Friday, August 25, 2006

Is the Condo Market in Tacoma in Trouble?

Yes, I believe it is and here is why.

Inventories have tripled in the last six months. There were half as many condos sold in July then there were in both May and June. Why?

Developers are setting high prices (Seattle pricing) and are still building more units. Prium is working on three projects in a half mile radius. The median price for a 2 or 3 bed condo sold in the last six months Tacoma is $239k. The median price for a home is $234k. By the way, the median priced condo on the market right now in is $355k.

The reason why condos are attractive is because in most urban markets, Seattle for example, they are much more reasonably priced than single family homes. In Capital Hill in Seattle, the median priced house sold in the last six months is $669k compared to a 2 or 3 bed condo at $369k. That is a difference of over $300k. This is why the Seattle condo market is still hot. Since most people have a hard time entering a market at $670k, condos are much more viable an option.

This absolutely does not exist in Tacoma. Take my advice, do not buy a condo in Tacoma unless you desire that type of living and are willing to pay a premium for it. Condos in Tacoma are not a good investment.

2 comments:

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MLK said...

My husband and I purchased a 2/2 at Pacific Tower for 270k. The only homes we found were 250k re-do types. We have a fairly good income and simply couldn't afford a new home in Tacoma.