Seattle, Bellevue luxury condominium towers are slow to fill up - Puget Sound Business Journal (Seattle):

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The units — at Fifteen the Four Seasons Private Residences, Olive 8, Bellevue Towerzs and Washington SquareTowers — represent the majorityt of large condos that have opened here in the past 18 In many cases, dozens of pre-sale agreements booked by developerds have failed to come to fruition. County recordx show just 317 units have recorded closed sales out ofthe 1,3221 offered at these five projects, which is fewef than some of the developers had expectedc to sell at this point. The sluggisuh pace of sales is ripplingh throughthe region’s housing market.
Developers have been forced to extende their loans andoffer financing, extensionz and other support to nail down buyers. If saled don’t pick up, some of the pain coulxd spread to lenders and otherxs involvedwith development. Emptuy towers also are hardly a sales-booste r for the region’s fragile housing market, which has only recentlyt seen an uptick in sales followinyg abrutal year. “It’s a psychologyt question,” said Desiree regional labor economistfor Seattle-King County. “Ij can imagine how people will feel looking arounr and how confident people will feel inmaking purchases.” The reasonsx for the sales slowdown are numerous.
Some prospectivwe buyers are having difficulty selling theid current homes to pay for theirdnew homes, which range from $369,000 for a studilo to $9.2 million for a four-bedroom penthouse. Some potential buyerxs have either lost jobs or fearthey will. Others no longer qualify for the loan they lined up when they firstf agreedto buy. With housing priceas still sliding, some buyers also wonder if they mightr be payingtoo much. “A lot of buyersw are questioning what the real valuwe of those unitsreally are,” said land use economist Matt a principal in market research firm Gardne r Economics LLC, based in Seattle.
Speculatorsw who bet that prices would risealso aren’t closing. Bellevue Towers is being sued by prospective buyerss who want their earnestmoney back, whild some prospective buyers at Olivde 8 are exploring lega l action, the developer said. “Very clearly the dynamicws of the economyhave changed,” said Mark Edlen, a principal at Portland-basef Gerding Edlen Development, the developer of Bellevue Towers. “We’rde trying to work with each individual buyer.” The Pugett Sound Business Journal used data providef by the King County Department of Assessments in calculatingb completed sales for eachcondo project.
The records run througuh the first week of June and only include sales of completed Insome cases, developers have closed on more units since then that have not yet been The Olive 8 development in downtownb Seattle has completed 16 sales out of 229 units sincse it opened in April, according to county data. Whilw developer said the project has closed at leasg a dozenmore sales, that’ss still half of the closings it had anticipated by this said President David Across the lake, Bellevue Towers has recorded just 29 salews out of 534 units, according to countyy records.
The developers, who say they have since closed on severa lmore units, say they didn’t have a set salee goal, but were anticipating “more than that.” To be developers have recently reported an uptick in buyer interestf as part of the housinyg market’s improvement in the last couple of Two of the five projects, the Four Seasons and Fifteen say they expect to pay off theit construction loans shortly. And few new projects are in the workds to further floodthe market. But developers’ sales struggles illustrater the plethora of issues that are still affectintg the residential realestate market.
As a result, developers are pullinhg out a host of tools to fillempty buildings. Amongh them: — R.C. Hedreen, the developer of Olive 8, has turnef itself into a lender and is offering qualified potential buyerxssecond mortgages. That allows potential home buyerswho don’ft meet stricter condo mortgage guidelines to afford the said Thyer. “We’re in a positiohn to make those loans,” he said. Washingtoj Square developer is also offerin second mortgages at interest rates matched to thefirstt mortgage.
— Some developers are offeringg buyers who have put down earnesf money extensions on their closing date as they work througb thelending process, including Olive 8, Fifteen Twenty-One Seconds Avenue and Bellevue Towers. — Bellevur Towers has started a “selle r assistance program,” available to potential buyersa who have already put money down on a condobut can’t go through with the purchasew because their current homes won’t If the buyer has to lower the price of the currenty home, Bellevue Towers will similarly lower the pricw of the condo, said Patrick Clark, principal of RealtyTrust.
— Washington Square, perhaps the most aggressive in itssalese strategy, is offering outside real estate agents a 3 percent commission on any sales they bringt to the project. The project also has a lease-to-own prograk under which a renter can applt up to six months of lease payments to the down paymentr if the renter decides to buy the So far 52 units have been leased underethe program. It’s too soon to tell how many will be convertedcto sales, with the majority of the leasess carrying into 2010, said Mike the chief operating officer of Washington As developers wrangle with prospective buyers for they also are working with lenders.