The Q3 2020 market stats are in! We are seeing active listings up substantially compared to last quarter and last year. In part, this is because many sellers held off listing during spring as COVID-19 was hitting, so some of those listings shifted into summer and fall. Another driver of increased listings is the growth of working from home, which is causing some people to seek larger living spaces outside our local downtowns, including downtown Bellevue.
Interestingly, however, sales are actually also up compared to last quarter and last year, showing that downtown living remains attractive for many buyers. On balance, however, sales are not up as much as listings and, as a result, months of inventory has risen. Generally speaking, as months of inventory rise the market becomes more favorable to buyers.
On the pricing front, average pricing is down compared to last quarter and last year, but we always need to treat the average price measure with caution because not all condos are the same size and average pricing could be going up or down simply due a change in the mix of large and small condos sold. The best measure to understand what is really going on with pricing is price per square foot, because that takes condo size out of the equation. By that measure, pricing is higher than last quarter and last year. Overall, even though we are not seeing softness in pricing, the market has become more favorable to buyers given the increasing inventory of homes to choose from.
Are there particular projects that you’re excited to see that are under construction or nearing completion?
After pre-selling well over 90% of the units 2 years ago, Bosa is putting the final touches on its One88 project located at Bellevue Way NE and NE 2nd. I got a tour recently with the listing agent and the building really turned out beautifully. While there are only a handful of developer homes remaining to sell, some of the buyers have just closed and then immediately put their homes on the market meaning that there are also some brand new resale homes available as well. Pricing at One88 represents a new high water market for downtown Bellevue, so it will be interesting to see how the available homes sell and how pricing in that building affects the rest of the downtown Bellevue condo market.
We’re hearing Seattleites are moving out of Downtown Seattle. Are you seeing any of these movers coming to Downtown Bellevue?
Yes, we are certainly seeing some of this, although to paraphrase Mark Twain, reports of the death of downtown Seattle are greatly exaggerated. I think it is great to have different urban centers in the region each with its own vibe and appeal which evolve over time. I think downtown Bellevue is enjoying an surge in interest right now because it offers urban amenities in a lower density environment and is a major hub of our tech-based economy on the Eastside which will continue to bring new workers and residents to the area over the next few years.
There’s a lot of talk about people moving out of urban centers to the suburbs. Are you seeing this trend?
This trend is real, but keep in mind that properties sit on an urban-suburban-rural spectrum on which everything is relative. So someone may move from downtown Bellevue to Issaquah because they want to move from an urban area. But for the same reason someone may make the move from Seattle to Bellevue or from Issaquah to Montana. Where people move to is at least in part driven by where they were living before. I even had another agent share a story about some buyers moving from New York to a condo in downtown Seattle because from their perspective Seattle was a low-density destination to which to move.
How is “Work From Home” playing a role in how buyers are shopping for homes?
I truly believe that trends in residential real estate right now are not being driven by COVID-19 itself anymore, but by the reaction to COVID-19. What I mean by that is that initially people were making decisions about housing based on a fear of dying from the pandemic. But now people are making decisions based on how they are living with the pandemic, with working from home being the single biggest change (along with remote learning for kids). Primarily, the decisions are being made along two dimensions: size and location. First, people suddenly want more room. How many more bedrooms do you need when you may have multiple family members needing a quiet place to make a zoom call? Not to mention maybe wanting a home gym or theater. And then a bigger yard because kids are no longer going to school or a local park. Second, people suddenly can work from anywhere because they are no longer restricted to living within a reasonable driving distance of their office. Why not move to some pretty spot in Snohomish or Pierce counties if you don’t need to commute? Or why not Hawaii or Montana for that matter? Having said all of that, as with many trends this one won’t move in a straight line. There will be some snapback as people realize that Montana was fun for a while but the tug of location will draw people back as they miss friends and family in-person schooling and working from the office restart. Not to mention that you will see company policies changing like at Microsoft where you may have the option to work remotely from another geographic location, but your compensation will be adjusted accordingly. Working from a resort starts to sound less interesting if it comes with a pay cut.
Is it a good time to buy or sell a condo in Downtown Bellevue?
I have to get a little philosophical here because people think real estate agents just say that now is the best time ever to buy and sell no matter what is happening in the market… The reality is that the right time to buy or sell should be determined primarily by the needs and wants of the buyer and seller. If a move is prompted by a new job, retirement or changing family situation (new baby, kids off to college, etc.), then anytime it might be the right time to buy or sell a home. Of course, timing may be influenced by market factors like interest rates or lack of inventory, but just like with other investments, timing the real estate market is hard. It’s really always best to make a move when it makes sense for your life, and then fine tune based on market conditions. The same applies to condos in downtown Bellevue. Taking the slower fall market together with the impact of the pandemic, the market right now is probably a little more seller-favorable than it otherwise would be. Interest rates are low, but pricing is still up year on year. So I think it really just comes down to does a purchase or a sale of a condo in downtown Bellevue fit your larger life plans right now.
Do you have a favorite property that you are selling/showing?
Well, I am biased of course, but I think the Bellevue Towers Penthouse 4106 is pretty amazing. It’s a great floor plan for entertaining with a huge great room and formal dining room. The lighting, shades and audio can all be controlled with the touch of a button. And most importantly the views are simply amazing. Mt. Rainier, Lake Washington, downtown Bellevue and Seattle. And if you are thinking about making the move downtown but worry about parking, the penthouse comes with four (count ‘em, four!) parking spaces.
What is the average time on market for a Downtown Bellevue condo right now?
31 days, which is actually down a little bit from last year at this time.