Prices of Seattle-area condos surged in January with double-digit annual increases in stark contrast to single-family homes that remained mostly flat.
According to data from the Northwest Multiple Listing Services, King County’s median condo price was $600,000 in January, up 21% over the year. The median price in Seattle hit $689,975 last month, up 28% compared to a year earlier. On the Eastside, the median price was $734,900, up nearly 29%.
The jump in prices for condos came as the Seattle-area still-tight housing market drove buyers to look into options beyond single-family homes. Real estate agents say certain types of condos, like town homes and backyard cottages, are drawing interest from frustrated would-be buyers.
“First-time homebuyers are no longer willing to wait for market conditions to improve,” said Ryan Palardy, a broker with Seattle-based Get Happy at Home.
Despite high mortgage rates, “they are out and ready to make purchases,” Palardy said. Condos are “often the only way, or at least the easiest way, for them to get into something resembling the type of homeownership that they desire.”
John Manning, managing broker for Seattle-based RE/MAX Gateway, said the overall condo market hasn’t changed much for buyers or sellers, though.
“We’re not really seeing a huge uptick in demand,” Manning said, noting NWMLS data shows low- and midpriced condos are staying on the market for 60 days or more.
Manning said the demand for higher-priced condos has been stronger. Seattle had at least nine condos recently sell for at least $1 million, and Redmond had six, Manning said.
According to NWMLS, January’s median sales prices for condos in Kirkland and Woodinville topped $1 million.
What’s behind the price increases?
“It seems like there were a lot of these nontraditional types of condos sold in January, which pushed the price, the annual percentage change in price, up quite a bit,” said Steven Bourassa, director of the Washington Center for Real Estate Research.
The NWMLS counts several housing types as “condos,” including town homes, converted single-family homes and accessory dwelling units added to a backyard or space beside an existing home.
Bourassa said January’s NWMLS sales and price figures for condos are difficult to interpret given this mix of property types.
The sales picture for condos was also uneven in January. Condo sales were way up from last year, increasing 16% over the year to 144 total sales in Seattle and by 27% in King County to 352 sales, the NWMLS reported. However, sales declined in Seattle and King County from December, normally a sleepy month for sales overall. By contrast, 480 condos sold in King County in January 2021 during a more robust market.
Seattle broker Palardy said Amazon workers under a return-to-office mandate have been looking to buy condos downtown.
But, he added, they were not rushing to buy. “They’re taking their sweet time finding a place and they’re hoping to negotiate prices down,” Palardy said.
Condo buyers have been favoring accessory dwelling units, such as backyard cottages, Palardy said. These “are condos in name only,” Palardy said. They can be add-on units to an existing home with a shared wall, or detached homes often built in the backyard.
Seattle encouraged ADU development with zoning that allows for more density in the neighborhoods, and there’s been a significant jump in the number of permits since 2020, according to city data.
Palardy said the ADUs look more like small houses and town homes but are usually more affordable than single-family houses.
“All of a sudden people are jumping on these new-construction condos, partially because they just now are hitting the market and partially because people are desperate to get into the market and these represent the most affordable price points,” Palardy said.
As for apartment-style condos, “they may be inching up in price, but barely,” Palardy said. “They’re not getting the traffic. It takes still a few months to sell and the people that are buying are still looking to get deals and they’re willing to take their time.”
More condos hit the market in January. According to the NWMLS, it would take 3½ months to sell all the condos listed in King County, which increased from below 2½ months a year earlier. It remains below the four to six months the listing service considers a balanced market.
Condos in the lower price tiers were once an option for first-time homebuyers in Seattle, but as prices, property taxes, mortgage rates and homeowner association fees increased, that is no longer so much the case, RE/MAX Gateway managing broker Manning said. Some condo owners, especially retirees, are struggling to keep up with these costs, selling their condos and moving out of the city.
HOA fees can run as high as $800 or $1,000 a month for a single-bedroom unit in Seattle. While that fee often includes the cost of water, sewer and sanitation, “it just adds to the perceived expensiveness,” Manning said. Property taxes on a one-bedroom unit in Seattle can also be $5,000 annually.
“When you couple property taxes with homeowners association dues and then add high interest rates to it, owning the condominium has become a burdensome thing,” Manning said.
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