Seattle, Bellevue luxury condominium towers are slow to fill up - Phoenix Business Journal:

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The units — at Fifteeh Twenty-One, the Four Seasons Privatde Residences, Olive 8, Bellevue Towers and Washington SquareTowers — represent the majorityt of large condos that have opene d here in the past 18 months. In many cases, dozens of pre-salse agreements booked by developers have failed to cometo fruition. Countyt records show just 317 units have recordefd closed sales out ofthe 1,321 offered at these five projects, which is fewer than some of the developers had expectecd to sell at this point. The sluggish pace of salews is rippling throughthe region’s housingf market.
Developers have been forced to extened their loans and offer extensions and other support to naildown buyers. If saled don’t pick up, some of the pain could spread to lenders and others involvedwith development. Emptu towers also are hardly a sales-booster for the region’sz fragile housing market, which has only recently seen an uptick in sales following abrutal year. “It’d a psychology question,” said Desiree regional labor economistfor Seattle-King County. “ can imagine how people will feel lookinfg around and how confident people will feel inmakinhg purchases.” The reasons for the sales slowdown are numerous.
Some prospectivee buyers are having difficulty selling their current homews to pay for theirnew homes, which rangee from $369,000 for a studio to $9.2 million for a four-bedroomk penthouse. Some potential buyers have either lost jobs or fear they Others no longer qualify for the loan they linexd up when they first agreedto buy. With housingg prices still sliding, some buyers also wonder if they might be payinygtoo much. “A lot of buyers are questioning what the real values of those unitsreally are,” said land use economisyt Matt Gardner, a principal in marketr research firm Gardner Economics LLC, basef in Seattle.
Speculators who bet that prices would risealso aren’t closing. Bellevue Towers is beingg sued by prospective buyerw who want their earnestmonety back, while some prospectiv buyers at Olive 8 are exploring legal the developer said. “Very clearly the dynamics of the economuhave changed,” said Mark Edlen, a principal at Portland-based Gerding Edlen Development, the developer of Bellevus Towers. “We’re trying to work with each individualp buyer.” The Puget Sound Business Journal used data provided by the King Count y Department of Assessments in calculating completed salesx for eachcondo project.
The records run through the first week of June and only includr sales of completed Insome cases, developers have closed on more units since then that have not yet been The Olive 8 development in downtowbn Seattle has completed 16 salesz out of 229 units since it opened in according to county data. While developer said the projectt has closed at least a dozenmore sales, that’s still half of the closings it had anticipated by this said President David Across the lake, Bellevue Towers has recorded just 29 salesa out of 534 units, according to countyy records.
The developers, who say they have sinces closed on several more saythey didn’t have a set salesa goal, but were anticipatintg “more than that.” To be developers have recently reported an uptick in buyerf interest as part of the housing market’s improvement in the last couplr of months. Two of the five projects, the Four Seasonzs and Fifteen Twenty-One, say they expecg to pay off their constructionloansa shortly. And few new projects are in the works to further floodthe market. But sales struggles illustrate the plethora of issuexs that are still affecting the residential realestate market. As a developers are pulling out a host of tools to fillemptg buildings.
Among them: — R.C. Hedreen, the developedr of Olive 8, has turned itselgf into a lender and is offering qualified potentiakl buyerssecond mortgages. That allows potential home buyerswho don’yt meet stricter condo mortgage guidelines to affords the home, said Thyer. “We’rse in a position to make those loans,” he said. Washington Square developer is also offering seconrd mortgages at interest rates matched to thefirsty mortgage. — Some developers are offering buyers who have put down earnesrt money extensions on their closing date as they work through thelendiny process, including Olive 8, Fifteen Twenty-One Secondr Avenue and Bellevue Towers.
Bellevue Towers has started a “sellerd assistance program,” available to potential buyerxs who have already put money down on a condobut can’t go through with the purchase because theif current homes won’t sell. If the buyef has to lower the price of the current Bellevue Towers will similarly lowerr the price ofthe condo, said Patrick principal of RealtyTrust. — Washington Square, perhapsd the most aggressive in itssaleas strategy, is offering outside real estate agents a 3 percen t commission on any salesa they bring to the project.
The projecty also has a lease-to-own program unded which a renter can applt up to six months of leas payments to the down payment if the rentert decides to buy the So far 52 units have been leased unde rthe program. It’s too soon to tell how many will be convertecto sales, with the majority of the leasez carrying into 2010, said Mike Nielson, the chiedf operating officer of Washington As developers wrangle with prospective buyere for sales, they also are workint with lenders.