Is there a real estate glut in Georgetown?

Looking at listings for rentals in places like Craigslist, which is probably the best sampling tool for actual market conditions for all kinds of items, one would get the impression that there is very little space available in our fair neighborhood; at least, relative to our population of 1400, the number I see kicked around. For rental space, that is definitely true. If you are a buyer, I would say that is less true then it has been over the past couple of years.

Given the fact that I don't have a job that allows me to get paid while I screw around with excel sheets on the clock, this missive for all purposes is anecdotal. But because it is such a small market, casual observation is enough to wonder what a market analysis might bear out over the last two years using the MLS figures, the county parcel search engine, and even Zillow and RedFin. But I'll go through what is listed for now and you, the reader, can draw your own conclusions.

There are two apartment complexes on the market. One is on the corner of Carleton and Bailey (pictured above), and the other on South Bennett Street. The asking prices are 799k and 1.3m respectively.
The Carleton price works out to about $800 per month per unit (at 6%), which have not been upgraded for 20 years according to the listing. The other on S. Bennett works out to about $735 per month per studio unit. With each at a 30% down payment (you do the math) the rents would be very affordable--if these buildings were maintained as self governing coops. If a investor came along, rents would have to go up substantially unless they had a lot of capital to sink into the building long term and a lot of people would be displaced as a result.. If any cooperative housing group had capital sitting around looking for a place to go, these might be good options. I didn't figure taxes, insurance, and maintenance into the overall cost, but fix and repair for resident owners is much more cost effective then fix and repair by property management firms, who almost always have to contract the work out.

Another property on 6507 Ellis is going for 500k, and has been on the market for a few months. The seller is pushing the idea of tearing down the historical structure (built in 1900 or before) and replacing it with town homes. How well town homes are doing here might be a consideration (see below), but it invokes the idea that any piece of property with "development potential" is somehow worth more then one that is left as a single family dwelling. Thus, a conspiracy theory is born; is all of this "upzoning" the city's way of artificially propping up the local housing bubble, even in the face of declining demand? My guess is that someone has already thought of this. All local investors need is someone else to be a little to greedy and get stuck holding the bag, or someone with the cash flow to invest long term (say, ten years) when our local market catches up (down) with the rest of the country. This might be the tipping point.

When I was looking to buy my own place a couple of years ago, there were only three, maybe four single family homes on the market in Georgetown, all at 235k or higher. Today, there are at least six, on Flora and Ellis. Their prices range from 243k on up to 453k. But two years ago, there were virtually no "new" townhouses/condos, and now there are at least eight listed, ranging from275k to 435k. The amount of places in the 240k to 455k range in Georgetown alone has tripled in two years. When the price of a whole house is competitive with the price of a new, smaller, and untested condo, I'm guessing that people will opt for the house with the yard, parking, more square footage, and a little more space from the neighbors.

These condo/town homes that have been sitting on the market for months and months might do better as apartment rentals, given that it is tough to find a place to rent in Georgetown. It might depend on the amount of actual single family houses the continue to go on the market here, as we haven't even factored in coming foreclosures--there are and will be a few. But of course, any house that goes on the market as a rental will be competitive with a brand new apartment--especially as people go in on leases as groups, an old tradition in Seattle. You can't do that in a 800 square foot loft space. It will be interesting to see what happens to our little condo/townhouse market, and it may turn out that indeed, we do do picket fences.