Seattle Foreclosure Homes Pushing Down Condo Prices

by Donald Hanz on cities

Seattle foreclosure homes have been pushing down condo prices in the area, particularly condo units in the high-end sector.

One prominent Seattle condo property that has lowered its unit prices is the Escala condo tower. Rennie Marketing Systems said price discounts range from 20 to 50 percent. Previously, condo units at the building were priced between $600,000 and $12 million.

Now, one-bedroom units are priced at $384,000; two-bedroom units are offered at $699,000; and three-bedroom units are priced at $1.6 million. These starting prices rise with additional features on certain units.

A penthouse unit previously priced at $4 million is now being sold for $2.3 million. The most expensive unit, initially priced at $12 million, is now being sold for less than $7 million.

The condo tower was developed at a cost of $370 million by Seattle firm Lexas Co., which decided to lower prices after it sold only 6 units and after another pricey downtown condo complex, Four Seasons, announced huge price discounts on its units.

When Lexar principals John and Eric Midby were still constructing the units, they said they will increase the prices of the units by about 7 percent despite price pressures from Seattle foreclosure homes. But however strong the Seattle market is because of the presence of Boeing, Microsoft and other large businesses, condo prices have to bow down to the reduced prices of single-family houses.

Washington foreclosures slowed in February by 24 percent month-over-month and by 13 percent year-over-year, but investors looking to buy foreclosure houses for sale in the state, particularly Seattle, can consider condo units which have been plunging in price levels.

According to the King County Department of Assessments, just around 25 percent of the 1,588 condo units for sale in Seattle and in Bellevue have been sold. To raise money to repay their loans, developers have been cutting down prices and have been giving out incentives to entice buyers. Recently, the luxury project Four Seasons has cut down its unit prices by about 45 percent.

Meanwhile, the unsold 18 units at the 126-unit condo tower facing the downtown central library will be sold off at an auction this March. The tower opened in 2007 and needs to have all its units occupied to strengthen its finances.

Over the past year, auctioning off unsold condo units has been the strategy chosen by a rising number of developers to make their projects afloat in the midst of lower-priced Seattle foreclosure homes.

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