Tacoma condo price reductions may lead to stabilization

For those of you familiar with the Tacoma real estate market, you know that our supply of downtown condos has outstripped demand for several years now. That's a nice way of saying we still have a lot of vacant and unsold condos on the market. Many downtown condo buildings are struggling, it’s no secret.

While I won’t be painting a rosy picture of the overall market, the intention of this entry is not to further pile on to an already depressed condo market. You won't find total inventory levels, days on market or absorption rates in this quick entry. If you are interested in buying a condo in Tacoma, I'll gladly share the good, the bad and the ugly with you at your buyer consultation.

I'd like to point out some signs that the condo market in Tacoma is finally reaching pricing levels that may support some stabilization. While this is potentially good news for condo buyers, the news does not help current owners in the short term.

While showing units to a client recently, I found what I felt were some real nice values. Over the past couple of years, that’s not something I’ve seen very often in this market. While searching for units under $120,000, I found 9 units priced under $100,000. We toured several of them and found most to be in very good condition. Some even had good to fair views of the water!

To me, this pricing level more accurately fits the average person who contacts me about buying a Tacoma condo. Most are not necessarily looking for a luxury in city condo, but are looking for a reasonably priced, convenient and safe place to live. With association fees and taxes on some units stretching to well over $400.00 per month, monthly payments have been too high for these types of buyers

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9 units under $100,000 isn’t exactly evidence of a roaring comeback, but we are going to need these prices to attract people seeking basic affordable housing in the city. Tacoma just isn’t the type of city that will currently support the amount of “luxury” condos on the market.

The buildings lacking amenities, tax abatements and parking will need to adjust their pricing low enough that in city renters will consider buying instead of renting. The only way to accomplish that is to price the condos at the same or slightly higher monthly payments as rentals.

There’s more pain to come in the Tacoma condo market, but if you are diligent, there are some nice values to be had.