Downtown Condo Ponderings
· Posted Wednesday July 19, 2006 by jamie
One of the things that consistently amazes me about the Tacoma condo boom is the prices being demanded, which in many cases are way above attainable for the median income levels of Tacoma. Sure, baby boomers are retiring and downsizing, etc., but I can’t see that they all want to move into urban condos; at some point the demand for $500k condos is going to dry up. Furthermore, these prices effectively knock younger people out of the market for living downtown, and I don’t think that urban planners look at retirees as a key to downtown vibrancy.
Let’s put this in perspective of the choices offered to a young homebuyer. We bought our house five years ago for less than $150k. Over that time, thanks to being located in very close proximity to the core business area of Sixth Avenue, it has appreciated in value significantly. Based on comparisons to nearby sales, we’re probably safe in estimating that it may have doubled in value. If we were to sell our home, it would probably be quite a stretch for us to even consider buying in our neighborhood, and I think the same is true of a many others in Tacoma. At the same time, $300k is a lot less than we’d have to pay for most downtown condos, yet with a house, you get a yard, a buffer from neighbors, etc.—things that a condo does not have. Why would someone, especially a young person with limited financial resources, even consider buying a condo if they could get an equivalently-sized house for significantly less money?
So here’s what I’m thinking. We need some affordable downtown condos. Barbara Clements over at the TNT posted this article about the increased presence of 20-somethings in the real estate market. In that article, there are multiple mentions of the NoMa Condominiums in Ballard, which are small condos starting at $180k. I think it is safe to say that is dirt cheap by Ballard standards. So what would happen if someone were to build the equivalent in downtown Tacoma: small condos starting at, say $120k, that are within reach of the younger population downtown so wants to attract? Still nicely built, still market rate, just smaller and without the frills. This of course is nothing novel, common sense even, but I’m thinking there would be a definite market for this, if the developers would quit trying to make everything luxury. Anyone interested? Perhaps someone with deep enough pockets to make it happen might be listening…
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Sarah and gave downtown condos a chance more than a year ago before all these new developments took off. Even then, for the price, we just couldn’t justify the investment considering the up-front cost coupled with the minimal physical purchase. I think affordable condos would really continue driving the vibrance I’m sure we all hope downtown should have. I’m also sure if they were priced between 100 and 200 those buildings wouldn’t stay empty for long. Just don’t make it look and feel like Pacific Tower.
— KevinFreitas Jul 19, 12:49 PM #Oh, man, don’t even get me started on Pacific Tower…
— jamie Jul 19, 12:53 PM #I bought a downtown condo a few months ago in March.It has new everything. Pergo and Tile Floors, Granite Counters, Stainless Steel Appliances, New Cabinets, New doors, windows, washer/dryer, 550 sqft (decent size for one person) $110k
Oh and views of Downtown, Cascades, and the Tacoma Dome…
My building has a great mix of people.. Real Estate agent, Flight Attendants, Mortgage Broker, Hairstylist, Garbage Man, PLU Grads, UWT students…
But the days of $120k and under condos might be gone. I hear the building down the street that is the exact duplicate of mine is being converted to condos and the one bedrooms will go for $175k. That building has no view.
— Jake Jul 19, 03:04 PM #FYI new Pacific Tower units are still coming on the market. Will that place ever sell out?
— Jake Jul 19, 03:07 PM #(20-something wanting to buy a home in Tacoma) I’d so buy a downtown condo for $120,000. It seems like just a few years ago I might have been able to do this, but that’s not the emphasis in the “market” right now. Sheesh. When are the markets going to produce a freakin’ grocery store where we need it and affordable housing? Oh that’s right, they’re not going to without some sort of economic incentive.
— Chris Karnes Jul 19, 10:05 PM #Unfortunately, most developers really don’t care about improving neighborhoods and cities. Most really are chasing the big green dollar signs, which is why we never see any affordable homes marketed toward young people. What we need is more developers who could care less about their profit margins and simply be happy helping create vibrant neighborhoods while breaking even on their projects. Maybe we could all pool our resources and start our own development company with that exact purpose. Somebody needs to take action! Anyone else?
— Andre Jul 19, 11:18 PM #I, for one, nominate Andre as our new mayor of “Crazy Town”
— Richard Ryan Anderson Jul 20, 11:22 AM #Well, I just purchased a new Townhome downtown. For me the incentive was the 10 year tax abatement. So while the purchase price is more than a similarly sized house, the mortgage is probably about the same, sometimes less.
— Gorman Jul 20, 03:30 PM #