Pro-Condo Although The Area’S Condominium Market Remains Slow, There Are Signs People Are Intrigued By The Idea Of No-Maintenance, Convenient Living
CORRECTION: 2-23-2000; A6 In a story in Sunday’s Business section on condominiums, the 400 urban living units that local developer John Stone built in Seattle were apartments.
Doc Williams had a problem.
He worked long days at the car lot he owns, Frontier Auto and Truck. In the summer, when he had a few free moments, he liked to spend time on the Spokane River and Lake Roosevelt. Young and single, the last thing Williams wanted to do during his time off was home maintenance.
“The yard didn’t get mowed,” he says. “I had the tallest yard on the block.”
So, after four years of home ownership, Williams sold his house and bought a solution — a condominium at Central Park.
Five years later, Williams, 33, is happy with his condo lifestyle. For $125 a month in association fees, he doesn’t have to worry about painting or mowing.
“I have (use of) a pool and a hot tub and I don’t have to deal with a yard,” says Williams. “It’s cheaper than renting, and, after I’m done, I’ll have something I can sell.”
Young professionals like Williams who don’t have the patience for or interest in yard work and want the tax deductions associated with home ownership are just one market for condos, says Spokane Realtor Tom Crowley of Boyd-Crowley Realty, Better Homes and Gardens.
So are singles looking for an investment and a secure building, first-time home buyers who can often afford a nicer condo than house and seniors seeking a sense of community.
And empty-nesters are increasingly drawn to luxury condominiums, said local developer John Stone.
“It’s a lifestyle choice,” he said. “People may have two homes and are tired of the dog and all that, and may want to do more traveling and have more flexibility.”
Stone, who has developed condos in the Seattle area, has plans for a large, mixed-use development in Coeur d’Alene that will include single-family homes, retail shopping, commercial buildings and condominiums, but he has no plans to build condos in Spokane.
The condominium market grew dramatically in Spokane 20 years ago, but growth has remained slow since, despite double-digit condo growth in many other markets regionally and nationally.
Crowley says rapid construction in the late ‘70s and early ‘80s was a result of having few condos before then in the Spokane market. A lessening need, the failure of some projects and the growth of the planned unit development caused condo construction to taper off.
According to the Spokane Association of Realtors, just 205 condominiums were sold in Spokane in 1999. Crowley says his office has sold 78 condos here in the past 12 months.
“I’ve been selling them for almost 30 years,” he says, adding, “I love the concept because it makes our lives easier, without the pressure of all the maintenance.”
Condo maintenance is handled by an association. Fees in the Spokane area, Crowley says, average about $100 a month.
“There are associations that run themselves with a board and those with an outside manager,” says Crowley. “Often with those that are self-managed there are personality conflicts between neighbors. So the associations that have outside management cost a little bit more, but sometimes it makes the neighborhood a little friendlier.”
Houses are just as cheap
While a flood of multi-family housing is being built in King County and other fast-growing urban areas, the Spokane housing market is still overwhelmingly dominated by single-family homes. For every Spokane and Spokane County condo built in the first nine months last year, 100 building permits were issued for single-family homes.
New condo construction in Spokane starts at about $125,000-$150,000 and ranges upward, says Stone. Still, although he has built about 400 condominium units in Seattle, Stone doesn’t plan to build any in Spokane because he says the market is too small.
“Frankly,” says Stone, “you can buy a house for significantly less than that (condo price).”
Last year, the median price of a house in Spokane County was $104,000, said the Washington Center for Real Estate Research at Washington State University.
Glenn Crellin, director of the WSU center, says that means there isn’t much incentive for the average home buyer to consider a condo or for developers to build them.
“Condominiums tend to arrive in significant numbers in expensive marketplaces,” he says. “The Spokane market continues to be fairly affordable, so it doesn’t provide the reasons for building new condos or converting existing apartment complexes.”
Seattle a prime condo market
In the Seattle area, rising housing costs are contributing to a rapid expansion in condo ownership.
In King County, the median price of a home last year was $238,000. Rapid population growth, coupled with the state’s Growth Management Act, have caused land prices to skyrocket during the past 10 years and led to a construction environment favoring more dense development.
In the city of Seattle, construction of multifamily units last year outnumbered construction of single-family homes at a ratio of almost 7 to 1. There was no specific breakout, but “a lot of those are condos,” said one planning official. With a growing number of well-paid, young, hightech employees and a lively urban core, downtown housing development continues to soar. In 1999, half of Seattle’s new multi-family units were built in the downtown area.
“One of the realities is that this region has a very tough traffic situation which makes commuting far less attractive for people who work in town,” says Alan Justad, of Seattle’s Department of Design, Construction and Land Use. “At the same time, the downtown is very vital and active.’ Downtown Seattle has become so appealing, says Dennis Meier, an urban designer for Seattle’s strategic planning department, that even many workers at Eastside high-tech companies choose to live in Seattle.
“The reverse commute is as bad, and sometimes worse, than people coming into the city,” he says.
Since 1985, Seattle has made housing construction in the urban core easier for developers. Now, Meier says, builders aren’t required to provide parking, building codes have been changed to allow for up to five floors of wood-frame construction above a floor of concrete and density limits are relaxed.
A push for downtown housing
Some would also like to see downtown housing flourish in Spokane. On Monday, the Spokane City Council will consider a resolution by Councilman Steve Eugster that would exempt multi-family housing downtown from state property tax for 10 years, by taking advantage of a state initiative to encourage denser development.
If approved, the exemption would apply to buildings in the West Central, Riverside and Browne’s Addition neighborhoods with four or more housing units. It would also apply to renovations and redevelopments.
In recent years, several condominium projects have been built downtown and in Browne’s Addition.
Wells & Co. built several townhouse condos on West Riverside. Goodale Barbieri Real Estate built condos near the Spokane River and Centennial Trail at its Riverpoint Village. And R.H. Cooke & Associates built six townhouses in Browne’s Addition. Many of these higher-end condos were designed to appeal to empty-nesters.
In addition to residential condo development, recreational condominium projects are also being built around the region, including a 49-unit development at Schweitzer Mountain, called White Pine Lodge.
Schweitzer Development Co., a subsidiary of Harbor Properties and Resorts, which owns the Schweitzer Mountain Resort, will begin construction of the base area project in May.
Several other proposed condominium projects, however, have stalled, including plans for the Legion Building at Riverside and Washington and a 12-unit project at the Fuller Building near Gonzaga University.
Developer Mick McDowell is working on a 17-unit, luxury condo development near Carnegie Square. The units, which will go for about $180 per square foot, will have views of the Spokane Falls.
But Crowley says there is also a market for new, moderately priced condos that isn’t being met.
“Don’t just build the half-a-million dollar ones,’ he says.“Build a good mix that is proportional to what we sell in the way of houses. Build wonderful million-dollar penthouses, but half the way up the building build something that people can afford.”
Although, the average price paid for a Spokane condo last year was $118,800, most of those transactions were resales of units in existing complexes. Many recent projects have focused on luxury units topping $250,000.
Bringing more housing of all price levels to downtown Spokane has been a goal of Jim Kolva’s for years. A member of the downtown steering committee, Kolva built a downtown building and designed his own condo. Eventually he would like to add more housing units on the floors above a ground-floor commercial or retail tenant.
Finding money to develop such projects, however, can be difficult.
“One problem with a mixed-use project with commercial and residential is that it doesn’t meet the standard formula,” says Kolva. “Most banks sell their loans. But these types can be difficult to sell, which means a bank that makes that loan is going to hold it in its own portfolio.” That, says Kolva, raises risk for the bank.
Heidi Stanley, executive vice president at Sterling Savings, says that condo projects are evaluated carefully by the company’s subsidiaries - Action Mortgage and Intervest Mortgage Investment Co. - because the dynamics in this market are much different than those in King County and in Portland, where condo projects are numerous.
Still, Bob Cooke, owner of R.H. Cooke & Associates, says condos can be a good investment.
“Unit values have actually been going up,” says Cooke of his firm’s Ridgeview Condominiums.
One Ridgeview unit that originally sold for $131,000 was recently resold for $144,900. The success of the project, says Cooke, has prompted him to pursue another condo development in Browne’s Addition.
“There are a lot of condos in the outskirts of town,” he says.“But heck, you might as well buy a house in the suburbs.”
That suburban living is what many in this area prefer.
“Part of the reason people love Spokane is the quality of life we have here,” says Sabrina Jones, president of the Spokane Association of Realtors, “the large lots and homes with big, fenced back yards.”
In North Idaho, the house with the white picket fence also prevails over denser urban living, says Charlie Nipp, who heads Coeur d’Alene’s Urban Renewal Agency.
“Condominiums traditionally have not been successful in the North Idaho area simply because people have had the ability to have a home, a plot of ground - space - in the area,” he says.
Even so, Nipp says his agency is encouraging condos in downtown Coeur d’Alene.
“Condominiums allow living units back into the downtown area, which brings, people, foot traffic and disposable dollars,” he says, “all of which promotes a healthier downtown.”
Several downtown Coeur d’Alene condominium projects have been floated in recent years. One is moving closer to reality.
Prudential Acuff Northwest Real Estate has pre-sold one-third of its planned 22-unit condominium complex at Front and Seventh.
Units start at $349,000 and have a 270-degree view of the lake and surrounding hills.
Shawn McMahon, a partner with Prudential Acuff Northwest, says the plan is to break ground once two-thirds of the project has been pre-sold.
Coeur d’Alene Realtor Pat Krug, of Windermere Real Estate, says she gets a number of requests from people looking for condos. Seniors often seek one-level units.
“I think our market can certainly support at least two more high-density downtown condominium projects and more one-level projects throughout the area,” she says. “Many people don’t want to take care of a yard. They want to be footloose and fancy free.”
This sidebar appeared with the story: A CLOSER LOOK What is a condo?
A condominium isn’t a particular type of building, but rather a legal definition of a type of home ownership.
Essentially, condo buyers own the airspace within their unit — whether it’s an apartment, townhouse or duplex — and share in ownership of the outside of the structure and common areas with the other condo owners.