Downtown Condo Experts Optimistic about Local Housing Market Trends.

SEATTLE -- Local real estate experts say that Seattle remains a bargain by comparison to other major metropolitan cities, and they predict that sales momentum will increase significantly in the first quarter of 2007.

"The greater Seattle area is significantly outpacing national averages for job and income growth as well as housing appreciation," says Dean Jones, president and CEO of Realogics, a Seattle-based real estate consultancy firm. "From a national vantage point, we have the most enviable major metropolitan market in the country. 2007 is lining up to be another banner year for Seattle."

While headlines on national housing trends have been dire recently, national and local industry leaders remain confident in Seattle's real estate market. Yesterday, the Northwest Multiple Listing Service reported that the median condo value in King County increased 20.8 percent over the past 12 months despite an increase in inventory.

"Over the past year we've seen a strong increase in overall buyer traffic," says Tom Zbaren of Windermere Onsite who manages new construction presale programs. "Savvy buyers clearly understand that the market is not going from boom to bust but rather it is evolving from red hot to above average. That's a very healthy adjustment."

Seattle is the second most "bubble proof" marketplace in the country, reports MSN.com and Business 2.0 Magazine, citing strong job, income growth and constraints on supply and regional economic expansion.

The Seattle housing cycle is still playing catch up to millennium boomtowns such as San Francisco, Los Angeles and San Diego. Until very recently, Seattle hasn't experienced consecutive years of double digit appreciation. While it's true that a much-needed correction is occurring in many of these markets - experts remain bullish on Seattle and feel buyers are making smart decisions.

Increased inventory provides more choice for buyers and ensures that product differentiation occurs in new construction as developers seek competitive advantages. For example, Seattle-based developer LEXAS Companies, which is developing the luxury 30-story ESCALA condominium tower, recently closed on its $175 million construction loan, the final stage in the project's capitalization. ESCALA, which will be built at the southeast corner of Fourth Avenue and Virginia Street, will be Seattle's largest condominium development.

"The Seattle market has some built-in assurances that only the best projects with the most capable developers receive funding from what appears to be a dwindling number of construction lenders willing to lend to large condo projects," Jones said.

Projects that do get financing and break ground will enjoy limited competition despite claims that 10,000 units could be built. "It's really over announcing, not overbuilding," says Zbaren. "They won't all get built."

The national front is looking brighter. Federal Reserve Board vice chairman Donald L. Kohn recently stated the national housing market was well on its way towards bottoming out and eventually returning to positive growth in new home starts and resales.

Interest rates have also been steadily dropping and are now within a percentage point of their 40-year low and the lowest rate in half a year. While Seattle doesn't suffer from the same symptoms as other cities experiencing a market correction, it certainly can benefit from the remedy.

"It's really a brilliant time to buy new construction in Seattle," says Jeff Bell, a mortgage banker with HomeStone Mortgage, the region's largest private lender. "Our buyers are purchasing 2008 products at 2006 prices."

Other market experts agree that the fundamentals in Seattle have been and continue to be very strong:

-- The Brookings Institute recorded downtown Seattle as having the second fastest growth rate for residential population in the nation - up 67 percent from 1990 to 2000.

-- According to Conway Pedersen Economics - over 66,000 jobs have been added this year on top of 50,000 new jobs last year. This trend is expected to continue through at least 2009 with the addition of another 140,000 jobs to the Puget Sound Region.

-- Money Magazine says, "As forecasts for housing price growth have cooled for most of the country, they are calling for booming values in the state of Washington."

-- Forbes.com stated Seattle is anticipated to experience one of the highest rates of appreciation over the next decade, estimated at 59.2 percent by 2016.

-- Emerging Trends in Real Estate 2007 released by Urban Land Institute (ULI) says, "Seattle, along with New York, Washington, Los Angeles and San Francisco, were cited as the top major U.S. markets for real estate investment in all categories led by housing."

About Realogics:

Realogics is a Seattle-based real estate consultancy specializing in market research, product development, project marketing and sales management for high-rise and mixed use communities. For more information visit www.realogics.com or call Dean Jones at 206.448.5752