There is a robust level of construction activity in the urban core these days and so far it shows no signs of slowing down. Much of the residential construction is focused on high density apartments rather than adding to our tight supply of urban condos. As of this morning, there are no active listings for condos in the Downtown area. Not one! They are all pending sale or sold. We need more units for homeowners. Of course the Kirkland Tower will be complete sometime Q4 this year or Q1 next. That will only bring 40 units to bear and those are going to be rather pricey. Something along the lines of Parkview would be amazing for Downtown and maybe even the waterfront.
I mentioned in the title there is plenty of money. Well my friends there is plenty of investment cash in play right now. Much more today than two weeks ago. Investors, spooked by the Corona Virus last week and further exasperated by an oil war between the Saudis and Russia, have liquidated nearly 18% of the stock market since the first of the month. With a nationwide market capitalization at the end of February being around $38 TRILLION, this past 6 days produced about $6.5 trillion in invest-able assets. Stock market losses are caused by a sell off, that means stock investors CASHED OUT of stocks and that money is sitting around waiting to be reinvested elsewhere. Investors detest idle cash. Real Estate has often been the beneficiary of the market sell off scenario. Local developers should be on the phone calling every capital improvement financier in the Rolodex. ‘Thar be money to be lent’ if you’ll pardon the pirate parlance, developers ought to be pillaging that fresh cash.
Gramor has plans for an 80 unit, 14 story condominium tower on block 16 at the waterfront but this project is just a plan at the moment and no pre-app submittal has appeared at city hall yet. These will likely be spendy as well, since the tower will be right on the water.
Even higher end condo units in the city center tend to move quickly. There is a strong demand for the sustainable and walk-able lifestyle that is available in urban cores areas like Portland’s Pearl District and Vancouver’s Downtown.
What if Summit Development could have a wing of condominiums in the Timberhouse project slated for block 3? That project will be off the water and have some partially blocked views due to the size and scale of the Kirkland Tower and Indigo Hotel buildings. That means there is room for some affordable units on the lower levels.
Vancouver’s new Waterfront Gateway district nestled between City Hall and the Waterfront could also be a candidate for owner occupied properties. Builders should consider getting ahead of the curve on millennial buyers. That generation was a little late to the housing market eschewing ownership responsibilities for the flexibility of rentals. But now that the economy has seen some muscle flexing and millennials are reaching the “stable years” they are flocking to real estate in larger numbers. Many of them still like the urban lifestyle, but now they want to own that lifestyle.
Vancouver USA is much tighter on mid-rise and high-rise condo inventory than Portland. The Pearl District currently has 102 active condo listings in the MLS ranging from a 527 SF studio unit at $215k to a 2700 SF 21st floor penthouse unit listed at $3.2 million. They have had 20 closings in the last 30 days along with 27 current pending transactions so the market is healthy but not real tight.
Vancouver’s Esther Short neighborhood which encompasses the entire Downtown and the new Waterfront has ZERO active listings, 3 pending sales, and 2 closed in the last 30 days. But those little numbers are due to a lack of inventory not low demand.
So let’s get cracking local developers, and grab that idle cash before someone else does!