5th and Madison’s expansive windows create an open space, provide ample light and offer sweeping views of the city.
Real Estate
Up in Value
Finding a property that has future selling power can be daunting in a buyers’ market, but these tips on location, universal design, green-living and upkeep will have you looking at a great return on your investment


Each home in the forthcoming Olive 8 property features soaring ceilings, hardwood floors, an Italian-designed Pedini kitchen system, stone slab counter tops and an energy-efficient air and water system.


The 39-story glass tower is clad in a sheet of clear, blue-tinted glazing, allowing for striking views of the property from the street and neighboring buildings. Olive 8 is seeking LEED silver certification.


 
 

It may be that there’s a perfect storm brewing in Seattle’s condo market. Yes, like much of the country, the Puget Sound region is facing a buyers’ market, but for the first time ever, Seattle’s downtown is becoming dense with urban population. The value of being near the office, near the theater and near shopping is gaining appeal. And increased gas prices are pushing more buyers to consider properties in the urban core or in locations that offer easy access to transportation.

Condos also seem to be appreciating at least as quickly as single-family homes. Condo prices in the city of Seattle in June 2008 averaged $401,000, up from $351,000 in June 2007, while the average single-family home price increased from $570,000 to $592,000, according to Matthew Gardner, principal of Gardner Johnson, a Seattle real estate and land-use economics firm.

Finding a property that will be marketable and desirable three years down the road has real merit. So how do buyers identify a condo that will hold its value—or even appreciate?

Location, Location (and a View)
According to realtors and experts in the region, the most important factor that influences a property’s value may be location.

“If I’m looking for a condo, I’m going to try to anticipate where the growth is going to take place over the next decade,” says Bill Donahoe, co-president of the real estate marketing company Solutions Partners NW/ Windermere.

Right now, those locations appear to be near public transportation, transit centers and the urban core. “In an environment of increasingly expensive transportation, condos that are near transportation corridors should appreciate in value simply because of the convenience they provide for a great swath of the market,” Donahoe says.

ArtHaus
Eden Development’s north Capitol Hill ArtHaus project is an interesting blend of historic rehab and new concept. The developer not only restored the nine units in this 1927 art deco structure but also brought them up to current codes—and to 3-Star Built Green remodel standards. And the condominium building is also an art gallery.

The building’s 2,500 square feet of exhibition space in common areas can be used for entertaining, hosting private parties and screening movies from the building’s film collection. The homeowners will collectively own 30 art pieces as part of their condo purchases, and once a year the homeowners association will buy a new work for the collection, using a portion of owners’ monthly dues set aside for that purpose. Most of the current collected works are by Seattle-area artists, including photographs by Yoram Bernet, multimedia works by Diana Falchuck and paintings and sketches by Jim Stoccardo.

To further promote local artists—and solidify ArtHaus’ position as an artist-friendly property—the building exhibited work by six Seattle artists in available condo units during 2Tue: Capitol Hill Art Walk, an event held on the second Tuesday of every month at neighborhood shops and galleries.

Homes feature restored oak floors, solid mahogany cabinetry, Italian ceramic tile floors in baths and kitchens, refinished original tubs, mostly new plumbing and energy-efficient windows and toilets. Landscaping is low-maintenance, and the outdoor common area consists of a patio with a barbecue area, commercial heaters, sculptures and a fountain.

Prices range from the low-$200,000s for a 414-square-foot studio to $699,000 for the 1,300-square-foot two-bedroom penthouse with a one-car garage. The developers are offering an artist’s discount for buyers who make their living in the arts. Two of the building’s nine units had sold at press time. —Eric Livingston

That’s true for the Eastside too.

“Condos in close proximity to Microsoft or other high job-growth companies should fare well,” says Jim Reppond, associate broker with Coldwell Banker Bain Associates. “And properties near planned developments or mass transit hubs are also a good bet.”

Reppond recommends researching an area’s projected growth trends—for example, how population is expected to grow in the next 10 years, and where developments such as shopping centers, businesses or churches are being planned—as these are good indicators of possible future appreciation.

Within a building, location also matters. A ground-level unit may have a lower value, especially if it’s perceived to be less securable, while corner and top-floor units are among the most desirable.

“Typically, the higher you are in the building, the better,” says Jon Hunter, associate broker with John L. Scott. “The price of the home tends to increase from $3,000 to $15,000 per floor.”

Of course, no matter where you live, a unit with a view is always more desirable.

Services Galore
“Amenities are the reason most people choose to buy a condo,” says Olga Dyckman, community sales manager for 5th and Madison Condominiums. Living within a community allows you to get amenities—a swimming pool, for example—you might not be able to afford in a single-family home.

These days, many amenities are hotel-related. A spate of new properties, such as the forthcoming Olive 8 and Bellevue’s One Lincoln Tower, incorporate a hotel (and its attendant services) in the condo property, and residents reap the benefits. Without going outside, they have access to conveniences such as dry cleaning and a concierge.

Dream Designs
While it’s important to find a condo that fits your style, buying one that appeals to a broad range of tastes is important for future marketability. A modernist condo with abrupt lines and cool colors may be the rage in New York City, for example, but in Seattle the warmer, more inviting properties tend to appeal to more buyers, says Leslie Williams, president and CEO of Williams Marketing.

So a buyer has to ask: Does the design fit my lifestyle, and how typical am I in comparison to other (future) buyers? Am I buying an anomaly—something that’s quirky and fun for me but that might not have an appeal to the wider market? The condo that’s alluring to the largest group of buyers will have the better appreciation rate.

Some of the design elements that seem to attract just about everyone are centered around light and spaciousness. Floor-to-ceiling windows—such as those in Moser Lofts and 5th and Madison—increase light flow and make the space feel bigger, Dyckman says, and that makes the property enticing.

When It’s Easy, Be Green
Those who can afford to buy anywhere are increasingly drawn to more sustainable developments, whether because they want to give back to the environment or because it reflects their values. Not only do these buyers get the moral benefits, they’re getting a bottom-line benefit too. Over time, the energy savings add up. A recent study from the New Building Institute shows that average energy use in Leadership in Energy and Environmental Design (LEED) buildings is 25 to 30 percent better than the national average—savings that can be passed on to owners. Olive 8, which is seeking LEED silver certification, expects residents to see water bills 32 percent lower than the norm and energy bills 10 percent lower.

The value of a “green” condo is only likely to increase, too. According to a CoStar study, buildings certified as Energy Star sell for an average of $61 per square foot more than their peers, while LEED-certified buildings get about $171 more per square foot.

“When you look at two condos side by side, the one in a ‘green’ building will be more marketable,” Williams says. That means owners will likely get more for their green condo when it comes time to sell.

Upkeep Keeps Values Up
“No matter which location or market you’re trying to appeal to, there’s nothing as appealing as [a condo that is] clean and crisp, well-cared for and thoughtfully maintained,” Donahoe says. “That’s why in the same location you can have three condos sitting in a row, and the one that puts that care and maintenance number one will always appreciate better than its neighbors.”

The value of building maintenance goes well beyond the surface. It’s vital for buyers to evaluate the homeowners association budget to make sure it’s adequately funded and that there’s a long-term reserve for maintenance and repairs. Analyzing, for example, whether the property has the reserves to pay for a new roof when needed could tell you how well owners and managers have thought out the maintenance plan and help you avoid future assessments.

“If it’s an extremely well put-together budget and reserve analysis, then you have a reasonable assurance that the people who [developed] the condominium, and the property managers who are typically responsible for the maintenance, are insightful enough to know that maintenance is a key issue,” Donahoe says.

Luck + Wisdom = Value
In the end, finding a condo that has the possibility of appreciating is one part luck, one part planning. Ideally, you want to choose a property that fits your lifestyle and someone else’s. Hopefully, it will also be on a top floor, near transportation hubs and with a sweeping view. For an incredibly low price, naturally. 
  
Seattle-based freelancer Julie H. Case writes regularly about food and wine, travel, technology and real estate. She is also currently the writer-in-residence at Interlochen Arts Academy.