Earlier this afternoon, about 300 people packed into a subterranean room of the Grand Hyatt on 7th Avenue and Pine Street, clamoring to bid on discount condos. First on the auction block was a 900 square-foot two-bedroom condo, which had entered the market listed at $437,450 when the Press Condos completed its second building a couple years ago. But it still hadn’t sold. Today the opening bid began at only $225,000—just over half its listed price.
“This is the new normal,” says Rhett Winchell, president of Beverly Hills-based Kennedy Wilson Auction Group, which was auctioning 15 units of the Capitol Hill Press Condos today. The company held 30 auctions nationwide this year and Winchell expects more in Seattle next year. “Auctions obviously do grow in popularity when the economy slows because builders need a way to sell property quickly,” says the pinstripe-suited Winchell.
Before the circus began, I made the rounds to hear from prospective buyers. The crowd was mostly a mix folks in their 20s who attended with their parents, and folks in their 30s and 40s who attended with their real-estate agents.
“I love Capitol Hill even though I’m not a hipster,” said 21-year-old Yaprak Erkul, wearing a red and white hound’s-tooth coat and chunky Gabbana glasses. She's been looking for a condo for about three months, she said, with her father sitting to her right.
Mike Norman, a CPA who lives in Bremerton and works downtown, has been searching for a condo in the city for two years. “I gave up last year because the prices got so ridiculously high,” he said. He eyed a two-bedroom unit with a courtyard, but he wasn’t going to pay more than $300,000. It ended up going for about $350,000. “I was shocked to see it went for so much,” he said.
On average, the 15 condos in the Press buildings auctioned for about 80 percent of their listing price and over 30 percent of their starting bid.
“It’s still a deal,” said Mary Granen, a real-estate agent who joined a 34-year-old male client, an artist for a computer gaming company. Comparable units on Capitol Hill are selling for “probably another 10 [thousand dollars],” she said.
So what do residents of the Press Condos think about discounts in their building? “I think a two-bedroom going for that price could upset people who wanted a two-bedroom and instead got a one-bedroom for that price,” says Brian Fornelius, who bought and shares a one-bedroom condo at Press with Garit Reuble.
Another condo auction last month suggests this a trend in the Seattle condo market. But it’s hard to say if the phenomenon is spurred by unsellable units or driven by the auction industry. While developers benefit from selling property quickly—avoiding accruing mortgages and taxes—companies like Kennedy Wilson, which fly their staff around the country, seem to be seeding the market. “Most auction companies are going after the builders,” Winchell said.