Urban condos see a spike in listings, will the sales follow?

I published this article on Urban Living in the 'Couv' Monday. Urban condos are a big part of my real estate marketing efforts and as such I take a special notice to market 'wind shifts'. I figured I be well to inform the readers here of what's happening Downtown.

Originally published in Urban Living in the 'Couv', July 8th, 2019, by Rod Sager 

There is no shortage of units in Vancouver's urban condo market. New ones come active each week but nearly as many go pending or close as well. This is good activity. The days on market is dragging just a bit, but it seems sellers are starting out high on price and coming back to the market over a few months. Sellers pricing the units well from the start are seeing a quick sale.

You can see a spike in listings for June that outpaced the spike in closings. I'll be watching to see if the local market can absorb these new units in a reasonable time period. I think the listing spike likely came after sellers on the fence saw good activity in the spring and decided now is the time to sell. Summertime in Downtown is a lot more exciting than winter as the festivals, concerts and other fun stuff like the Farmer's Market is a big draw. The figures above are for condos in Downtown only so this does not include areas like Columbia Shores, Tidewater, or Shorewood.

The $500,000 to $750,000 price range is the only range that seems under-represented in terms of available inventory. Recent units in Viewpoint and Frontier in that range sold relatively fast and new inventory has not filled the void. Above $750,000 has ample inventory as does the entry level units like those found at the Academy Square and Parkview projects.

The waterfront project continues to build new developments, but the only condo project actually under construction is Kirkland Tower and those will be very high-end units mostly well above $1 million. Another proposed condo building is slated for Block 16, that is also right along the water so I am presuming those will be upper end units as well. That building however is proposed to have double the number of units as Kirkland so they may be priced in a lower range, yet likely still in the $750,000 plus market. That is just my best guess there is no real published data on the Block 16 project. The other residential projects going in are all apartments thus far.

The lack of actual condos on the waterfront could certainly be helping the condo market downtown as the area continues to see economic expansion and significant improvements to enhance the living experience. The success of the various apartment buildings such as Rediviva and Riverwest, both complete and available now, could spark developers to roll the dice on condo projects along the new waterfront. These two apartment projects feature units with rents from $1,800 to $4,000 per month and there are a total of 280 units. Income required to support $3,000-$4,000 in rent is good enough to support a condo well above $500,000.

I believe the condo projects proposed and planned for the waterfront are taking a wait and see stance to monitor the success at Rediviva and Riverwest before committing to expensive condo projects.
The City of Vancouver and Gramor need to focus on bringing some high paying employers into the downtown, waterfront, and Port of Vancouver to help support more residential development, while the economy is still strong. Jobs are very important and there are plenty of companies looking to expand in and/or into our region. The waterfront project will be easy to fill with people should we add another 5,000 good paying jobs close in. Nobody save for the occasional traffic masochist, likes crossing the bridges to work.

Things are solid on the Vancouver Urban Living scene.

Landmark Condo Legislation Passed

The State of Washington recently passed a serious update to the 1989 Washington Condominium Act and subsequent law surrounding it. This new legislation takes effect on July 28 of this year. The new law or revisions to existing law depending on how you look at it, focuses on the broad legal language used in the past. It is designed to eliminate some of the frivolous suits brought against builders without destroying the basic safety net of law protecting condo owners when a project has serious flaws.

The language is the key. Prior to this new legislation, it was too easy to open suit for simple problems and now the state has used more clarifying language to identify serious issues rather than trivial ones. This new law should bode well for developers planning high-rise projects on Vancouver's amazing waterfront.

The real problem with all these stupid suits is the fact that they can take years to conclude and during that time units often become unfinancable leading to homeowners struggling to sell or refinance their units. Many condo owners over the years have been trapped during lengthy litigation. The revisions to Washington State law are intended to minimize these so that trivial suits are no longer filed against.

Let the construction begin...

Kirkland Tower is Underway

After breaking ground in June and erecting a 'coffer dam' last month, Kirkland began digging a 30 foot hole in the ground this month. Over the next several weeks the crews will pour concrete into what will ultimately be a couple of levels of underground parking and other underground infrastructure for two new buildings on the Vancouver Waterfront. A tower crane should be erected shortly thereafter to aid in the construction of this exciting property.

Rendering from Kirkland website

Kirkland Tower is a 12 story residential building that will have 40 luxury condos with 1, 2, and 3 bedroom floor plans. The tower will be erected immediately adjacent to the new Indigo Hotel which will be an 8 story open atrium structure. The Kirkland condo owners will have access to some of the hotel's amenities and that is a unique arrangement here in America's Vancouver. 

Although Kirkland Tower is far from the tallest building planned at the waterfront, it is the tallest one so far under construction. The 12 story Timberhouse project has not broken ground yet. I wrote an article a few weeks back, about the potential value opportunity to buy a condo downtown as these new condo units start coming online over the next few years. Even waterfront properties further upstream such as the units in Columbia Shores may be vacated to take up residency in the new Waterfront Project.

11th Floor View, Kirkland website

Kirkland's website has renderings and other tidbits about the development including a view shot from every floor in three directions. This view is listed as the North View from the 11th floor. This viewpoint will offer a cosmopolitan view of downtown and even Mount St. Helens.


Although I don't see a glut of condos coming so long as the economy continues to chug along at a healthy clip. New jobs and higher pay will lead to real estate mobility and that leads to the move-up market enjoying success.

Rendering from Kirkland website

The waterfront properties such as Columbia Shores has always been hard to get as there are few units right on the water. The massive Vancouver USA Waterfront will add units to the list. Those looking for both an urban experience and a waterfront experience can do it all on the new waterfront. 

Although these condos at Kirkland are likely to be very expensive, other projects in this massive $1.5 billion development will be priced a little more in reach of upper middle class earners. Condos already built in developments such as Vancouver Center, may become available and some of those units are well priced especially in Vancouver Center 3 which overlooks Esther Short Park.

Things are looking up here in America's Vancouver and the real estate market is moving with a roar, particularly with these high density projects underway. 

Waterfront Real Estate will be Hot!

The waterfront project continues is forward march into the summer opening of the first restaurants and residential units. As this amazing project adds units there could be an buy opportunity in the Esther Short and Downtown areas as some may choose to sell there and move to the waterfront. In the long run I believe the waterfront will be much larger than the sum of its parts and will elevate the whole core downtown area.

Keep an eye on units in the following key buildings downtown. There could be a brief dip over the next few years as the new units come online.

• Vancouver Center 2: Entry to mid-level condos floors 1-7
• 500 Broadway: Luxury condos floors 5-6
• Vancouver Center 3: Mid-level to luxury condos floors 8-11
• Heritage Place: Mid-level condos floors 1-4 

I do not believe there will be any kind of crisis in these well established condo buildings in downtown Vancouver, just a chance that enough owners will want to upgrade or simply move to the waterfront that a brief surplus of downtown units may create an opportunity buying window.

A great many rental units are coming online right now from the brand new Uptown and Heroes Place projects to several other high density projects recently completed in Uptown and Downtown. But there hasn't been a lot of condo development just yet. Kirkland Tower on Block 4 of the water front will offer some 40 units on floors 2-12. These will range from 1000-3000 SF and that coincides well with the units downtown that range from as little as 600 SF all the way up to larger 3500 SF units in Vancouver Center 3 at 700 Washington Street. Kirkland broke ground recently and construction will begin starting with a giant hole in the ground similar to those we saw last year for blocks 6 and 8.

The City of Vancouver is working with Gramor Development to build out the city's Block Ten into a mid-rise mixed use building with a large grocery store on the main level. Downtown Vancouver should be seeing a serious increase in its 'city buzz' with these thousands of units adding to the local resident population. Instead of a downtown that buttons up after dark with the exodus of the business community, downtown is already starting to emit a more cosmopolitan community vibe. The city is also seeking a location downtown for an elementary school to educate the children of the thousands of new residents flocking to the area.

Below is a recent drone video produced by Dean Sorenson.

Waterfront Condos Coming Soon and Coming Fast

I wrote on my 'Couv' Life blog about the first of many cranes on the Waterfront. These monolithic machines are the herald of high-rise, and the harbinger of real estate opportunity.

Vancouver's amazing waterfront project is finally starting to show more than just a bunch a fifty foot deep holes. Tower cranes mark the beginning of the rise of tall buildings and the start of some 3300 living units planned for the north shore of the Mighty Columbia River. This $1.5 billion development will be a mixed use of commercial, office, retail, public parks and residential. Over the next 5-7 years it will build out into a world class waterfront.

Many of these units will be offered with exclusive views of the river, Mt. Hood, and the downtown skyline. At first they may seem expensive but often is the case these things will soon become in tight supply. There is a very finite amount of Columbia River waterfront available on either side.

I am already anticipating the first showings as some may be available as early as next fall. Once the cranes arrive the structure goes up pretty quick.

Urban condos however are not for the feint of heart. These units can be rather spendy and the volatility factor in the urban condo market is a bit more of an ebb and tide than traditional single family homes in the 'burbs. There is a serious pent-up demand for apartments and condos as the millennial generation is much more warm to the idea of condo/apartment living than their Baby Boomer/Gen X parents were before them.

Lead Millennials are also coming into their peak earning years. Yes it's hard to believe, but those first Millennials born in the mid-eighties are now in their mid-thirties. They can afford these now, and that is a good thing because the Millennial generation is the largest generation in US history surpassing the Boomers with more than 80 million people. For the next 10-15 years the younger members will come into their peak earning years as well and that could drive a serious demand for this type of living space. Vancouver is in prime position to capitalize on this generational shift in real estate demand.

Condos ride the waves

The condo market has ridden the wild roller coaster over the last several years. This is not atypical in a market that follows an extreme adjustment like the one we had back in 2009.

Condos took a serious beat down in the 2009-2011 free fall. Locally there were two major factors. The first was the obvious market crash that the whole nation felt. But more localized was the over abundance of condos that had flooded the area, particularly in Downtown Vancouver.

There were luxury units in Vancouver Center and 500 Broadway that were fetching close to a million dollars in 2007-08 that got wiped out in the foul mood of real estate in 2010-11. Those units saw reductions in sales prices in the 60% range!

Condos were much slower to rebound and those ultra luxury high-rise units have not yet returned to the lofty price typically associated with lofty heights high above the city. But lower priced condos are seeing a surge. As single family detached and attached housing has soared, suddenly the traditional condo with the expensive HOA dues still makes financial sense for people in the entry level price ranges.

The charts provided represent the last 6 months of activity wherein we see the days on market coming way down. Note: you have to ignore average with this as the unit totals are too small and the average is heavily skewed by a couple of short sale or bank owned problem units that sat for years.

Negotiated prices on condos as recently as six months back were well under asking, then they popped up to meet the rest of the market averaging over asking, and now seem to be settling in at or near asking. I think the bump in available inventory cooled the jets a little on condos.

Anyone sitting in a mid-level to upscale condo may have a solid opportunity to sell now at top dollar. Starting next year the new waterfront will begin coming online with new buildings and an urban buzz. Part of that will be a phased in 3300 housing units which will be a mix of condos, apartments, and senior housing. This may tug on the values a bit in the middle to upper end of the condo market elsewhere in the area.

I have my eye closely on the condo market as I am most excited about the waterfront development. They are working on the cable suspended Grant Street Pier right now and several of the mid-rise and high-rise buildings are starting to go up.

All things considered, condos are back and they should start filling in as relief for the entry level buyers and practical for those seeking to down size as they approach retirement.