Some posh Bellingham condos sell amid downturn

JOHN STARK - THE BELLINGHAM HERALD

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BELLINGHAM - In 2008, Jackie Marcucci paid $1.5 million for one of four top-floor condos in Fairhaven's Waldron Building, a long-vacant red brick landmark refurbished by developer David Ebenal.

The condo slump was already under way in 2008, and by some measures it has only gotten worse since then. The other three high-end units in the Waldron Building are still on the market. But Marcucci doesn't have any regrets.

"The Waldron, of course, is a landmark building, beautifully put together," Marcucci said. "It's just spectacular. Living in downtown Fairhaven is a gift in itself. I have no remorse whatsoever."

Marcucci has another home in Marin County, Calif. From her perspective, Bellingham view condos like hers are reasonably priced, although she remembers mingling with local condo shoppers at open houses and hearing them express astonishment at prices above $1 million.

Marcucci said she condo-shopped for three years before deciding on the Waldron unit. She passed on pricey units on Semiahmoo Spit because they were too far from the nearest supermarket. The Park Place condos north of Fairhaven had a modern approach to interior design that she found sterile and unappealing.

Realtor Lynda Hinton said Marcucci's purchase demonstrates that even in a tough market, some upper-end condos can still find buyers. Park Place condos recently went through a bank foreclosure, and Hinton expresses optimism about their marketability once the interiors are remodeled to make them feel warmer.

Damian Pro and Don Pro of Windermere Real Estate are the listing agents for Park Place condos overlooking Boulevard Park. An earlier version of this story contained incorrect information.

She's also offering the 16-unit Edgewater project, now nearing completion just north of Park Place, with prices ranging from $950,000 to $1.35 million.

Although the deals haven't closed yet, Hinton says she has "committed buyers" for four of the Edgewater units, and those buyers are putting in money up front for custom features as the units are completed. "Sale pending" banners hang from the balconies of those units, sending a clear message to the Boulevard Park strollers below.

She acknowledges that Park Place and some other condo projects have had serious problems. Some already-built projects like Park Place have gone through foreclosure, and foreclosure sales are scheduled at others. Also in foreclosure are real estate parcels once envisioned for condo projects like the Bay View Tower in the 1200 block of North State Street.

But as Hinton sees it, the glass is half full.

"The successful projects have the location and the quality behind them," she said.

While three of the four top-priced Waldron units are still available, Hinton says she sees renewed interest in them, and cheaper units in the same Waldron-Young retail-and-condo project have already found occupants.

Realtor Jo Anne Wyatt acknowledges that market conditions have spooked many would-be buyers. Many condos were built to appeal to aging baby-boomers looking for condo convenience, but many empty-nesters are hanging onto those four-bedroom nests right now, hoping their selling prices will rise.

"The buyers are sitting on the fencepost because of the economy," Wyatt said. "They don't want to sell their house unless they can get top dollar."

Realtor Gragg Miller said the real estate price boom, fueled by too-easy mortgage financing, encouraged overbuilding of condos at the lower end of the price range too, as developers tried to build dwellings that buyers could afford as single-family home prices soared.

Statistics from the Northwest Multiple Listing Service indicate that luxury condos like Marcucci's are the exception, and condos are still the bargain alternative for many. The median Whatcom County condo price for October 2009 was $191,000, while the median single-family home price was $258,500.

The number of condo sales also appears to be rebounding. Sales closed on just 20 units in October 2008, near the end of a year that showed a sharp drop-off in overall sales. But for October 2009, the total was 43.

Condos with bay views will continue to command premium prices, because view properties will always be in limited supply, Miller said.

As economic conditions improve, Wyatt thinks the simple demographics of the baby-boom generation will reignite the demand for condos. Affluent retirees will want a home base that requires less attention than the suburban rambler.

"They can travel, they can leave, they don't have to mow that yard," Wyatt said.

That describes the lifestyle of retired Bellingham banker Cy Lindberg.

The value of his house did fall after the boom went bust, but midrange condo prices fell even further, and Lindberg said that added up to a buying opportunity for him.

"We sold our house this summer (2009) and bought a condo we had looked at but could not afford three years ago," Lindberg wrote in an online message. "Now, it's down to a reasonable price and we are loving it, as it is so much easier to walk away from a condo for the winter than close up a house."