Starting June 12th of this year, the Seattle Times reports that a check-up termed a reserve study which every condo association will be required to prepare and disclose to prospective buyers which lists just how much money will be needed for existing maintenance that still needs to be done, such as new paint or a repaired roof.  This money is the reserve.  This reserve account is separate from the condo project’s annual budget.

There have been far too many buyers who purchase a condo only to find in the aftermath that they are strapped with a huge special assessment that they are expected to pay for because their condo board had virtually no reserves and was left with the only option—making the condo-owners cover it.   Since these special assessments usually happen when maintenance has been long neglected, condo owners are often slapped with enormous bills.  Furious, these angry buyers turn on managers, agents, the boards and the seller.  But what they really need to be is informed so that they knew what to expect before buying.  This law will make that possible.

A condo association may choose to forgo this reserve study only if it will cause “unreasonable hardship,” but is then required to tell inform all prospective buyers in writing: “The lack of a current reserve study poses certain risks to you, the purchaser. Insufficient reserves may, under some circumstances, require you to pay” an assessment.  This might serve as a deterrent to shrewd buyers.

Certainly, a unit for sale from an association has no reserves is going to be cheaper, noted Marshall Johnson, president at the CWD Group.   But what the condo associations save by scrimping on the reserves will be lost in the price they get for it.

This new law will also bring Washington to the top of the list amongst only a handful (five) of other states who now require condo associations to provide a reserve study. 

Kris Sunberg, a seasoned condo attorney, says that the condo world’s dirty little secret is that “most condos are severely underfunded.”  He also predicted that once the actual cost of penny-pinching on reserve accounts dawns on associations, the reserves will grow and the problem will have corrected itself. He calls this new law the “biggest thing to happen since the Condominium Act of 1990 was passed.” 

Read the Times article here 

“Large real estate deals are not being financed right now,” Said Alfred Clise the Properties Chief Executive on Thursday, according to an article in the Seattle Times.

Clise plans to put this large swatch of property back on the market once credit conditions improve.  This will only delay, not destroy their plans, it seems.  The Clise family’s dream is to sell the property in one block (they’re determined to not give it up in bits and pieces) and this large chunk should go to a buyer with their similar vision of using this space for something as grand and comparable to New York’s Rockefeller Center.

Because Clise is looking for a developer with a dream of such large proportions, the family has already refused several offers, (these have reached upwards of $6 mil) in their stubborn adherence to the grand-scale dream.

 So for now, it’s not for sale…  And Seattle awaits the time when Clise’s dream will be born.

 Read the Times article here.

 Starting May 1st, 2008, for example, the lender United Guarantee has chosen to ban loans in hundreds of zip-codes that have been labeled as “declining” markets regardless of an applicant’s resources or credit score.    Also, several large lenders including Fannie Mae and Freddie Mac, as well as some privately owned mortgage insurers will be tightening up the requirements to qualify for a loan.  This has been explained as necessary due to such things as weak sales and diminishing property values. 

Some lenders have decided to only agree to cover a fixed percentage of units per condo project, in order to minimize risk of loss.  Thus, if there are already a certain percent of loans in the complex, if the lender is approached for another loan in the same building, the applicant will probably be turned down.

Most loans will now require at least a 10% down payment, whereas buyers willing to put 20% down upfront should not be affected by these new policies.

Read the Seattle Times article: A condo loan or refinancing soon will be tougher 

 The city of Seattle plans to funnel 1,000 more homes into the Ballard area (which will include condos, townhouses, and apartments) between 2005 and 2024.

While many can’t stand the new additions to the Ballard scene such as the  Canal Station Condos, and make the case for wanting things to be the way things were (remember the huge move that saved the Denny’s Restaurant building on 15th st back in February), others compromise slightly.  One Ballard resident said, “I think it’s possible to do development with respect for people and their community attachments and their community gathering places.”

The trick seems to be an answer to the question: How does a town grow (since this will demand more housing, and thus more apartments, condos, etc) while still maintaining its original charm and community?  Time will tell as growth continues to mold and change the face of Ballard.

Read the full PI article here

Already more than 500 people have registered to attend this auction, which will be held at the Kitsap County Convention Center. 

A potential buyer quotes, “If it looks like a person could buy one for a price somewhat below what they were being marketed for before the auction, we’d be interested in doing that…But if it becomes a feeding frenzy, we’ll go have a cup of coffee.”

The Seattle Times article compares this method of selling condos to eBay, and it just might turn into a frantic bidding war near the auction’s end. 

These units are being put on the auction block due to the developer’s desire to release the burden of the construction loan.  According to Mark Goldberg, chairman of M.S. Cavoad Co., the building’s developer, it’s not a problem with the building itself but it was simply the timing as the Bremerton market slowed to a stop, joining with the national trend.

Though auctioning property has caught on in places like New Zealand, Australia, and some place in Europe, it’s still pretty new here, which is another reason for interested buyers to be careful of getting swept away in a bidding war and paying too much.  A lesser known tidbit about auctioning is that the “reserve” which this article calls the secret threshold price the seller will accept.  If bids do not reach this or move above it, the seller does not have to sell (thus, the price that the bidding stops at isn’t necessarily the end).

Finally, Goldberg comments on the overall bargain, “Can you show me another steel-and-concrete building, waterfront, that’s under $500 a square foot? If people do their homework, they’ll recognize it.”

The Seattle Times also posted an with tips and info.  Check it out.

 Read the Times article.

There will be a total of 8 units, all 762 square feet. Built in the 1920s with beautiful brick architecture, this vintage condo has maintained its original hardwoods and arches and has been updated with more modern touches to help preserve the beauty and usefulness of both worlds.  They will be hosting a “sneak peak” this Thursday, April 3rd 6-8pm.  This is timed to coincide with sunset and bathe the condo in some golden light.

The SCR notes that unit #401 has the best view.

Thanks to the Seattle Condo Review and Seattle Condo Blog for this info.

P.S. and just for fun, if you’ve bought and your head’s full of post-move junk, the Seattle Times has an article on things to remember after buying your home that could save you a lot of $$$$ down the road.   Check it out:  http://seattletimes.nwsource.com/html/realestate/2004314029_ownershiptips30.html

The Trophy building is to contain 19 total units, one unit short of requiring review by the city’s design and review board, which has caused many eyebrows to be raised. It’s difficult to fathom a skyscraper of this magnitude could be erected with no input or guidance from the city, especially in the wake of the widely publicized Cosmopolitan fiasco. To add to the illogicality of the situation, the Trophy Building is 40 feet taller than any other proposed residential tower in its proximity, and yet it appears to be the only exception to the review process.

According to the developer, avoiding review was unintentional, although it does bring up some questions as to whether or not other developers will take advantage of this loophole in the future and what the city will do, if anything, to close it. *Info Courtesy of The Stranger

The market is overstocked with developers realizing that units just have to be sold, whatever the cost.  According to Seattle economist Matt Gardener says that “declines in standing inventory” are what every builder wants to see.

The article relates that a buyer purchased a house last month for 350K, which was on the market for 510K in Sept. 2006.  Although price drops likes these tend to annoy and aggravate buyers who purchased in the same area before the prices were reduced even further, it seems everyone who is buying earlier is upset because “the next guy” got a similar home for a yet lower price.  To deter some of this early-buyer annoyance, some builders are using other incentives than simple price cuts and are utilizing things like buyer bonuses and upgrades to entice people to buy.

Gardner is quoted as predicting ”prices will fall by 5 percent this year in the Seattle area,” and this particular article ends with a tidbit of advice from Vincent Healy, the owner of Seattle’s Clearpoint Appraisal.  Healy says to buyers seeking homes on the market today:

“It’s a good time to shop carefully.”

Read the full PI article.

Although the previous residents of Bellevue were for the most part folks ranging between middle-aged and senior citizens, Diana Canzoneri, Bellevue’s lead demographer says that the number of young professionals (ages 20-30) will continue to rise, due to the growing number of tech jobs being created in this area.

And so the face of Bellevue changes…

 Read more of the Times article here.

Matt Gardner, a Seattle land-use economist commented that The term ‘pioneering’ is not something that lenders want to be hearing right now,” in a Seattle Times announcing 1 Hotel’s halt in construction.  And this is the problem.  Lenders have not been sold on what this project is trying to do as the first marketed hotel-condo project in Seattle, 1 Hotel’s avant-garde flavor is making progress difficult.

 The proposed re-design of this $200 million, 23-story building will change 132 out of the planned 176 of the hotel-condo suites (only 20 or 21 of which have been sold) and replace these 132 with 192 conventional hotel suites, smaller in size.  The redesign won’t change the 51 residential units where 20 of them already have condo commitments. 

The concept of hotel-condo suites is newer to Seattle than places like Florida and Las Vegas, where it has already caught on.  Condo owners will buy a unit and then allow hotel managers to take care of it and put paying overnight customers in the rooms when the owner isn’t using it.  An interesting concept, but it seems it will take a while before it is well-established in here.

Read the Times article here