In 2006, Zac Johnson bought a house in NewHolly, the Beacon Hill housing development created by Seattle Housing Authority as a prototype for mixed-income multicultural living. He paid $345,000 for a newly constructed four-bedroom—which a few months ago he sold for almost half that price.
To Johnson, who runs Meaty Johnson's BBQ in Pioneer Square, it seems that home prices have de-escalated even more sharply in NewHolly than in other parts of the city. "It happened so fast," he says. Having seen neighboring home values rise to more than $400,000, he watched them dip to the break-even point and then plummet as one neighbor after another went through a short sale (in which a house is sold for less than the value of the mortgage).
It would seem a big comedown from the time when buyers rushed to NewHolly, proving that middle-class people really would buy homes right around the corner from poor public-housing tenants. Indeed, in 2005, when developer Polygon Northwest was selling houses on a first-come, first-served basis, buyers literally camped out. From a story SW did then ("Rich House, Poor House," July 13, 2005): "Nine families ended up spending the night together, supplied by Polygon with pizza, doughnuts, and an office where the buyers could lay out sleeping bags. In the end, 40 potential buyers showed up. The demand was so great that Polygon, which has continued building town homes, has raised prices several times in just the six months since."
Has the attraction of NewHolly waned? Some suggest that crime is a problem: Johnson says his household (he and several roommates) experienced five car break-ins. But that's not why he moved: Like many others who have decamped from their homes of late, he did so simply because he was deeply underwater.
The plummeting prices he saw probably have more to do with NewHolly's status as a new development than as a mixed-income experiment. Mount Baker Windermere agent Al Johnson (no relation) says that if you have a bunch of identical homes for sale—all built at the same time—a price war is likely to break out. "Obviously the buyer will pick the least expensive one," he says. If NewHolly's prices de-escalated faster than those in other parts of Seattle, that may be because new developments are few and far between in the city (most of them being other SHA projects that followed NewHolly). Indeed, that was a big part of NewHolly's appeal in the first place.
In fact, it still is—for those buying the new homes in a quasi-addition to NewHolly. Eric Uyeji, another agent in Windermere's Mount Baker office, says he is currently selling homes built on an extra parcel sold by SHA to developer Bennett Homes. Priced in the mid-$300,000s, five have found buyers in the past month and a half. These newer homes may have contributed to the deflated values of NewHolly's slightly older homes, Uyeji surmises. After all, when a similar but newer home is nearby, why buy the older one?
So NewHolly's utopian dream may still be alive. It's just living in an especially punishing market.