same floor plan are reduced before your purchase closes, then your price will also be reduced. This kind of purchase price protection is good for buyers and for our housing market. Buyers can rest assured that they won’t lose equity before construction is completed, and this peace of mind could encourage more home sales.

Friday, February 08, 2008

Interesting article at today. It’s entitled, Economist: Seattle-area home prices manageable for typical workers. The chief economist for the National Association of Realtors, Lawrence Yun, spoke recently in Bellevue and named Seattle an up-and-coming “Superstar City” where average home prices are not directly dependent on average income for the area.

Many people think that if the average person or family cannot afford an average home, then people will stop buying homes. But despite the recent building frenzy, the population in Seattle continues to outgrow the supply of housing. There are enough people earning above-average incomes that the prices of homes in Seattle will remain stable until we build a lot more affordable housing.

The only way to make housing more affordable in Seattle is to build more of it. Our greater community, our “Superstar City”, needs to continue increasing density in order to maintain economic diversity.

The best way to increase density is to build more LEED-certified mixed-use high-rise towers in the city’s core neighborhoods and allow more density for high-quality LEED-certified townhomes in low-rise residential neighborhoods, and much more public transportation on rails is also necessary, but that’s another post for another day…