Condo Boom Just Starting?
Seattle's economy likely to keep housing market strong
By AUBREY COHENP-I REPORTER
Seattle has plenty of condominiums left to build and plenty of people coming to live in them, according to experts who spoke at a local housing forum Friday.
"We're just getting started in Seattle," Bryon Ziegler, a developer representative for Williams Marketing, told home industry professionals at his company's 2007 market forecast.
Williams, a Seattle company that works with home developers, set the tone with its invitation, noting that Seattle's 228 households per square mile downtown lags far behind the 680 per square mile in downtown Vancouver, B.C., the 701 in San Francisco and the 3,223 in New York.
Several speakers said the media are trying too hard to declare a bursting housing bubble in stories about a national market that, in September, saw the largest year-over-year drop in the price of the typical new home in 35 years.
Seattle's median price was up from the year before, but it was the smallest gain since January 2004 and the first time since then that prices declined for two straight months.
"The U.S. market is cooling rapidly, no question," said Stuart Tyrie, vice president of Wells Fargo Home Mortgage's Builder Division.
Markets without basic fundamentals would suffer the most, while other areas would fare better, Tyrie said. "The economic fundamentals here are stronger than in most parts of the country," he said.
"You've got great job growth, you've got higher income and you've got population influx."
The national home market should bottom out in the second or third quarter of next year and rebound in 2008, Tyrie said. "You want a good deal on a place in Florida? Give it about eight more months."
Tyrie downplayed speculation that people who took out unconventional mortgages would end up losing their homes and adding to an oversupply in the market. He said such loans were a small percentage of mortgages and most people would be able to refinance out of them.
Looking longer term, Joseph Cortright, an economist with Impresa Consulting of Portland, said economic growth would depend on courting a shrinking pool of college-educated 25- to 34-year-olds.
These people, whom he called "the young and the restless," want to find a job where they want to live, rather than moving where work is, and are looking for a place that is diverse, vibrant, distinctive, well run and receptive to new ideas.
Young people have always been more likely than others to live in and near city centers, Cortright said. Now, he said, they are much more likely to do so than they were just a decade ago, and Seattle is one of a handful of metropolitan areas where educated young people are more likely to live in the city center than in the suburbs.
"Only a few metropolitan areas have centers that people want to live in," he said. "Every place has nice suburbs."
Seattle's comprehensive plan calls for adding 47,000 households and 84,000 jobs in the city through 2024.
Ziegler focused on Seattle's rapidly developing downtown condo market, saying downtown has drawn young professionals and an increasing number of empty nesters. But he noted that it was attracting about half as many single women as men and nearly no families with children.
Denser urban centers also are catching on outside of downtown, in places such as Ballard and Wallingford, Ziegler said. "People don't have to move from their neighborhoods to enjoy the condominium lifestyle."
Downtown still needs more public spaces, a school and more-affordable housing, he said. "We can't be a city of just the rich downtown and everybody else on the edge."
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