Prospective condo buyers in Seattle area sitting on the fence

Sometime around the end of the year, the first residents will move into Bellevue Towers, Bellevue's tallest skyscrapers.

They may have plenty of elbow room for a while.

The twin, 42-story luxury condo towers are nearly finished. But just over one-third of the 539 units have been sold.

"We had hoped to be two-thirds sold by now," Scott Eaton, a principal with developer Gerding Edlen, said recently. "It's a different world."

The financial crunch is squeezing builders of new for-sale housing of all types, including those big new condo towers rising toward the sky in downtown Seattle and downtown Bellevue. More than 2,300 condo units are under construction in the two city centers, according to figures compiled by principal Dean Jones of the condo-marketing firm Realogics. Almost all are scheduled for delivery within the next year.

So far fewer than half have been sold. In some projects barely one-quarter of the units are spoken for.

Prospective buyers for these mostly high-end, in-city condos are sitting on the fence, Jones says, their confidence shaken by fears of recession and the national real-estate downturn.

Some can't sell their present homes. Some are waiting for condo prices to drop. Some are having more trouble getting loans.

"People who thought they were prequalified all of a sudden aren't anymore," land-use economist Matthew Gardner said.

But developers have shown little sign of panic. Few, if any, have reduced their prices — in part because rising construction costs already have cut into their profit margins, Gardner says.

Eaton says he's confident that Bellevue Towers will sell out because the market's fundamentals are strong.

Persistent rumors that at least one of the towers will become apartments are unfounded, he says.

Microsoft, Expedia and others will bring thousands of new jobs to downtown Bellevue over the next year or two. Downtown living continues to appeal to growing numbers of buyers.

And when the market does pick up, Eaton and others say, buyers will find they have few choices.

With so many proposed downtown condo projects delayed, canceled or converted to apartments, the buildings under construction now are likely to be all that's available for several years.

If demand does increase, limited supply could mean higher prices. But at this point, that's a big if.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com