Hundreds of people bought new condos over the weekend—even though their units won’t be ready for another couple of years.
Nexus, a condo tower that broke ground at 1200 Howell in the Denny Triangle last week, started public sales on Saturday, and have already sold 75 percent of their 382 units, developer Burrard announced in a release Tuesday. Those presales amount to more than $200 million.
The lowest-cost units sold at below $350,000, but some sold for more than $3 million.
A blog post on the project’s website shows people huddled under umbrellas lined up for a presale event Saturday.
Burrard attributes the high sales to a “robust economy” combined with limited inventory of condos downtown. Although the building’s still two years out, Nexus represents the first new condos opening up downtown after the last new unit in the Insignia sold earlier this month.
Some bought their condos with three years to go. In June, prospective buyers lined up around the block for a presale.
It’s been more than a decade since new condos were met with this much enthusiasm.
The last comparable period was in the mid-2000s housing bubble. 2200 in South Lake Union, similar to Nexus now, had lines around the block, and sold out 92 percent of its units a year in advance. The Cristalla in Belltown and the Cosmopolitan on Virginia had similar success.
“There was less mortgage lending oversight [around 2005] and pretty much anyone could get a loan and worse, everyone thought these towers would run up in value endlessly,” Dean Jones, CEO of Realogics Sotheby’s International Realty, tells us.
Developers scrambled to build new condos in response to the demand—but then the housing bubble burst. By 2009, presale buyers were backing out.
Developers at Fifteen Twenty-One saw more than a quarter of their presales from the mid-2000s drop out, and around 10 percent of Olive 8 presale buyers retained a lawyer in hopes of getting their money back. Many could no longer afford the homes they’d just purchased.
In response, says Jones, “mortgage lenders went the other direction by making it nearly impossible to get a loan.”
The condo market slowed down considerably after that, and residential towers, even as the economy began to recover, sold more slowly. Developers turned toward rental projects—leading to a smaller supply of condos now.
With new rules around mortgages since the great recession, Jones attributes the renewed enthusiasm in condos not to the subprime mortgages of the mid-2000s, but rising rents in Seattle.
“Consumers want to lock in their future housing costs,” said Jones in the release.
- Hot market for high-end condos fuels downtown building boom [Seattle Times]
- Burrard Group and Realogics Sotheby’s International Realty sell more than $200 million in condominiums [Nexus]
- Nexus condo interiors full of high-tech details and small-space solutions [CS]
- Last new Downtown Seattle condo sells for more than $2.6M [CS]