According to Mr. Palmer, the economy got into this mess by creating unsustainable bubbles which were created between 2002 and 2006 by over stimulation (monetary & fiscal).  As a result, the housing bubble was the first to burst.  Statistics on foreclosures were presented to support this idea, although it’s not really any new news.

• Foreclosures in 3rd Quarter ’06:  223,223
• Foreclosures in 3rd Quarter ’07:  446,726 (+100%)
• Foreclosures in 3rd Quarter ’08:  765,558 (+71%) and the highest since records began in January 2005.

In addition to the slide of home prices, the world has been affected by other factors which were identified as:

• Fannie Mae/Freddie Mac bailout on Sept. 8th
• Lehman Brothers failure  on Sept. 12th
• Merrill Lynch take-over by B of A on Sept. 15th
• AIG $85 billion rescue plan on Sept. 16th
• Washington Mutual take-over by JP Morgan on Sept 25th
• Federal Reserve rescue of commercial paper markets on Oct. 7th

Palmer also discussed how household debt has skyrocketed and personal savings have plummeted — creating a even stronger decline in consumer confidence.

Another interesting topic was the feds lowering of interest rates and how the intention of doing so is to fuel consumer confidence.  However, Palmer states that, “While lower interest rates might make us feel better — they have done little up to now to stimulate buying or lending or to restore confidence.”  Most importantly to note was that lending institutions appear to have no tolerance for risk.  The money pumped into system from the  feds appear to not being trickling down to public quite yet.  Instead, it appears that lending institutions are placing money into secure investments to shore up assets rather than take the risk at lending.  This is displayed below (notice how little return they’re willing to except rather than taking any risk at higher returns):

Early Nov. to Dec. 4, 2008 - (

But, what kind of Realtor would we be if we didn’t end with the good news?  Palmer’s prediction is that the nation will experience an 18-month recession.  Since the nation began experiencing it’s recession in December of ’07, Palmer pointed out that we’re already 12 months in with U.S. history showing an average of 13 months for previous economic troubles since 1900.  That would place an expected recovery by the 2nd or 3rd quarter of ’09.   However, since these predictions are national, Palmer communicated a more probable rebound happening sooner for Seattle based on a number of factors including our employers (Microsoft, Boeing, Expedia, Amazon, etc.) and the metropolitan area being the fourth largest export market in the nation with Japan, China, and Canada.

View Michael Palmer’s complete slide presentation.

Granted, gas is now under $2.00 a gallon, but the Times reported yesterday in another article regarding the progress of the streetcar expansion that ridership has exceeded what was expected.  By December 12th (the S.L.U.T. 1-year anniversary) the streetcar will have carried approximately 500,000 riders–80% of which .  150,000 more than what was estimated.  With that said, it begs the question of what neighbors Licata is referring to?

With downtown condo prices being the way they are (even in a “slump”), it would seem that the streetcar expansion would create more opportunity for those to live and work in the city without having to pay the downtown premium.

However, the argument from those who oppose is the lack of planning on how the $685 million streetcar project will be paid for.  Suggestions have been made that the money would come from a tax on local business’s.  The S.L.U. streetcar was paid for by nearby property owners, and there certainly is much more of a buzz in the neighborhood that was not long ago, not a neighborhood at all.

We want to know if you are for the streetcar?  Let us know what you think.

The team that made it all possible is also one of the most experienced and reputable groups of professionals anyone could ask for.

Architecture

Blaine Weber/Weber Thompson Architects – Project architect and founding principle at Weber Thompson Architects, the award-winning firm has also designed the 5-star Hotel 1000/Madison Tower on 1st Avenue, the much anticipated AVA, and one of Seattle’s most cherished condominium high-rises The Cristalla (from which Mr. Weber had lived before 1521).

Interior

Susan Marinello Interiors – Another local based firm who has an impressive portfolio designing upscale residential, commercial, hospitality projects. .Susan has also trophied her work at the Four Seasons Private Residences, The Condominiums at One Lincoln Tower, and the Hyatt Regency.

Development

Opus/Samis Land Company – Opus (one of the top ten developers in the country) worked together with William Justen (managing director of Samis) who is one of the states largest commercial landowners and has made a significant impact on Seattle’s urban development.

Enjoy this 10-second time-lapsed video of 1521′s construction:

Dean Jones photograph courtesy of Fifteen Twenty‐One Second Avenue

The 12-foot concierge desk, made from French aspen, fronts an art wall made from local reclaimed timbers. The art wall highlights the timbers’ growth rings, which symbolize the growth of the city. Project interior designer Susan Marinello of Susan Marinello Interiors said it was important to anchor the lobby with materials indigenous to the Northwest yet modern in application.

Michael Walmsley photograph courtesy of Fifteen Twenty‐One Second Avenue

Designed by Susan Marinello and manufactured by Charles Loomis Lighting of Kirkland, Wash., a 10-foot chandelier is the focal feature of the lobby. A series of 3-inch thick rings are threaded with stainless steel rods equally spaced to hold glass drops.

Michael Walmsley photograph courtesy of Fifteen Twenty‐One Second Avenue

The living room area of the lobby has 20-foot ceilings and a large stone fireplace with a wood mantel. The fire is framed by metal box with a rust patina finish that creates a contemporary touch. A Kris Cox painting above the fireplace adds bold color to the space.

Michael Walmsley photograph courtesy of Fifteen Twenty‐One Second Avenue

Overview – Penthouse Residences from Top to Bottom
Fifteen Twenty-One Second Avenue, a glass-and-steel tower with exclusive condominiums from the bottom level to the top, is Seattle’s downtown address for the confident few. Each of the 143 residences in the 440-foot tower delivers penthouse-style quality. Thanks to an innovative architectural design, almost every home offers protected views of Puget Sound, and more than half of the residences have views of both the city skyline and Puget Sound. As the first high-rise built under the city’s new downtown zoning code, which encourages development of taller, more slender buildings, Fifteen Twenty-One Second Avenue is a harbinger of Seattle’s future skyline. With more than 96 percent of the residences presold, Fifteen Twenty-One Second Avenue is one of the most successful projects of its kind on the West Coast.

Location – In the Heart of Seattle’s Historic Market District
Located next to the world-famous Pike Place Market, Fifteen Twenty-One Second Avenue is helping to reconnect the Market District with the Northwest’s most vibrant retail center, as well as Seattle’s thriving Central Business District. Downtown is home to the Nordstrom flagship store, Tiffany & Co., Barneys New York and other top-drawer stores. Nearby cultural amenities, such as Benaroya Hall, the expanded Seattle Art Museum and Qwest and Safeco fields, are just down the street. And Belltown, home to some of the city’s most sought-after boutique stores, restaurants and night clubs, is just up the street. The Market District is experiencing a renaissance as more residents move to the neighborhood.

Landmark Architecture – A Sculpture for Living
The 38-story tower is a highly functional work of architectural indulgence. Fifteen Twenty-One Second Avenue starts out narrower than most high-rises and becomes increasingly slim near the upper floors, thus allowing more daylight at the street level and better views from surrounding buildings than a traditional high-rise.

Fifteen Twenty-One Second Avenue is constructed to a Silver LEED standard, a forward-looking set of environmental and engineering practices that exceeds the standards of most other projects for protecting the environment. LEED stands for Leadership in Energy and Environmental Design, and is the nationally accepted benchmark for the design, construction and operation of high-performance, environmentally sustainable buildings.

Exclusive Condominiums – An Envelope of Glass

• The perimeter of the open living space of each home is enveloped in floor-to-ceiling glass.  Ceilings in all residences are nearly nine-and-a-half-feet tall.
• Understated elegance is the theme of the interiors, designed by Susan Marinello of Susan
  Marinello Interiors.
• Residences range from about 1,650 square feet to nearly 2,850 square feet. Each home has two
  bedrooms.
• Designed without traditional balconies, Fifteen Twenty-One Second Avenue instead incorporates
  indoor/outdoor glass rooms that feature a dynamic window system. During colder weather, the
  windows are closed, creating a solarium. On nicer days, the windows can be fully opened,
  leaving only a protective railing between the resident and the outdoors.
• The generously sized kitchens front the floor-to-ceiling glass and include Pacific Northwest crafted
  cabinetry, satin-finish granite countertops and state-of-the-art appliances.
• The main spa bath has a large walk-in shower with limestone tile walls, tile floors with radiant
  heat, a Toto air bath, a Toto contemporary dual-flush toilet and Dornbracht plumbing fixtures.
• Amenities include a porte cochère; professional concierge; residential lobby with living room;
  landscaped rooftop terraces with fireplaces, a grilling area and enclosed lounge; separate wine
  lockers; a boardroom; a workout facility; and a children’s exercise/playroom.
• Fifteen Twenty-One Second Avenue is Seattle’s first residential tower of its height with a reinforced concrete sheer core structural system, which provides the seismic structure.

Here’s a quick look at all the construction and activity happening in the neighborhood which was once fast asleep.

Rollin Street, West 8th & ENSO

2200, Whole Foods, Streetcar & West 8th

ENSO & Spaceneedle

Not here.

Forbes too is now reporting some interesting data regarding Seattle’s real estate market.  The Urban Land Insitute (nonprofit research and education organization) asked 700 professionals in the real estate industry to recognize what areas were the best to invest in for commercial space.  Seattle was recognized as being #1 despite the loss of WAMU and downsizing of Starbucks.  The article also made sure to make mention of the residential market, since it’s typically driven by increased wages and unemployment.

The best cities in which to invest are those that are considered gateways to international investment, have vital downtowns where people can forgo cars and don’t have a glut of condos or office space.

Seattle is “a diversified market, has a good base of business and is becoming a 24-hour city,” says Stephen Blank, senior resident fellow, finance, at the Urban Land Institute. “It’s going to be in a good position to come back.”

#2 – San Francisco
#3 – Washington D.C.
#4 – New York
#5 – Los Angeles

Finally, the good news that we’ve been pushing since we started blogging is making headway!  So, for those of you considering the sale of property; hang in there.  Buyers who are thinking of buying; it’s time to get in gear if you still want to take care of what is currently, “a down market.”