This week The Esplanade, a new upscale condo development in downtown Tacoma, has its grand re-opening after going through the foreclosure process. The bank is now selling off it's condos at greatly reduced prices from where they were a year ago. In fact, one of my clients put in an offer on a sweet 1 bedroom. This is the first new construction or condo conversion I've sold in almost 3 years and I sell more condos than the average agent. So, I got to thinking about the condo market in Tacoma...
Three years ago there were numerous new construction and condo conversions for sale in Tacoma. One might even call it a glut of condos. Developers were asking astronomical prices for many of these condos. At least, I felt they were astronomical. They were not much less than prices I had seen in West LA before I moved up here in '06. Except, and I love/hate to say it, Tacoma is not LA. It's an awesome place to live but the circumstances that keep West LA prices so high just don't exist here. We don't have a large population of singles and couples (childless or empty nesters) earning well into the 6 figures. In LA that's very common due to the high cost of living. We also don't have an industry like Hollywood attracting talent and executives who demand staggeringly high compensation. (We don't have the bad attitudes that go with it either!) Finally, we don't have the enormous amount of foreign money found in West LA. I lived in the West LA area for 17 years, including 6 years in my Brentwood condo, and a big percentage of my neighbors were from the Middle East, Asia and South America and they had paid cash (big bucks) for their condos. When Tacoma developers started asking sky high prices for condos there just weren't enough buyers who either could or would pay the prices.
Now, combine that with a mortgage meltdown and a provision that condos developments with less than 50% owner occupancy could not qualify for FHA approval, therefore buyers couldn't get a loan, and we had almost total stagnation in the Tacoma new construction condo market.
Good news! It's warming up. A few things have happened... Some developers were able to slash prices dramatically and that allowed enough cash buyers to come in and get the condo developments FHA approved. Some condo developments went into foreclosure and are now back on the market at greatly reduced prices. But, best of all, FHA is starting to loosen up their restrictions on owner occupancy rates for new construction. Just yesterday 505 Broadway closed 5 units.
In fact, since November 1, there have been 23 total condo sales (new and existing) in the city of Tacoma.
Now if the weather would just warm up a little...
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