This blog is local condo discussion in Bellingham WA. Our clients and Facebook buddies have asked: Why the Drake Condominiums have done so well? How is that they are selling at 70% premium to average per foot condo prices in Bellingham? Also, Why the sudden interest and activity in the last available units and new resale's? Readers from other parts of the country likely know a few exceptional projects like the Drake in their neighborhood.
The answer is in 3 parts:
The obvious is that The Drake is an incredibly well built and nicely appointed building. Little expense was spared in its construction. In addition, it benefits from Barkley Village neighborhood. Barkley is fast becoming a premier neighborhood in Bellingham. The well thought out urban village concept is really taking off with locals.
Not so obvious, is the developer strength and planning behind the building. This allowed the units to be sold in an orderly manner even in the worst market in the last 30 years. Patience and a strong value proposition created an orderly if a little slower than expected sales process. The developer re-priced the building at completion to reflect market realities and then passed this new lower pricing on to all reservations. When was the last time you heard of somebody doing that? Those were fun calls to make. 32 units were sold between October 2008 and December 2010 along with 2 re-sales. The Drake was also very early adopter of FHA financing qualifying in June of 2009.
The result is that there has not been a single short sale in the building. There are no foreclosures and units have held their value exceptionally well. I could argue that there are no units under their purchase value in The Drake. Not that buying and selling in the short term is a profitable exercise. It's not. (primarily due to fees involved in the sale side.)
Why now? The last week has seen incredible activity at The Drake. The Drake is one of very few condos that qualify for both conventional and FHA financing, owner occupancy is around 85%. The budget is exceptional with almost $100,000 already in reserves. I think buyers have seen the writing on the wall regarding interest rates and many made the New Year resolution to get off the fence in 2011. Rates have crept up almost 75 basis points over the holidays.
Buyers are looking for value and financing and see it in The Drake. Risk aversion is a factor too. The fact that building is virtually sold out offers confidence to buyers that there is no future pressure on prices. Such as the recent fire-sale at Center Pointe Condominiums, when the developer failed.
The Drake is one of a few great newer buildings in Bellingham. We also like how Laurel Park (High Street) and The Edgewater (Fairhaven) have handled the economy. These buildings should serve as models for developers when the market improves and construction begins anew.
Best wishes for a happy and successful 2011
Doug and Lorena Foster
Foster Group Realtors
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