Downtown Seattle: Where things are looking up

In 2003, Sam Cunningham was living in a big house in Issaquah, spending 45 minutes a day in a car commuting to downtown Seattle every weekday. Weekends were spent tending to the yard.

He loved the experience of occasionally staying in hotels in downtown, waking up in the morning and walking out the door for a bagel and a cup of coffee. He was tired of driving into downtown to visit friends, to eat and play.

On Valentine's Day in 2003, while he was staying in a hotel he came across the sales center for a planned condominium project downtown. He said he quickly bought in, waiting two years for the building to be constructed.

"People who are coming from outside of understanding the lifestyle, there's that trepidation about what the [condo] market's doing," Cunningham said. "But for those of us who live here, we don't really care much. This is how we live."

And living downtown is something that a growing number of people are doing. Not too long ago, downtown Seattle was seen mostly as a place to shop, work and get out of before it got dark.

The relatively few people who lived there were mostly in low-rent apartments in older buildings.

Today, there is still plenty of affordable housing available downtown through various programs and agencies. But they've been joined by many new condo and apartment projects catering to residents of all income levels.

The residential revival in downtown Seattle has been boosted by growth in surrounding neighborhoods — Belltown, South Lake Union, Denny Triangle, First Hill and Pioneer Square.

Downtown's central location and proximity to shops, restaurants and offices obviously is one of its big selling points, but many places also come with stunning views of Elliott Bay and the Olympic Mountains. The trade-offs include dealing with noise and traffic, although many residents say that they get used to it and that modern windows can muffle much of the noise. Real-estate agents say that while the market is showing signs of a comeback, it's still a buyer's market for people shopping for a condo in downtown Seattle. Things are up, they say, but nowhere near the peak hit in the summer of 2006.

"We're not at three to four years ago at all," said Kelly Cash, an agent with Windermere Real Estate. "We're gradually climbing back here. Last year was such a dismal year, and we're encouraged to see it coming back. But we're not looking for a boom market for another three years at least."

In 2006, the seller had the power. In 2010, the buyers are the ones with leverage.

"Unless it's a really hot property and seems like a great deal," Cash said. "Nearly all the buyers are looking for a great deal. They know they have the power and they're using it."

Here is an example of what recently was for sale in the downtown area. In a 69-unit condominium building built in 1989, a 924-square-foot, one-bedroom, 1.5 bath condo was listed at $340,000. And it's so close to the Pike Place Market, you can smell the Piroshky Piroshky Russian bakery from the front door.

But it has carpet instead of hardwood flooring, a crowded floor plan and relatively small windows in a building that has almost no amenities. And there is floor-to-ceiling custom cabinetry all throughout the place, which could be a plus or a minus, depending on taste.

At the higher end was a two-bedroom, 1,644-square-foot condo with a view of downtown listed for $1.28 million. That condo has hardwood floors, granite counters, heated floors in the bathroom — and a staggering 1,300-square-foot deck.

According to Seattle-based Zillow.com, the median value of all homes in downtown Seattle (mostly condos) was $454,500 in September, down 2.9 percent year-over-year and 1.2 percent month-over-month.

The Zillow Home Value Index represents the median value of all homes, not just homes that have recently sold.

Cash and other real-estate professionals say that downtown buyers are coming from a wide range of backgrounds: From empty-nesters looking to downsize to first-time buyers. What they're not seeing, though, are many families and real-estate investors.

But the investors are expected to return.

"It's easier to become confident that the market will be appreciating again."Cash said. "I've never seen rates this low, I've never seen a better inventory with prices so low. And it's just going to appreciate the way Seattle does."

Seattle Times desk editor Bill Kossen contributed to this story.