More on the Condo Market

There's a spread in this morning's paper about the downtown condos. According to the paper and the study they cite, only empty nesters are moving into downtown Tacoma to fill the buildings, not any young professionals.

The vast majority are "luxury condos" because it doesn't take much more investment to turn a regular condo into a "luxury" condo, which would price it above a young professional's income.

On the other hand...

I've heard that Hannah Heights sold out of their penthouse level condos well before they had sold some of their other "regular" units. The demand was for the luxury and so they converted more of their units to upscale units (this is all anecdotal evidence).

Perhaps there just isn't a market for young professionals. Possibly because there aren't a lot of young professionals in Tacoma, specifically single ones.

Remember Richard Florida and the Rise of the Creative Class? Young people are very very mobile. And I would bet a lot that those young people who have transplanted to Tacoma to work at Russell or one of our other large employers and not yet sold on wanting to stay. Because that's the only reason you would buy is if you knew you were going to stay here.

So when the Tribune writes that "pricey condominiums exclude young singles" I don't doubt it, but it begs the question: how many young singles are there actually in Tacoma? How many think they'll be here in 5 years? My hunch would be we're talking about a very small group of people.

We'd likely be better off luring young single professionals who work in Seattle and promising them an urban lifestyle, complete with Link and Sounder service to their job and good restaurants when they return.

More on Exit133.com (who points out there are a fair number of condos in the $100K and low $200K range). The inventory on condos may also keep prices low enough to get some of those young professionals in.

All in all, I agree with Exit133: I'm an optimist.