In this fast paced, competitive real estate market, it’s common, in an effort to “win”, for buyers to waive contract conditions such as inspection, financing, appraisal, neighborhood review, etc. Buying a condominium is different than buying a house. With condominiums perhaps the most important contract condition in place to protect a buyer is the homeowner association (HOA) resale disclosure documents. The State of Washington requires a seller to provide the HOA resale disclosure to a buyer upon mutual acceptance and the buyer has the right to review and approve or disapprove based on the information contained in the package.
What is a resale certificate? It is a set of documents typically assembled by the condominium’s association manager that includes the summary “resale certificate” which discloses information about the HOA, delinquencies, pending special assessments, HOA reserve account balance, owner occupied vs. rental units, pending lawsuits, etc. Supporting documents will include detailed information about the HOA’s budget and financial statements, reserve study, meeting minutes, rules and regulations, recorded Bylaws and Declaration and insurance.
This is a large package of detailed information which too often buyers glance at briefly or ignore totally. It’s important to understand the health of the HOA and how well it is functioning, how well funded the reserve account is, and what conditions or community rules and regulations could impact a buyer’s planned use of the property.
What should you look for? The recorded Declarations can be hundreds of pages, which is overwhelming. There are major pieces you should review, but it’s wise to spend some time going through all the documents to understand how the HOA is governed and how owner’s monthly assessment dollars are being spent.
Resale Certificate – A 5-7 page document highlighting the major elements of the HOA (owner occupancy, delinquencies, reserve balance, special assessments, lawsuits, etc.).
Budget and financial statements – Review the annual financial statements and current operating budget to see the line-by-line operating expenses. Is the HOA staying within budget? Is the HOA building adequate reserves? Is the HOA financially healthy? Continue reading
Living in communities close to workplaces, shopping, dining and other amenities is becoming increasingly important to buyers when searching for a home. A recent survey conducted on behalf of the National Association of REALTORS® found over half of the respondents preferred to live in a community that offered smaller or no yards but was within walking distance of local amenities and offered shorter work commutes.
Buyers no longer look at just the house – equally, or even more important, is the community and access to workplaces, shopping, dining, transportation, schools, health care and parks or open space. Women tend to put more importance on walk-ability and public transit than men but overall nearly 40% said having public transit nearby was important. Sixty percent of those surveyed would be willing to pay more to live within walking distance of parks, restaurants and shops.
In Bellevue the popularity of urban living was recently confirmed when the One88 condominium residences celebrated the grand opening and sales event. Over 80% of the homes sold in just weeks with buyers committing to reservations to purchase homes that won’t be available for two years. Several new Bellevue townhome communities have experienced the same robust sales activity with buyers committing to pre-sales for homes not scheduled for completion until late spring or summer. Resale condos and townhomes throughuot the eastside, walk-able to urban amenities and workplaces, are experiencing the same high level of buyer interest.
Earlier this month I shared 2017 King County real estate market statistics supplied by the NWMLS. Median sales prices were up 15% county-wide (houses and condos) over 2016. Taking a closer look, here are the 2017 market stats for Bellevue condos:
- 759 condos sold in 2017 (resale and new construction), up from 746 in 2016 for a 2% increase
- The median Bellevue condo sales price was $500,550 in 2017, up 30% over 2016.
Just eight weeks into the new year stats haven’t changed much. There are just 20 condos available for sale in Bellevue. Newly listed condos are trickling into the market and selling quickly. So far this year 61 resale condos (vs. new construction pre-sales) have sold with an average market time of 15 days. Sales prices are averaging 5.5% over the list price.
This year has already seen an all time record condo sale in Bellevue. A penthouse at Bellevue Towers sold earlier this month for $11,950,000. Custom designed throughout, the home offers 6,398 SF of luxury interior living space plus multiple terraces that add 10,000 SF of outdoor space with 360 degree views.
No doubt the penthouse sale will hold the city/county/state condo sales record for some time, but sales data for the balance of the market is a bit more realistic. Of the 61 resale condos sold since January 1st, sales prices ranged from $202,750 for a 691 SF one bedroom/one bath to $2,237,500 for a 2,615 SF 2 bedroom + den/2 bath penthouse. The median Bellevue condo sales price so far this year is $558,568, but of those 61 sales, 17 (20%) sold for $400,000 or less. Condo values in and around the central business district will continue to command higher prices per square foot, but step just outside the downtown core and prices are far more affordable while still offering easy access to downtown’s workplaces, nightlife and arts and Bellevue’s sought after schools.
Available condos are going to be in short supply for the foreseeable future. A limited number of communities are in design review or under construction, but delivery of those homes is 2+ years away. A few recently completed new communities, mostly multi-level townhomes, are adding new homes to the mix but supply is limited with prices starting in the $700,000s and up. The supply of condos this year is likely to be found in the dozens of existing communities just outside the central business district. They offer a sought after Bellevue address and access to great schools. New construction is very sexy, and the amenities luxurious, but older communities often offer larger floor plans, more green space and more affordable prices. Trading a few blocks of location may gain you a lot of space and lifestyle for less money. Those resale condos are going to be in short supply this year too. If you’re ready to sell, be ready to move quickly. If you’re ready to buy, be ready to act quickly and work with a Realtor® who knows and understands the market.
Interest in rentals remains strong, but there’s been a noticeable slight decline in area rents this year. Even in high demand urban areas, rents have dipped slightly. With thousands of new apartments recently completed or nearing completion, and hundreds more under construction, rental supply may have begun to outpace demand.
If you own a rental property there will be more competition the next time you negotiate a lease renewal. Hundreds of new apartments are available offering modern finishes, new appliances, high tech features and a long list of community amenities and services. Tenants may not be as quick to accept a rent increase or lease renewal when, for the same money, or attractive lease-signing incentives, they can move into newer digs.
If you’ve owned your investment property for a while, this may be the time to sell and maximize your return on investment. Available inventory for sale is at historic lows and buyer demand is at an all time high – the perfect storm if you’re a seller. Properties sell quickly, often with multiple offers. Renting or selling, your property needs to be in good condition, but any minor cosmetic investment will translate to a major return when you sell.
Need market information? I’ve lived and worked in downtown Bellevue for over 30 years – there isn’t much I don’t know and love about the city. A Realtor® and condo specialist for over two decades, I combine my knowledge of the city with years of condo experience to advise and guide clients through the process of buying or selling a home.
An article in the Puget Sound Business Journal this week compared the available local condominium inventory to New York City. Granted, NYC is a much larger and more expensive market, but currently NYC has 388 condos for sale priced less than $500,00. At the time the article was written there were only five condos available for sale in Seattle priced under $500,000. Here on the greater Eastside there are less than 100 condos available for sale – not nearly enough to satisfy demand.
We are fortunate to live in a region where the economy is thriving, employers are hiring, housing is relatively affordable (compared to some other major metropolitan areas) and its a beautiful place to live with a temperate climate and year-round recreation options. Recent U.S. Census Bureau reports show that nearly 250 people move to the Seattle/Bellevue metropolitan area every week (for all the reasons just mentioned). Its also a great place to retire because of the mild climate, vibrant arts, entertainment and social scene and world class health care services, so people aren’t leaving in great numbers either. Because retirees stay in the area and because job opportunities bring hundreds of people a day to the area, it doesn’t appear there will be much change or relief to the tight inventory or escalating housing prices in the near future. Continue reading
It’s a common misconception that a minimum 20% down payment is required to purchase a home. Buyers, saving to put 20% down on a home purchase, could be missing the opportunity to buy a home, and instead are watching prices continue to escalate.
There are excellent loan programs available with 5% or 10% down (even as little as 3.5%), requiring less cash out-of-pocket for buyers. A lower down payment may likely result in a somewhat higher monthly payment, but when you consider that houses and condos in the Seattle/Bellevue area have increased in value 14% or more so far this year, and expected to continue to increase in value next year, waiting to buy could prove to be more costly. With rents also on the rise, it could make more sense to buy this year and start putting money toward building equity rather than toward another rent increase next year. Continue reading
With only 24 resale condos listed for sale in downtown Bellevue there are very few choices for buyers ready to purchase. (Add in the 39 developer owned units still available at Washington Square and the total is barely over 60 in the entire downtown marketplace).
Inventory is at historic lows, prices are at or near record highs, multiple offers are the norm, higher buyer demand continues and there's no new condo construction in site . . . this year may well be your best time to sell your home or investment property. Bellevue is continuing to grow, more companies are moving to the city than are leaving, the arts and social scene is thriving, some of the best shopping and dining north of San Francisco can be found in Bellevue and the city is in the center of an award winning school district. The city has so much to offer for a variety of lifestyles and budgets. Condo prices start in the mid $300,000s (yes, there are affordable condos downtown) and can skyrocket to several million for a view penthouse. Don't miss the opportunity to maximize your return on investment if you're ready to make a change, find more space, move up to a view or reinvest in another rental property. 2016 could be the year.
Condominiums offer a great opportunity for first time buyers to enter homeownership and begin to build wealth, equity and credit. FHA (Federal Housing Administration) loans were a popuilar option for financing as they often offered more favorable interest rates and down payment options than conventional loans. In recent years FHA has placed significant restrictions on the purchase and sale of condominiums, preventing buyers from purchasing condos, harming homeowners who want to sell and limiting the ability of condominium communities to attract buyers. In order to obtain FHA financing on a condominium, the community must meet a strict list of requirements and obtain FHA certification (a labor intensive process and expensive for the HOA) and recertification is required every several years. As a result, communities have let their certification lapse and FHA insured condo mortgages have plummeted in recent years.
Lawmakers are urging FHA to review these guidelines and ease restrictions on condominium community certification requirements in an effort to make FHA financing an easier process and promote affordable home ownership opportunities. The National Association of Realtors® (NAR) has also been pushing FHA on many of these proposed changes for over three years.
Condos are a critical part of the natural progression of home ownership. Reducing the current restrictions impacting FHA condo financing will go a long way in assisting first time buyers who are entering the market, current condo owners who are ready to sell and move up to a larger home and seasoned homeowners who are ready to downsize to a lower maintenance lifestyle.
Housing prices keep going up and available inventory keeps shrinking . . . this combination continues to drive prices upward with no immediate relief in sight. With Eastside home values appreciating on average 10%+ per year, finding an affordable home can be challenging.
While the suburbs are popular with some buyers, the demand for urban living is on the rise. Buyers are seeking communities walk-able to workplaces, nightlife, arts and entertainment, transportation, schools ad parks. Downtown Bellevue checks off all those boxes which is what makes it an increasingly high demand place to live. While "affordable" may not be the first word that comes to mind when thinking about downtown Bellevue real estate, there are many condo communities in or within a block or two of downtown with homes priced under $500,000. So far this year 166 condos have sold in the 98004 zip code; 45% of those sold for under $500,000. There are less than 80 condos currently on the market in the downtown marketplace (about half of normal); nearly 20% are priced under $500,000. Expanding the search to condo and townhome communities within a mile of downtown significantly increases the choices and still keeps the commute to work, restaurants, shopping and events at less than five minutes.
Whether you're a first time buyer, relocating here for a new job, downsizing from a larger home or giving up the "burbs" for city living, its possible to find the right fit for your lifestyle without braking the bank.