The new buzz word around these parts is "repartment"...the reverting of condo conversions back to apartments. The once lava-sizzling hot Seattle condo market has gotten hit with a crisp winter's blast. The cranes are still up for the eight new condominium projects in the downtown area, as well as another ten in Seattle's Eastside and Northend neighborhoods. But as the mortgage industry took a hit, fears of a crash and the 84% jump in available condo inventory have taken its toll. The major developers will likely ride out the coming storm but the smaller conversion developers are on life support.
Two of the more infamous repartmentations (I suppose I can make up my own word) were the Max (three sales in three weeks) and the Strata (two sales in five weeks). And, at least two conversion developers are in the financial hot seat with one filing for bankruptcy (though they didn't proceed).
In addition to the conversions, at least three new condo construction projects are proceeding as apartments. Two opted to change prior to construction. However, the third just sold the project which will go forward as apartments...it's about 6 months from completion! Apparently, they only had reservations for 17 out of 114 units since they went on sale back in March 2007.
Unfortunately, these developments reflect the current state of the Seattle's condo market. However, there's a silver lining: fewer tenants to be turned out this year and the condo inventory will stabilize as fewer projects come to fruition. In one fell swoop the condo inventory fell by 114 units.
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