The project’s location at the meeting place of downtown’s retail, office, residential, restaurant and entertainment zones was an inspiration for the name NEXUS.
SEATTLE — After a surge that saw more than 12,000 new rental-housing units developed in downtown Seattle since 2011, just 866 condominiums were delivered during the same market cycle.
What’s even more extraordinary, according to Dean Jones of Realogics Sotheby’s International Realty, is there are currently only a dozen of those new condominiums remaining to purchase. Simply put, 99 percent of what was built for sale is already sold. In addition, more than two-thirds of what’s proposed to be built by 2019 is also reserved or presold.
“It’s a stark reminder that when it comes to new construction high-rises, demand can rise much quicker than supply,” Jones says. “It can take three to four years to design, entitle and build a condominium tower, and meanwhile median home prices are rising double-digits year-over-year, which is only driving more demand for presales in today’s market.”
One of the two new developments in the for-sale pipeline is NEXUS, which his firm is representing. The 383-unit high-rise is being built at 1200 Howell St. and is slated to break ground in January. Jones says more than 300 of the homes have already been reserved for priority presales.
A reservation requires a fully-refundable $5,000 deposit held in escrow, which will accrue toward the earnest money deposit due in the New Year when the purchase option matures. The popularity of the program has led the seller, Burrard Development, to accept second-position reservations in the event a first position rescinds.
Closings are expected to occur by mid-2019.
NEXUS reservation holders are savvy and enjoy a preferred position in the next development cycle, according to Michael Cannon, the sales director for the development.
“They realize the market is rising and see the value of securing an option to purchase without fear of multiple offers, price escalation or worse — missing out on the opportunity to purchase a home in one of the first of few developments likely to deliver before 2020,” says Cannon. “They also recognize NEXUS isn’t quite like anything that has been offered before in downtown Seattle. From our progressive architecture and floor plans to the integrated amenities and high-tech features, NEXUS is literally an exclamation point on the buy-versus-rent debate that’s shifting an unprecedented number of apartment dwellers to consider their options with ownership, especially at the more attainable price points below $700,000.
“At the same time, existing condominium owners and move-down empty nesters are also drawn to the diverse floor plans, premier finishes and dynamic views offered higher in the tower,” he says.
Cannon says downtown Seattle is literally teaming with potential homebuyers who are highly-qualified and incubating within the surrounding apartment buildings. He notes that in many cases, buyers can secure their new home with as little as 5 percent down and mortgage payments that are similar to rents being paid.
“Even if fewer than 10 percent of the more recently relocated apartment dwellers decide to purchase over the next few years, we’ll be out of new construction supply and all the resale inventory well into 2020,” says Cannon. “The market will respond to this supply and demand imbalance — dramatically increasing the cost of ownership ahead for those that wait.”