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There are some advantages when looking at condos in Seattle in the current sellers’ real estate market. Condo inventory is slightly better than single residential homes, and condos also stay on the market longer. Condos are selling at or only a little over the asking price, meaning there aren’t massive bidding wars.
Citywide, Seattle’s condo median sales price rose 3% year-over-year in January 2024, hitting $537,500, 10.3% higher than the same time last year. There were 268 new Seattle condo listings in January, reflecting a one-year increase of 34.7%.
Queen Anne and West Seattle are both down 5.4% to 0.5%, respectively, but other neighborhoods have enough inventory to keep the overall supply rate even at 2.1 months.
Construction costs, strict zoning, and bylaws keep new build growth in Seattle to a minimum, and it’s been a seller’s market almost unceasingly for the past decade. Condo owners tend to hang on to their investments, seeing how the appreciation rate has been highly favorable.
Higher prices are expected to deter some buyers from the market, which can mean it’s easier to find a Seattle condo later this year, though lower mortgage rates might help. With the sale price just over half what you’d pay for a single-family residential home, a condo for family living may be a more palatable option.
Are you wondering about the differences between buying a house or a condominium? Condo loans usually require a minimum of 10% for the down payment, which is much higher than the minimum of 3% for single-family residential homes with certain loan types.
That said, you can buy a condo more cheaply, meaning the 10% down won’t be as steep as if you were purchasing a detached single-family home. This is something to consider.
You’ll also pay a higher Interest rate on a condo mortgage than you’d be offered on a single-family home. The better your credit and the higher your down payment, the better your interest rate will likely be.
Homeowners Association (HOA) dues will be counted as part of your monthly mortgage payment. These dues are always included in your debt-to-income (DTI) ratio calculations for condo purchases, which can affect the maximum amount a lender will give you to buy a condo.
A condo is only eligible for financing backed by a government entity like the Federal Housing Association (FHA) or the Department of Veterans Affairs (VA) if it is warrantable. Loans that Fannie Mae or Freddie Mac will purchase also require that buyers select condos that meet specifications that one or both of these organizations have laid out.
If you are looking into an FHA condo loan, you can easily find and use this list of warrantable condos published by The Department of Housing and Urban Development (HUD). For Fannie and Freddie loans, there is no published list. Still, you can tell your real estate agent to restrict condo showings to warrantable units only so you save your time on an unwarrantable condo.
For a condo to be warrantable, no more than 20% to 25% of the total number of units in the project can be owned by any person or entity (unless it’s only a 2-4 unit property, in which case this can be waived.)
Warrantable condos include detached units that don’t share walls with other teams but remain part of a condo development. Owner occupancy must apply to at least 50% of all units. A condo cannot be owned by more than one person per unit (no timeshares), and it can’t be included in a houseboat project. If the condo development has any commercial space, it can be at most 35% of the building’s square footage.
A reserve account must be set up to hold a minimum of 10% of the annual budget for project protection. Units in arrears 60 days or more with association dues can’t add up to 15% or more of the total, and there can’t be any legal issues with the condo or HOA at the time of purchase.
Now you know everything there is to be known about current Seattle condo prices, home financing options and challenges, and where to get started with your condo search. You’re ready to apply for a condo mortgage and begin your journey to home ownership in a high-rise.
At Sammamish, we believe educating homeowners is the best path forward to financial success. That’s why we put so much effort into our blog articles, to help create a resource for homeowners and homebuyers. Whether you’re looking for a condo mortgage or planning on becoming a real estate investment buyer, we can help.
Sammamish Mortgage has been in business since 1992, and has assisted many home buyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon and Washington.
Contact us if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.