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June 2021

Condo comeback fueling FOMO

June 7, 2021

Condos are making a comeback, declared Dean Jones, head of a Seattle-based real estate consultancy and brokerage that specializes in market research, product development, marketing and sales.

In a recent blog for Realogics Sotheby's International Realty (RSIR) where he is CEO and owner, Jones described the current market in the Seattle metro area as "a perfect storm for savvy homebuyers that know how to spot the opportunity," adding, "The fundamentals are creating FOMO (fear of missing out)."

With more than 100,000 tech workers being encouraged back to work by some of the industry's major players, Jones said that call-back decision is "having a noted effect on the housing demand of in-city apartments and condominiums." Residents that may have fled high-density markets during the COVID pandemic are returning, according to Jones. "Basically, all the trendlines that were pessimistic a year ago have reversed course and that's shoring up consumer confidence," he remarked.

Data from Northwest Multiple Listing Service confirm the uptick.

Through May, year-to-date pending sales of condominiums county-wide are up more than 62%. In MLS area 710 encompassing the downtown-Belltown area, pending sales have jumped more than 57%.

Research by RSIR shows the resurgence includes Californians as the top inbound buyer demographic "lured by the Evergreen State's more favorable tax structure and economic opportunities."

Jones acknowledges "it may take more than a year to see the urban ecosystem looking like they were before the pandemic and following other political headwinds," but believes waiting "will more likely mean less supply, more buyer competition, and both prices and interest rates on the rise."

RSIR's research reveals 15 condo buildings either recently built or under construction within Seattle's city limits. Combined, these projects will add 2,256 units scheduled for occupancy between 2018 - 2023. About half the units in this pipeline is either sold and closed, or under contract.

Jones said growing demand is not limited to Seattle as "boom-burbs are also seeing impressive sales momentum." He noted projects in Kirkland and West Seattle as examples. NWMLS figures for May show pending sales of condos surged more than 78% in southwest King County compared to the same month a year ago, and nearly 62% on the Eastside.