This is one of many luxury condos for sale in downtown Seattle as available at 1521 2nd Ave, Seattle, WA 98101.
4570 W. Cramer St., Seattle Versus Other Magnolia Waterfront Homes
The waterfront home for sale in Magnolia at 4570 W. Cramer St. is priced correctly and offers potential for long term gains. Looking first at stats for Magnolia, the number of waterfront homes for sale is very small. Only reaching as high as 5 homes for sale during the last year, the home at 4570 W. Cramer is unique and exclusive. Resting on the Puget Sound waterfront, this home also has a mountain view.
The one downside to this home is that it was built in 1925, so it’s older construction. This is minimized to the extent that neighboring luxury homes are just as old, if not older. This home was first listed for sale in November of 2011 for $2.495 million and has since dropped to its current price. We can probably not expect the home at 4570 W. Cramer St. to fall further in price when you look at comparable properties in the area.
Comparable Million Dollar Homes on W. Cramer St. Seattle
4568 W Cramer St. Seattle, WA 98199
4560 W Cramer St Seattle, WA 98199
Sitting two houses over, the home at 4560 W. Cramer St. is not valued as high as other comparable homes. With only 3,045 square feet, 3 bedrooms, and 2 1/2 baths, this luxury home doesn’t offer the same size that the home at 4570 W. Cramer St. offers. This is also a waterfront home on W Cramer St. but there is vegetation that blocks the waterfront view. This makes this home a little less desirable and valued at around $1.8 million.
4594 W Cramer St Seattle, WA 98199
This luxurious home sits next to 4570 W. Cramer St, to the west, and has 4 bedrooms and 3 1/2 baths. This waterfront home has a little more to offer than 4570 W. Cramer St. and is valued at approximately $2.8 million. This home has a few more features to include a swimming pool and a tennis court. It’s a little older as it was built in 1910 and it sold in 2000 for $2.2 million.
Why 4570 W CRAMER ST, SEATTLE Would Make a Good Investment
4570 W. Cramer St. is only valued at $2.195 while high-end homes around the waterfront property are valued much higher. The home offers similar square feet but doesn’t have comparable amenities or an entrance to the water. Buying this home at this price point and then adding $150,000 worth of features could raise it to a comparable level of neighboring homes in the $2.7 million range.
Nadja Brant from Bloomberg.com recently wrote an article outlining the rebound of the LA luxury real estate market. The majority of the evidence for LA’s high-end rebound was a million dollar home which sold for above the asking price and then several quotes local real estate brokers.
First, we need to identify some potential misnomers that readers have about luxury valuation and how that will effect the number of potential buyers. Second, let’s look at Seattle luxury real estate trends and how these misnomers are playing out in Seattle.
Does Bidding Indicate A Market Trend?
Bloomberg.com highlighted a million dollar home that sold for above asking price. Here are the specific details:
A week after Christine Lynch listed her house in the Brentwood neighborhood of Los Angeles for $3.625 million, she had seven offers. Within 10 days, a deal was reached for the five-bedroom, six-bathroom home — and for $225,000 more than she asked.
Based on this turnout for buyers, Nadja went on to say that “Bidding wars are breaking out for luxury homes in such wealthy Los Angeles …as an increasing number of buyers bet on rising home prices and investors return to the market.”
One thing we have to keep in mind is that many high-end sellers will purposely list their home below its true market value. So, this home listed for $3.625 could have been valued at $3.9. Thus, the bidding war would have simply been investors fighting over a bargain home.
With this selling methodology in mind, you’ll be happy to know that some of the statistics do support an upward trend for luxury real estate nationwide. According to the Chicago-based National Association of Realtors, nationwide sales of residential-property listed $1 million and higher rose 7.2 percent in March.
However, this upward trend may not be indicative of the bidding war Bloomberg is describing. In fact, some areas are seeing different economies of scale and responding differently. The VISUM Real Estate Group outlined how some sellers of luxury real estate in New York were utilizing auctions as a method to create excitement about a million dollar home.
Seattle Luxury Real Estate Heading in the Same Direction?
While the market for luxury real estate in Seattle appears to be trending up, it’s no where close to a bidding war. Million dollar homes for sale in Seattle above the $5 million threshold have struggled while the $1-$5 sweet spot has done well.
Reference the graph below for homes for sale in Seattle above $1 million.
The sales price for luxury homes in Seattle is consistently below 90% of the asking price. This will of course vary by neighborhood and price point. Traditional luxury areas in Seattle and Bellevue have continued to perform well: Queen Anne, Medina, and Clyde Hill to name a few.
I love downtown Seattle and wanted to quickly capture some of the best luxury Seattle condos currently on the market. Let’s start with a little background. There are two condo buildings which should automatically pop out at you: Escala and Olive 8. However, there are a few high-end condominiums that are not as well known: Four Seasons Hotel and 1521 2ND AVE.
Million Dollar Condo Units with Great Views
Four Seasons at 99 Union St.
I’m going to start with my favorite condo, suite 1103 at the Four Seasons, 99 UNION ST SEATTLE, WA 98101. This condo sits on the North west corner of the Four Seasons in Seattle with a great view of the Puget Sound. I also like that you get to enjoy the amenities at the Four Seasons hotel. I would say that this suite is a hard sell at the Four Seasons. Not because it’s not a great unit and very appealing, but simply on the price point alone. This Seattle condo is currently listed at just under $3.7 million. It’s difficult to find the right buyer for this condo in downtown Seattle.
I love this shot of the living room with a view out at the Puget Sound.
Beautiful kitchen with an open look out to the living room and water.
The floor plan is well organized in order to provide that open feeling while compartmentalizing the living room to its own area.
This amazing shot of the pool makes me a believer in this condo.
Olive 8 at 737 OLIVE WY, SEATTLE, WA 98101
Olive 8 has been selling like hotcakes and their marketing campaign has been very strong. According to Olive 8, the condo is over 75% sold. The buyers who jumped in when Olive 8 went into auction got a great deal. The condos sit on top of the Hyatt and enjoy all the same amenities, similar to the Four Seasons. My only concern with the Olive 8 condos is when the seller opened themselves up to investors. Condo owners should be careful in preserving the integrity of the building as saturating it with renters could transform it into a pseudo apartment building.
I love this HDR shot of this Olive 8 condo.
One thing I did not like about all the units at Olive 8 were the pillars which blocked some of the views. The pillar in this unit is well placed and did not block the amazing view.
Escala condos at 1920 4TH AVE SEATTLE, WA 98101
I’m a personal fan of Escala condos and this suite in Escala is absolutely amazing. This is an F plan and one of a few that are remaining in Escala. In its inception, Escala prices were much higher than we see today. Fortunately for many buyers, Escala condos had to reduce prices in line with market values. We’ve seen a steady stream of buyers from that point on. The big question weighing on my mind is what they’re going to do with their commercial space. The entire restaurant area, previously allocated as a restaurant strictly for the owners, is now used only for personal parties. If the owners do open this restaurant to outsiders and bring in a 5 star restaurant, I think it could flourish. Here’s a couple of shots of this F plan suite in Escala.
This final pictures is actually a floor pic of the spa by the gym.
Penthouse at 1521 2ND AVE SEATTLE, WA 98101
This penthouse at 1521 2nd Ave Seattle is without parallel. That’s probably why it’s the second most expensive condo on our list at $2.75 million. The floor plan superb with an excellent view out to the water and the city. My only confusion is the decision to use a zebra print carpet for staging. I’m not sure if we’re going with the Tony Montana mafia look but I would have picked something different. Otherwise, this condo in 1521 2nd Ave. is unbelievable.
Spring and summer are some of the hottest real estate seasons for Seattle. This is customarily when sellers, foregoing the colder months, list their home for sale and make the heavy marketing push. Unusually, this year has been much different. The number of homes for sale in April slid 38% from a year ago. Sanjay Bhatt from the Seattle Times wrote an excellent article laying out this trend for Seattle inventory and the simultaneous upturn in home prices.
Sellers in Seattle in Cooperation to Stay Out of the Market?
While I am joking in that sellers in Seattle are cooperating to not sell their homes, the lack of inventory is arguably driving up prices. According to the NWMLS, King Country home prices in April rose above December 2010 prices. Interestingly, the low inventory of homes on the market hasn’t seemed to deter demand. In fact, this lack of Seattle inventory may have contributed to the 15 percent increase in April when compared to the previous year.
Sanjay when on to argue that “rock-bottom mortgage rates and improving employment have set the stage for a stronger spring home buying season than a year ago.” My only issue with this is that many of the factors have not changed. Mortgage rates continue to remain low but that didn’t seem to drive demand over the last few years. Improving employment does make more sense as bring more buyers to the table but that’s not ultimately improving the number of buyers willing to pull the trigger.
The Value of The One That Got Away
I would argue that the lack of inventory, especially in certain sectors of the market, has created a greater feeling of potential loss in buyers. In turn, buyers have started to feel the pressure of not acting and losing that great home. I’d suggest that sellers in Seattle, unknowingly, are creating this demand. Many sellers are sitting out of the market and reducing the amount of quality inventory. With discussion of declining inventory, the discussion always moves back toward the doom and gloom of REO shadow inventory. The Seattle foreclosures banks are holding on their books and not wanting to flood the housing market. According to Sanjay from the Seattle Times,
Bank-owned homes represented less than 16 percent of sales of King County house sales in April, compared with 20 percent a year ago.
So banks are doing their part as well when it comes to acting responsibly as sellers. This is reinforced with Sanjay’s further comments that “there’s still a large “shadow” inventory of homes in foreclosure and repossessed by banks that have yet to come on the market.”
Unfortunately, there’s always an issue with positive market conditions such as this one. In this case, some sellers will prematurely jump back into the market as their mouths continue to water with increasing home prices. As a seller, it’s only natural to feel a sense of urgency in recovering much of the loss value in your home. Banks will do the same thing. The Seattle Times quoted Glenn Crellin in highlighting this result:
“…tight inventory of homes available for sale coupled with the stabilizing prices are probably going to convince some sellers that it’s now safe to come back into the marketplace.”
What Will Rents Do?
Rental prices in Seattle have also played a large role in enabling a partial upturn. The Seattle Times pointed out how recent “U.S. Census data showed only 4.6 percent of all homes and apartments for rent in the Seattle metro area were vacant in the first three months of the year — the lowest level in more than three years.” It’s no surprise that these elevated rental rates would drive many to buy. Many of these newly decided buyers, though, probably didn’t expect the time of climate they would be stepping into this summer. These are buyers who have consistently waited over the last few years with the expectation that prices would continue to fall and time was not an issue. Now, it may appear that time is on the side of sellers. It’s far more cost advantageous for these renters to step into the market but faced with a lower amount of inventory. If rents continue to rise or stay consistent, many buyers will be forced into a less than ideal buying situation.
What is Next For Sellers?
We could be witnessing only a short term upturn in values. Expect sellers behavior to naturally shift as Seattle real estate agents advise their clients to jump into the market just before the turn. Banks will dump more property into the market and smarts sellers will continue to wait.
19 Prospect St. Seattle, WA 98109 is a tough home for a potential buyer as it requires a bit of vision and expertise. For a Seattle real estate investor, there may be room to make a profit with some strong negotiation.
Issue with 19 Prospect St.
It’s not hard to identify the issue with the million dollar home at 19 Prospect St. – pure aesthetics. The property has a great view of the Olympics, the Space Needle, and across Queen Anne. The home, however, is less appealing. The seller’s agent has also elected not to show inner shots of the home. The implication for a buyer here, is that you’ll need to either remodel or rebuild on this property.
Potential Value of a New Home
The question the becomes, what would be the value of a beautiful home built on the property at 19 Prospect? To get a quick snapshot, let’s look at two comparable luxury homes for sale in Queen Anne that also have great views:
1. 162 Highland Dr. Seattle, WA 98109 Listed for Sale at $1,999,000
You can find the MLS information for this home at 162 Highland Dr. Seattle, WA 98109
We also have a review of this home at 162 Highland Dr. Seattle, WA.
The home at 162 Highland is just a few blocks down from 19 Prospect St. and only varies in price from 19 Prospect by $100,000. However, the home at 162 Highland is a beautifully built home, a great view over Queen Anne, and has some nice features. This undermines the current price of 19 Prospect St. and argues that the difference in cost between these two homes should be comparable to the cost of building a similar home to the one built on 162 Highland.
2. 16 Comstock St. Seattle, WA 98109 Listed for Sale at $2,868,000
Here you can see the MLS listing of 16 Comstock St. Seattle, WA 98109.
You can also see our review of 16 Comstock St. Seattle, WA.
The home for sale at 16 Comstock has an excellent view over Queen Anne and the Olympics and has a far superior home. When comparing the two views between 16 Comstock and 19 Prospect, it’s arguable that 16 Comstock’s view is worth anywhere between $500,000 to $750,000 more. As a result, how much would it cost to build a similar home to the one seen at 16 Comstock. The difference would be much more than the current price of the home at 19 Prospect St.
As an investor, or even an informed home buyer, you’ll want to sit down with a real estate agent and a contractor to determine the cost of a new home and the valuation of the view from 19 Prospect St. Currently, I don’t believe it would be a profitable venture…nor would you break even.
The luxury home for sale at 1210 3rd Ave. N Seattle, WA 98109 is priced according to market conditions, maintains an excellent location, and boasts elegant, custom features.
The pricing of the home at 1210 3rd Ave. N changed in parallel to the flow of the Queen Anne housing market. Starting at just under $1.7 million in February 2011, the home has declined in price to its current listed price. Similarly, the luxury real estate market in Queen Anne saw a decline with a bottoming out near the fourth quarter of 2011.
Interestingly, the home at 1210 3rd Ave. did not change in price through the first quarter of 2012 and has remained strong at its current pricing. That could tell us a couple of things. For one, the seller may be unwilling to part with the home for anything less than $1.5 million. This could be an issue if the market continues moving downward into the third quarter of 2012. Secondly, several interested buyers could have arrived but without a final offer. As a result, the owner and real estate agent may feel they have hit the sweet spot but just haven’t found the right buyer. I tend to agree that this luxury home at 1210 3rd Ave. N is priced correctly.
Other Comparable Luxury Homes For Sale
I’d like to compare this home with two other high-end homes currently for sale in Queen Anne.
The home for sale at 162 Highland Dr. has some superior features to the home at 1210 3rd Ave. N with an amazing view over Queen Anne. However, this home is only priced higher by $500,000. In essence, the view and some special features are accurately assessed at $500,000 and make the difference between 162 Highland Dr. and 1210 3rd Ave. N.
The home at 16 Comstock is one of nicer luxury homes in the area with an amazing view. The home was originally listed for sale in 2010 for just under $3.7 million but has steadily decreased in price to under $2.69 million. The drastic reduction in price could, arguably, undermine the current value of the home at 1201 3rd Ave. While the home at 16 Comstock has declined by almost 20% over two years, the home at 1210 3rd Ave. N has only declined by approximately by 10%.
The million dollar Queen Anne home at 1210 3rd Ave. has all the bells and whistles of other luxury homes in the area. The one thing it would lack is new construction, as the home was built in 1991, and an amazing view.
The New York Observer recently reported how sales were up from 22-28 April as over 20 contracts were signed for homes exceeding $4 million. This hot week for luxury homes in New York, according to the Olshan Luxury Market report hit a new high for 2012.
The Observer went on to further report that “the biggest contract signed for the $22 million duplex co-op at 88 Central Park West…” Most of the New York homes sold in this weekend were condos and 10 of 22 contracts were downtown condos in New York City. The Observer quote Donna Olshan in saying that “One thing I can say absolutely is that condos are outselling co-ops two to one and downtown is as popular as uptown.” The Observer expanded on the success of the luxury real estate market in NYC:
And it’s not only new developments. Downtown townhouses are also selling well, with 17 sales in 2012 (compared with 9 on the townhouse obsessed Upper East Side).
The Observer explained how more buyers in New York are interested in downtown condos and townhouses as the co-op approval process is a bit of a turnoff. Donna was further quoted in that “the average asking price for condos $4 million and above was $2,530 per square foot.” This followed another active week in which the second week of February had 21 contracts, according to Donna Olshan. One would expect this type of turnout as spring rolls around and more high end buyers emerge for million dollar homes in New York.
It’s good to keep things in perspective, though, as Donna related this current upturn in the midst of what occurred last summer:
“Last summer we hit that terrible August with the meltdown in Greece and Congress not being able to pass the budget. The theory is that a lot of people who were interested in buying hit the pause button. Now, the spring is playing catch-up and we’re seeing demand from tons of people.”
Looking at the Seattle real estate market in tandem with this upward trend in NYC, the Seattle market is also trending upward. According to Living Northwest, “median Seattle home sales price inched up 0.56% to $359,500 over last March.” This shows a small growth but is nothing out of the ordinary in the spring season. Not all areas of the market exhibited growth, however, as “condos lagged behind falling 11.75% to $236,500, compared to a year ago,” according to Living Northwest.
I thought Living Northwest also broke down the current Seattle housing market for anyone looking to buy or sell a home:
Currently, Seattle’s real estate market is exhibiting a “seller’s market” characteristic with low inventory supply and high buyer demand. The number of available homes for sale dropped 38.4% from a year ago while sales have increased 15.4%.
This “seller’s market” could be short-lived as those sitting on the fence will recognize the current market and jump in this summer.