Seattle condo purchasers opt for apartment-style dwellings instead

Seattle condo purchasers opt for apartment-style dwellings instead

Seattle Condo Market Struggles Amid Rising Fees and High Prices

The Seattle metro area's condo market is experiencing a slowdown, with association fees on the rise and median prices remaining high. According to data from NWMLS, the median association fees for the April-June period in 2022 were $565 per month, a nearly 46% increase from $388 for the same months in 2019. This increase, combined with the median price of Seattle condos declining 1.8% year over year to $540,000 in June, has made condo ownership less affordable for many buyers.

One couple, Deborah Bauder and her husband, faced unexpected expenses when they bought a condo in 2014. They had to pay thousands to have the building painted and faced another major bill to repair the elevator. After spending two years searching for a suitable condo, they found one with more square footage outside the city, within their budget of $650,000, and received a $30,000 discount off the asking price.

Olga Dyckman, a Windermere broker and CEO of The Seattle Condo Group, stated that the typical luxury condo buyer is paying more than $1 per square foot in association fees. She also warned that condos carry extra risks for buyers, such as hidden and expensive problems with the building's structure, roof, electrical systems, and plumbing.

Despite their relative affordability compared to other home types, apartment-style condos have not been in great demand in the Seattle area due to high interest rates, spikes in association fees, and sticky high asking prices. This trend is reinforced by Seattle’s demographic preferences and economic conditions, with many buyers preferring single-family homes and townhomes that offer more space, privacy, and family-friendly environments.

However, there are some buyers who are still interested in condos. Dale Knudsen and his husband, Ashton Campbell, recently bought a condo in Seattle's West Edge neighborhood, finding it affordable and in their desired location. Lora Hammersmith, a 56-year-old about to retire from her job as a King County Metro employee, is considering downsizing to a condo due to its relative affordability and her preference for urban living.

Jeff Reynolds, a Compass broker, mentioned that mortgage rates, now hovering just below 7% for a 30-year fixed mortgage, may need to come down nearly a full percentage point to spur more interest in condos. Jeff Sackett, a real estate agent at Seattle-based Re/Max Metro Realty, stated that condos can still be found at around $300,000-$350,000, while town homes start at about $400,000-$450,000.

Buyers should consider hiring an agent who has done numerous condo sales and pay close attention to a building's condition and the association's financial standing. Information about a condo's resale certificate can provide key information about an association's financials and the building. Higher association fees are pushing some condo buyers into the market for single-family homes and nontraditional condo types, like ADUs and town homes.

In summary, the relatively low demand for traditional apartment-style condos in the Seattle area is influenced by several key factors, including high prices and limited affordability, rising inventory and buyer hesitancy, preference for other housing types, costly homeowner association (HOA) fees and government policies, and market dynamics and wealth inequality. These trends are reinforced by Seattle’s demographic preferences and economic conditions across 2024-2025.

1. The surge in homeowner association (HOA) fees for condos in Seattle is causing some buyers to explore other housing options, such as single-family homes and nontraditional condo types like ADUs and townhomes.
2. Despite the high costs and rising fees, there are still some buyers who are attracted to condos due to their affordability compared to other housing options and their desired location.
3. Jeff Reynolds, a Compass broker, believes that mortgage rates may need to decrease significantly to stimulate more interest in the condo market.
4. Real estate expert Lora Hammersmith, who is about to retire from her job, is considering downsizing to a condo because of its relative affordability and preference for urban living.
5. Seattle's condo market is influenced by various factors including high prices, high interest rates, spikes in association fees, and government policies, as well as buyer preferences for single-family homes and townhomes that offer more space and privacy.

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