Too many apartments and condos built in the wrong areas. It's a housing bubble. (Seattle: 2015, apartment complexes)

[KonaldDuth]

Tens of thousands of new expensive studios and condos in the South Lake Union area. Amazon employees can walk to work, can go to the gym at the Pro Sports club, go bar hopping in Belltown, live the urban life centered around work. You think that won't get old soon? Everyone is going to evacuate that concrete jungle and move to the neighborhoods outside of downtown. The only thing sustaining it will be Amazon bringing in a new batch of employees who want to live by work. It's hard to believe that will continue to for long given that Amazon itself is a bubble (no profits for decades).


Mark my words: You will see studios in SLU going for $500/month in a couple of years. And the condos will be selling for $100k, possibly less.

[GatsbyGatz]

Nostradamus has spoken. And apparently he's a NIMBY.

[evilcart]

Originally Posted by KonaldDuth

Tens of thousands of new expensive studios and condos in the South Lake Union area. Amazon employees can walk to work, can go to the gym at the Pro Sports club, go bar hopping in Belltown, live the urban life centered around work. You think that won't get old soon? Everyone is going to evacuate that concrete jungle and move to the neighborhoods outside of downtown. The only thing sustaining it will be Amazon bringing in a new batch of employees who want to live by work. It's hard to believe that will continue to for long given that Amazon itself is a bubble (no profits for decades).


Mark my words: You will see studios in SLU going for $500/month in a couple of years. And the condos will be selling for $100k, possibly less.

Sorry mate, turns out it does not "get old", folks love the "work life" stuff. Amazon , google, MSFT employees are almost all over achievers that put career and work to the front of their lives.

Over the last 30 years I have watched the amelioration of domestic , education and work life. For many of these folk, work is almost an extension of university life. Living high end urban lifestyle is exactly what they want.

Access to excellent education for their kids is the only thing pushing them out, and many just choose to pay for school instead.


having said that I do also believe we have a bubble ref housing inflation... the current rates of growth are mathematical unsupportable long term.

It will be very interesting to see what happens when growth slows or reverses. Will investors run for the hills or will they stay for the long haul. In particular will the foreign buyers make a hasty exit...

[KonaldDuth]

Originally Posted by evilcart

Sorry mate, turns out it does not "get old", folks love the "work life" stuff. Amazon , google, MSFT employees are almost all over achievers that put career and work to the front of their lives.

MSFT is in Redmond and Bellevue. It's workers commute in from all over the Seattle area (The Connector goes to and from Issaquah, Belltown, Laurelhurst, Greenlake, Snoqalmie -- everywhere). It's not a young company. A large chunk of its workforce has families and lives in houses.

Google is in Fremont and Kirkland. Good residential areas.

[CityWok]

Google is moving their Fremont office to SLU:
http://www.bizjournals.com/seattle/b...outh-lake.html

Other tech companies like Expedia are moving from places like Bellevue to around that area:
Expedia confirms Seattle move, will buy Amgen campus for $229M, relocate from Bellevue by 2018 - GeekWire

Microsoft is not just in Redmond/Bellevue. They also have offices in Westlake and other places throughout Seattle.

[mhays25]

Condos? What condos have been built lately in SLU? There were some in the last boom, but none in this boom so far. The closest would be Insignia in Belltown.

Living near work is fantastic. Life is easy. Eventually you might have kids and get something bigger but that will be a tradeoff. Some people move out, but with greater Downtown growing jobs by leaps and bounds, others will move in. If the aging of today's millennials is a concern, that's ok too, because today's younger people will take their place.

[drshang]

A few interesting things to consider:

Yes, downtown and SLU apartments are being overbuilt. Eventually current tech employees will "age" and have families and desire more space. To a degree they will be replaced with fresh college grads but not likely to the point to match up with supply. One major problem is many of the new apartment complexes have 75-85% 1br places in their plans, so it really does not account for changing lifestyles at all.

One example is Los Angeles - which had lots of speculation in downtown with condos targeted at yuppies - and the market had a complete meltdown in 2008-2010. What happened was many condo projects turned into rentals and rents plummeted. Who moved in? Artists, creative types, people who crave the urban lifestyle but never had the budget for an 800k condo. The neighborhood became diverse and balanced.

In my opinion, if things completely meltdown in Seattle RE, a similar dynamic will happen. Plenty of people would love to live an urban lifestyle that don't work in tech, and if a more diverse community of people lived there, a more diverse set of businesses would pop up and the neighborhood will become more vibrant as a result. If living in SLU/Denny Triangle came at a discount to living in more peripheral neighborhoods in the city, plenty of non-tech employees would happily live there.

A crash will not happen in SLU/Denny Triangle in a vacuum. No way. Those locations are extraordinarily desirable to get anywhere in the city and many of the apartments are new. The whole city could certainly have a RE crash, and those neighborhoods will follow suit. Rent prices could very well under perform those in other parts of the city, but they are already higher than most other neighborhoods so that would be more market normalization than anything.

[KonaldDuth]

Originally Posted by drshang

Those locations are extraordinarily desirable to get

Really? That area is down in a pit, not a whole lot happening there.

[Hemlock140]

When these younger workers have kids of school age they will want to go east for the schools, safety, and room. Some of the condos may become apartments. Yes, many workers will be replaced by younger ones eventually, and some will be siphoned off to work in other places like Silicone Valley, but the high demand at SLU will continue for at least another 10-15 years. People are waiting to 35 or even 40 to have kids now. By then the $100k condo prediction will not happen, the bargain basement prices then will probably be more like $800k, and a fixer house on the eastside will be 1.5 million. There is no sign of a decrease in people coming here in the near future, so prices will continue to grow at 10-15%/year.

[mhays25]

The trend can be boiled down to a much more simple equation. Maybe 2% of the metro population lives in greater Downtown Seattle, depending how you define the boundaries of each. But a FAR higher percentage want to. Even if that's 5% or 10% or 20%, it's a huge number comparatively.

Prices are an issue. Personal situations are a barrier, like waiting for the kids to move out. But the desire is there. In some cases it's about the positives (the carrot) like lifestyle, and in some it's about avoiding the negatives of living elsewhere (the stick) like commuting. But it's a huge number.

Look at the prices people are paying -- muliples of the rents and prices they'd pay in the outer fringes per square foot. That takes a lot of desire or a lot of benefits they insist on paying for.

Whether the allure is alluring to every commenter on the internet isn't the point. Obviously many people hate the idea of Downtown living. But people are streaming in at a high rate, and in the last couple decades nothing short of a major economic crisis (twice) has slowed the trend down.

It's the natural order of things in any city. People will pay a premium to live in the center of town, for the convenience, excitement, whatever.

As for Silicon Valley, at the moment the flow is coming in this direction, at a high rate, both people and companies. They've hit a price wall, and Seattle is the #1 alternative.