The “starter price” condo market

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Many years ago, I did a study of the “starter price” condo market and received some very surprising results. Based on Dustin’s post, I re-did the research and obtained the exact same results as I did back in Bucks County, PA some 13-16 years ago! Interesting…

The two highest months for people making decisions to buy a condo in what we might call a “starter” price range are March and July. March because first time buyers are often urged by their accountants, or simply by their tax return on their own, to own instead of rent. July due to downsizing of empty nesters or now single, divorced persons selling their single family homes in June and July and moving to a condo. Of course, every month has a mix of reasons to buy, but I find these two reasons account for the fact that these two months tend to be the highest in a yearly cycle.

Sales in June and August are not too far behind and on a quarterly basis, sales are more fairly consistent year round for condos than single family homes, with a slight drop in the last quarter. Again we are not talking about million dollar condos, we are talking about the lowest rung of the price chain.

Actual statistics of 2 bedroom condos under $300,000 (most about $250,000) within a short distance of Sundance in Klahanie.

2005 – Jan. – 10, Feb. – 14, March – Twenty eight – Sold in the 1st quarter – 52

April – 18, May – 19, June – 24 – Sold in the 2nd quarter – 61

July – Thirty, Aug. – 24, Sept. – 13 – Sold in the 3rd quarter – 67

Oct. – 13, Nov. – 9, Dec. – 15 – Sold in the 4th quarter – 37

Inventory in 2006 is way down with only 39 sold in the first quarter compared to 52 in 2005. This does not appear to be because there are fewer buyers, but because fewer people are putting their properties up for sale. However this low inventory in the resale market should not necessarily lead you to believe that demand will be high as supply is low. There is a lot of pressure on the resale markets from New construction and Condo Conversion Projects, generally. Even if the new construction or condo conversion is not in your back yard, people will drive an extra mile or two for brand new.

I have to admit that I almost fell off my chair to find the results almost identical in this scenario, to the study I did some 3,000 miles away back in the early to mid nineties.

Rent back a recently sold home or wait to sell?

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A reader asked me this great question today, and I simply don’t know the answer. Can anyone give him some advice?

As a buyer of new construction, we recently found out that the builder wasn’t going to make our late July completion date. Instead the builder estimated a mid-September completion. Ugh, we have a child who will start school in a new school district, so this will cause a hassle.

Anyways, we were planning on listing this week (with an open house on the weekend hosted by our agent) but because of the delay in construction I’m at a loss of what to do. Here are my thoughts on the numerous statistics and opinion I’ve found so far:

  • Spring, especially during the last weeks of school is generally one of the best times to list a home
  • Listing a home later in summer can increase Days on the Market slightly, but sales price is often unaffected
  • Due to the region having great job growth and numerous relocations, the school calendar, has a lesser effect on home sales than other regions.

BTW, we are selling a condo in the Klahanie – Issaquah area. So, long-winded way of asking… Do I:

  • List in mid-late June and get a high volume of traffic but have a request that we pay rent through mid-September (roughly 45 days+ if the condo sale closed near end of July)?
  • List in mid-late July hoping to close in late August, thereby having to pay rent to stay only an extra two weeks?
  • Do something else?

Marketing my Home on the Internet

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While my opinion that a good real estate blogger does not include their listings on their blog is well documented and much debated, there is always room for an exception… and marketing my OWN home is one of those!

[photopress:kids_at_easter.JPG,thumb,alignright]Essentially, we have about two weeks left before we put it on the market. We’re just waiting for the movers to take our stuff and then, after we refinish the wooden floors on the main floor, we’ll be ready to list!

So, here are the internet marketing items I have on my checklist (of course, we’ll do some off-line stuff like putting together fliers, but I’m more interested in exploring the online stuff!)

  • Add Our Home to the Free Directories. Craigslist and Google Base come to mind. Are there others I should consider?
  • Blog About Our Neighbors. I know that there is very limited things that a real estate agent can say about the family-friendly nature of a neighborhood, but not having a license gives me the freedom to talk in great detail about are wonderful neighbors. Things I’d like to mention are all the kids that live nearby (8 kids within a few houses!), our regular Sunday BBQs during the summer and our weekly game nights during the Winter. (And I’m sure the neighbors would love it if the new owners continued our tradition of hosting the annual neighborhood easter egg hunt!!!). When moving to a new home, one of the biggest mysteries is what are the neighbors going to be like and because the people on our street are so cool, I’d like to put together an extensive neighborhood blog post! (Honestly, the hardest part of accepting a position in LA was leaving the neighborhood!)

    • [photopress:start_easter_hunt.JPG,thumb,alignright]

  • Financing Options. Interestingly, I’m in a place where I could offer the “right” people some innovative financing options… Like a lease-to-own, or something similar (as long as it is a win-win for both parties, I’m game for any idea!). Does something like this normally happen through the usual MLS channels or is there a special market for these types of properties? (Hint: if you contact me before we list, we might even be able to cut out some obvious fees.)
  • Blog About Our House. I promise not to overdo this, but I think one blog post about all the cool features of our home that might be too “personal” for the typical MLS listing would be appropriate on Rain City Guide. I’m thinking of things like the tree house I built in the backyard and the original art deco fixtures… I’d also like to add a map of all the recently sold homes (or maybe I’ll be lazy and just link to the appropriate ShackPrices page!)
  • Unique Icon. Robbie says he’ll give our home a unique icon on the maps of listed properties… Any ideas for what the icon should look like?
  • Enhance listing on Realtor.com. Around Move, people are shocked at how often real estate agents pay to get showcase listings and then don’t spruce up their listings by adding additional photos and other extras. Considering that Anna’s broker already pays for this service, I’ll make sure we spruce up our home!

    • [photopress:eggs.JPG,thumb,alignright]

  • Get on the Redfin Blog. If I provide a direct link from my blog to my listing on Redfin (and beg people to click on the link!) maybe I can blow out their single home stats for a day and thereby get a mention in their blog!!! (hmmm…. Is there a way to get on the Zillowblog?)
  • Newspaper Coverage? Is someone at the Seattle Times, Seattle PI, Seattle Magazine and/or any other local newspaper interested in writing a story about preparing and then selling a 1920’s Crown Hill (N. Ballard) home? We’ve got lots of great photos and I could probably write most of the story for you! 🙂
    (This reminds me… I did an interview for a real estate technology story that was suppose to be in the May issue of the Seattle Magazine. I never saw or heard anything about that story… Did this story ever go live? )
  • Picture Cloud. These guys just sent me a link for a free photo cloud. Interesting technology and easy enough to put together, so I think I’ll try them out with our home. (By the way, their branded option is free, but if you type the code “raincity”, they they will give you credit for five unbranded clouds for a penny.) If you try them out before I post my cloud, let me know what you think!

Any other ideas as I prepare the marketing plan for our home? Has anyone ever had any luck marketing a home on the internet? What did you do?

Seattle Real Estate Calendar Update

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Thanks to Tom of Trumba, I’ve been playing around with Trumba‘s calendar solutions. They are definitely doing some interesting things and there are some benefits to their solution that go above and beyond the current offerings of Google Calendar I discussed a little while back. In particular, I really like two features they’ve added to the NYTime’s Automotive Calendar that I think could easily be ported to the Seattle real estate scene.

  • Feature 1: Submit an Event allows for any user to add an event
  • Feature 2: Add This Calendar to Your Site gives some simple javascript so that anyone can add the calendar to their site.

There are two types of calendars that can easily be added to another site. One is a preview calendar shown on my sidepanel (below the comments!) and the other is a “full” calendar shown below.

I really like the distributed collaboration and if anyone wants to add this calendar to their real estate site, it is as simple as copy-and-pasting some code… If you are interested, email me and I’ll send you the code!

By the way, the current calendars on this site do not have the “add an event” feature, but Tom assures me that it will be available in a few weeks! Until then, feel free to email me with your real estate event if you’d like me to add it to the calendar!

One more thing!!! The TechCrunch event looks to be a lot of fun and is coming up this next Wednesday!!!

Going, Going…GONE!

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[photopress:gavel.jpg,full,alignright]A few days ago a property came on market just after noon at 12:48:39. The property was emailed to me through the mls, so I saw it fairly quickly after it was listed. I emailed it to a client of mine, even though it was not in the area he requested, but it was in the price range.

I don’t know why I sent it to him, except that I knew it was an exceptional property in an exceptional location and priced to sell. There are hundreds of properties on market in his price range, but this one caught my attention. This one above all others. Sometimes I wonder how we can just instinctively know that as we are emailed listings, while we are in the midst of doing other things. Now there’s a REALLY good one.

The property was apparently viewed, an offer received and accepted and the property changed from ACTIVE to STI by 9:58:46 the same evening. No, my client didn’t see it or buy it. But he did change his instructions to me and asked that I, rather than following his instructions, send him anything in his price range that I felt was not only appropriate to his needs, but a good property. Sometimes just knowing “how to pick ’em” is what sets you apart.

I do see some weaknesses in the marketplace. In fact, I don’t like most or many properties that are for sale. But we are, as always, waiting like cats to pounce on the next good one coming out the gate.

Time Travel Transportation Maps

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Not like Back To The Future, but pretty cool nonetheless. These transportation maps from the UK are super-sweet – they show the travel time by bus or rail from a few cities in the UK. I imagine we’ll be able to generate maps like this on the fly to show travel time from wherever you are someday. [photopress:transporttion_maps.jpg,thumb,alignright]

Until then, you can always pick two spots and get the travel time via Bus Monster (Seattle) or Google Transit (Portland). I suspect other cities will get Google Transit service soon- a little bird told me that Google transit is getting data from King County Metro.

(via boingboing.net )

Condos: Conversion versus New Construction

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(Editor’s Note: Please welcome Wendy Leung as the newest contributor to Rain City Guide. She is a real estate professional specializing in the Seattle Condo market. She has been running a very interesting condo blog for a few months now, and I thought we could all benefit from her knowledge on the condo market in Downtown Seattle. if you haven’t read her blog, definitely check out her post on Cars and Condos where she gives insight into the local condos by describing the type of car that they would be. Great stuff! You can always learn more about her at her website or by contacting her directly at 206-321-2493)

With an increasing number of apartment buildings converting into condos as well as a parade of new construction projects being unveiled every day, home buyers may be wondering how to think about these two property types.

At the end of the day, your Realtor should help you evaluate the options based on your goals, budget, needs, and circumstances. Furthermore, every property is unique and generalizing about conversions and new condos is a bit like saying one genre of restaurant will always offer better service than another. That said, there are some fairly consistent differences between the two property types. Here are some of the advantages for each.

Advantages of new condos

  • Newer, nicer interiors and exteriors, often come with better amenities and more imaginative architectural designs.
  • Better quality construction (at least as far as we know). Gone are the days when builders used leaky Synthetic stucco for every new project. The quality of construction has advanced these days and more and more builders are using hardy plank, a combination of brick veneer, vinyl, metal, concrete, steel and cement.
  • Flexibility to customize the interior. Usually, the builder will offer you a variety of upgrades and style options to make the place match your personal style.

Advantages of conversions

  • There are fewer surprises. What you see is what you get. The building has been around for a while so generally, if there are any issues with the building, it should already have happened. If the building has issues, you can usually get hold of the information about any issues much easier than a new condo to make a better informed decision.
  • There is actual market data available for that building and even that unit to support the rental value for the building if you are purchasing it as an investment. There will also be more insight into peoples’ opinions of the building as opposed to speculation from the new condo sales center.
  • Most of the time, conversions are cheaper than buying new construction. When you’re looking at ROI, this can be the biggest factor of all since 3 years from now, a new condo and an apartment conversion will both be older condos in the eyes of most buyers.

If you are not paying a really large premium for new construction (this is getting harder to do these days), it will probably resell for more than a conversion. However, a pricey new construction unit may have a higher absolute price appreciation but may not have a higher return on investment (than a value-priced conversion unit). At the end of the day from an investment point of view, it’s the rate of return on investment and not the absolute resale price growth that maximizes your profits.