Issue 15
Q: I am looking forward to seeing a lot of new construction inventory...a large amount of tiny inventory! Developers in my area may be looking to Seattle's model of condoizing everything - existing houses, tearing down old houses and redeveloping lots and a lot of it is for-sale product that has been condoized. I have an interest in this and would really like to connect with more local developers so I can help them find good properties and then sell their developed product. This isn't big in my area yet, but I think it could be. I would love some suggestions so I can take advantage of this market moment. Help!
A. Love this question! You are absolutely correct, this is a moment in the market. What is happening in Seattle, King County, and in other specific areas is or will be available to cities throughout Washington State as Comprehensive Plans get adopted as per HB 1337. This means that cities, even the tiniest of cities, will have the ability to add ADUs so long as local regulations are followed (restrictions on properties with special conditions or critical areas will still apply).
Of course, you should first ascertain if there is demand for this type of product in the area. A few things to look for are:
- Learn about entry-level price point market demand. Review your MLS to determine what the demand is like for detached housing at and below the median price point. Before interest rates increased, would you determine the demand was moderate, strong, or super-hot? In the year-and-a-half since, has demand stayed moderate? Have prices fallen? Has days-on-market increased significantly?
- Learn about niche market demand. What is the difference in demand for attached multi-family or townhouse housing versus detached? How are older condo buildings faring compared to new construction? In some areas, as older buildings are grappling with significant repairs or assessments, the difference in demand for these two products can be quite pronounced.
- Learn more about the economy. How is the workforce housing job market in your area? Are companies hiring? Has employment cooled? Can companies still not find workers? Do some digging with your local Chamber of Commerce or economic development organization to get a better sense of the strength of the local economy.
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4. Learn more about the ADU and middle housing rules that are proposed for your area. I recommend putting a Google Alert for news stories about 1337, 1110, comprehensive plan, with a list of cities and your county. Also sign up to get an alert when new City and County Council meetings are scheduled. This way every time a local paper reports on an update or a new agenda packet is released, you can review it and see what is proposed. If you haven't yet attended a meeting, I strongly encourage you to start attending!
5. Get your resources together. Aside from a completed set of buildings, what does a condoized ADU need? Legal structure, survey, and paperwork, etc. Builders won't necessarily want to deal with those things, so finding a local attorney who specializes in that is key (hint hint - we have a GREAT Washington State attorney we can connect you with! - just email [email protected] ).
6. Gather examples. This is an opportunity to do some research online and find properties that is available or sold in other markets. Check supplements, look at building permit info available online, and learn as much as you can about what worked and didn't work in different markets. When possible, see these listings in-person.
These six suggestions will set you well on your way to learning about the area and discussing what is coming when the moment arises. But what should you do to prove yourself to local builders and developers?
