Seattle Courant

Brix Condos Go Up, Housing Market Goes Down

By Kristen McTighe
February 1, 2009 05:02PM

"Financing is getting a little sticky now if you don't have enough sold, but we're within the limit," said Javila Schelhorn, associate broker and buyer agent at Brix. "We made it with a little buffer - not a huge buffer - but we made it."

The Brix grand opening comes amid Tuesday's report by Standard and Poor's showing that home values continue to fall. For the third consecutive month, Seattle was among the top 20 cities to post declining housing prices. This drop marks the tenth consecutive record annual drop since the credit rating agency began tracking this 1990.

The report said the city's home values are at the lowest since January 2006, and that the price of a standard house in King County was down 11.2 percent in November from a year ago. In October alone, home values fell another 2.5 percent.

"The free-fall in residential real estate continued through November 2008," according to a press release on Tuesday by Standard and Poor's. "Since August 2006, the 10-City and 20-City Composites have declined every month."

A recent report from Northwest Multiple Listing Service also shows a drop in home prices. According to the report, the average price per home in King County is $403,500, down 7.2 percent from a year ago.

Schelhorn started selling Brix condos two years ago. At the time the condos were selling for $300,000 and change for a low-end unit, and the high-end condos were going for around $750,000. But despite the decline in the Seattle market, Schelhorn said the Brix prices have not gone down.

"Many of our pre-sale buyers got great deals, and some of our pricing hasn't changed at all," she said.

And with construction now finished and pre-sale buyers moving in, Schelhorn said sales have continued, with five units sold in January.

"I was pleasantly surprised. It's very different when you can come in and see the home instead of buying off a marketing plan," she said.

The Brix complex, which sits atop street-level retails stores where the old Safeway used to be, offers both contemporary style units with tones of steel and warmer woodsy style units accented with timber beams. The building is one of a group of new developments on Capitol Hill in recent years. However, according to Schelhorn, the current market woes has brought a halt to more construction, not only on Capitol Hill, but all over the city.

"There is a lot of new development, but not a lot starting. What you see now is all there will be," she said.

According to Schelhorn, construction prices increased dramatically, making building difficult for price-point condos, and only those selling for higher price per square foot were able to build. But she said that land prices have remained high, so she doesn't expect these prices to lower.

Still, she doesn't deny the fact that sales are slow, and admits that there have been some difficult closings, particularly with pre-sale buyers.

"People buy with a certain loan program in mind, and loan programs have changed significantly. Some people are holding off and hoping that those products will come back, and some people have left, forfeiting their money," Schelhorn said, referring to the deposit required for the ability to purchase early. If the buyer decides to pull out, or can't secure financing, the deposit is lost.

But Schelhorn remains hopeful. There are people out there with money to buy a condo, she said they "just have to qualify, which is great." Adding that, "It should have been like that all along."