Condo prices continue to soar even faster than single-family home costs, which kept up their historic streak last month. Even amid a construction boom, the number of new condos isn’t growing much because most developers are building apartments instead.
Amid all the other housing issues facing the Seattle area, the region is locked into a severe condo drought, depriving both first-time buyers and down-sizers of a cheaper home-ownership option that’s common in other pricey cities.
Going back two decades, King County on average has had more than 2,000 condos on the market for buyers to choose from this time of year. Now? It’s down to about 350, a record low.
And the local construction boom isn’t helping much. There are about 75 major projects being built in the core of Seattle, yet only three of them are condo developments. There are barely any other condos going up elsewhere across the county, either; construction just started on Bellevue’s first condo project in a decade.
That’s not going to change anytime soon. In downtown Seattle, the main market for condos, about 94 percent of the housing units in the pipeline for the rest of the decade involve apartments for rent, not condos for sale, according to Realogics Sotheby’s International Realty.
Most Read Stories
On its face, the condo construction shortage doesn’t make much sense: Condos are in such demand that buyers have camped out a day before time to secure rare new units.
King County condo prices were up 17.1 percent in November from a year prior, as condo prices continue to rise faster than single-family home costs, according to new monthly data released Wednesday by the Northwest Multiple Listing Service.
In Seattle, the typical condo now costs $453,000; just three years ago, it was under $300,000.
But developers and banks that finance construction see condos as the riskiest type of project, both in terms of direct financial payback (during last decade’s bubble burst, many condos plummeted in value and went unsold or were converted to apartments) and in legal terms.
Washington has an uncommon condo law that allows condo owners to more easily sue builders for construction defects, as it allows suits for several years and uses a broad definition of what a “defect” is. That can tie developers up in court and lead to settlement payouts, and at the least, it has caused high insurance costs that can…