Hundreds Position for Homeownership Resulting in High-Tech, High-Rise; 75% of 382 Units Sold
The Rubik’s Cube-like architecture of NEXUS isn’t the only thing stacked up in downtown Seattle – so are the buyers. Executives of Burrard Group, the developer of NEXUS Condominiums, confirmed they received full-price offers on 286 out of 382 units being developed at 1200 Howell Street in downtown Seattle. The public sales debut event, which began last weekend was held at the NEXUS Sales Center located at 2609 1st Avenue. Representatives from Realogics Sotheby’s International Realty (RSIR) said prospective homebuyers formed lines, hours before opening, as they positioned for preferred selection and introductory pricing that ranged from below $350,000 to more than $3 million. Several buyers took the limited opportunity to combine units valued at more than $4.5 million.
“Our success is the result of a robust economy and very limited inventory for purchase” said Christian Chan, Executive Vice President of Burrard Group. “It also demonstrated pent-up demand for unique, next-generation product that Burrard is pleased to bring to the market. Extraordinary sales results like this isn’t anything new in other West Coast markets like San Francisco and Vancouver where presales are more commonplace, but it is rare for Seattle. We are thrilled with this market endorsement as we welcome many new homeowners to Seattle’s newest vertical village in the making.”
The last time high volume condo presales occurred in downtown Seattle was more than a decade ago and at considerably lower prices. In 2005, the 260-unit project known as 2200 was substantially sold in six weeks, and nearby, the 256-unit Cosmopolitan condominium sold out even quicker, which established the previous benchmarks for sales volume.
“NEXUS has set a new record for value and velocity,” said Dean Jones, President and CEO of Realogics Sotheby’s International Realty, exclusive marketing and sales representative of NEXUS. “We’ve reached that tipping point where condos have made a comeback given that the prospects for capital appreciation are high and consumers want to lock in their future housing costs.”
Jones points to research indicating the majority of new construction presale units in the pipeline are sold until 2020. He finds total resale inventory has averaged fewer than 50 units with about a month’s worth of supply at current absorption rates. He predicts increasing demand but very limited supply in the near term given protracted permitting schedules and record-high construction costs. While more than 13,000 housing units have been built in downtown Seattle since 2011, only 6-percent of this inventory has been for sale (and all of which have been purchased). Resent resales of prior presales have averaged 18-percent higher values.
“Apartments continue to be the overwhelming preference of developers and their lenders since the Great Recession,” said Brian O’Connor of O’Connor Consulting Group, an expert in local market trends. “The success of NEXUS exposes how over-corrected the for-sale market has become and sets up the appreciation in home values that is required for new condo projects to pencil.”
To be sure, the demand for housing in downtown Seattle has never been higher led by explosive job growth by tech titans like Amazon, Facebook, Google and now Apple whom are establishing significant campuses in the city. More and more tech workers are leaving the Bay Area for Seattle, drawing the tech companies to do the same thing and visa-versa. A study by Zillow and LinkedIn confirmed what locals already know – there’s more money left after housing in the Silicon Forest(Seattle) compared to the Silicon Valley or San Francisco for that matter. According to the report,Seattle-area tech workers on average keep nearly 55-percent of their paycheck after rents whereas in the Bay Area that leaves only 35-percent. In fact, Seattle ranked #1 for disposable income among technology workers and word is getting out. Indeed.com found Seattle is the third most-searched destination for Silicon Valley tech workers. Abundant jobs, high incomes and relative affordability being the elixir.
Jay Kipp knows these trends all too well. He and his husband, Dennis, have split time between San Francisco and Seattle and can attest to the lower cost of living up north, which was partially the motivation to purchase one of the larger homes at NEXUS even though the home won’t be delivered until mid-2019.
“Real estate is about half the price in Seattle and I think growing faster than San Francisco at this point,” said Kipp, who is also a broker with Realogics Sotheby’s International Realty. “We looked at the macro trends of supply and demand but also our personal tax situation – Washington State has no income tax and being a resident of California means paying one of the highest combined tax rates in the union.”
Another common buyer profile at NEXUS were Eastside residents that simply don’t want to wait for Sound Transit 3 to complete its $50 billion+ expansion to service a growing population and unbearable commutes. It’s frustrating considering that voters failed to support the Thrust Forward proposition in 1968 and again in 1970 that would have supported 49 miles of rail service and have the Feds pay for three-quarters of the program.
Sushant Warikoo, an IBM Business Analytics & Strategy Global Business Services Partner currently lives in Issaquah Highlands with his wife and waited four hours to select his home at NEXUS on Saturday, March 18th.
“I was second in line as another group had been waiting for several hours before me,” said Warikoo. “We had to make a decision quickly as dozens of homes were selling within minutes of the doors opening.”
Warikoo and his wife returned the next day to reconfirm what they had bought and were satisfied they made the right choice.
Approximately 95 homes remain available priced from the low $800,000s, although Jones admits not all offers will result in presales so additional inventory could become available. Presales require a 5-percent earnest money deposit upon purchase with a second 5-percent deposit increase due before June 30, 2018. Final funds are due with closing, which is scheduled for Q3-2019.
Despite the demand and the requests, Burrard did not entertain multiple offers on homes. This RSIR sales team adopted a “one buyer, one unit, one price, one sale” policy, which helped serve eager homebuyers in the order of their arrival. This practice is uncommon in a market where popular price points can escalate much higher than the original asking price.
“I encourage anyone that would like to make a home at NEXUS to visit our Sales Center and explore their opportunity,” adds Jones. “If the desired home plan and price point is not available, we are managing a waiting list and working very diligently to assist prospective buyers in being successful at NEXUS.”
The following images showcase the NEXUS Sales Center and model home:
