Sellwood 13, a development under way in Southeast Portland, has been apartments, then condos, then apartments again in its short but eventful life.

Construction of the 30-unit residential building is nearing completion amid softness in rent growth and strong demand for affordably priced homes.

Meanwhile, in Northeast Portland, a new 62-unit building, Overlook Park Condos, includes both condos and apartments. Nonbinding reservations have been made for about 25 of the units, and 10 more are leased as apartments, according to Debbie Thomas, a real estate agent who represents the property.

The story of Sellwood 13 and Overlook Park shows a developer cautiously testing the waters of the condo market and finding it working in one location, but not another. Both buildings were developed by VWR Development, led by local developers Vic and Wally Remmers and Brad Hosmar.

Overlook Park will be fully converted into condos as the apartments’ leases end, Thomas said. Apartment tenants will have the first shot at buying the condos, she said.

Mostly young buyers have been snapping up the Overlook Park units.

“It just speaks to the pent-up demand for sale property,” Thomas said.

The developers declined an interview request.

On Tuesday, a young couple, Juanita Karan, 31, and Matt Zellers, 27, toured the condo units at Overlook Park. The couple has been renting separately, Zellers in Northwest Portland and Karan in the John’s Landing neighborhood, and they expressed interest in buying either a large unit together or smaller condos separately.

“It kills me to pay money to rent and not have equity,” Karan said.

Zellers agreed, saying, “Every month, I get no equity out of the rent I pay. You’re paying someone else’s mortgage.”

For would-be buyers like Karan and Zellers, there is little property available for them to consider. Many homes are owned by investors, who choose to rent them out either monthly or on short-term rental sites such as Airbnb. Portland in April had 1.7 months of single-family inventory, far below what is considered a balanced market.

The Overlook Park Condos, as the name might suggest, look over the park of the same name, which looks over the Willamette River and downtown Portland. Karan and Zellers toured units on the sixth floor. They found the views to their liking – to the east was a view of Mount Hood, while to the southwest, the prospective buyers could see the river, Fremont Bridge and downtown skyline.

The building includes amenities such as a dog wash – which Karan said she would use for her Pomeranian – and underground parking. The 17 parking spaces will be sold separately.

VWR’s other new building, Sellwood 13, located at 1313 S.E. Spokane St., does not include any parking. Sean Z. Becker, an agent who represented the building, said that was an issue for the property. The condos were pulled from the market after nonbinding reservations were made for 12 of the units. The units were made available again as apartments.

Condo buyers demand parking, Becker said.

“For a condo building, that’s kind of mandatory,” he said.

But a well-located rental property may be able to do without parking, he said.

“I believe we’re on the front side of a new building condo run,” Becker said. “It’s just about the right building in the right location at the right time.”

The developments come as home prices continue to appreciate, reaching a median of $385,000 in April, according to Regional Multiple Listing Service. That has caused some buyers and developers to reconsider condos, which fell out of fashion after a boom in the 1990s. Part of that was due to legal liability that looms over condo development.

Yet there are signs the market could be ripe for condos. Recently, a condo in The Casey, a luxury building in the Pearl District, sold for $4.5 million to a buyer moving from the East Coast.

Hoyt Street Properties has seen success with Cosmopolitan, and is building Vista on Block 20 in the Pearl District.

Condos that reach the market are being snapped up quickly. Condos spent only 34 days on the market on average in 2016, down from 37 days in 2015 and 95 days in 2013.

“There’s nothing to buy, so when it hits the market, it’s gone,” Becker said.

Prices per square foot have grown as well, to $498 in 2016, up from $436 in 2015.

Hoyt Street Properties was the first to market since the previous condo boom with Cosmopolitan, completed in 2016. The building’s entire inventory of 150 condominiums sold out almost immediately at prices averaging $700 per square foot.

In 2016, 1,812 condo units were sold, according to RMLS data gathered by Becker’s office. Only 168 were delivered.

The hottest markets are at the lower and higher ends. Condos priced at $300,000 to $500,000 spent on average only 27 days on the market in 2016. Luxury condos of $1 million to $2 million spent 46 days on the market. Condos priced between $700,000 and $999,000 sat on the market longer, 53 days on average.

Nationally, condo sales jumped 9.8 percent in March 2017, compared to a year earlier. That topped sales growth for single-family homes, according to National Association of Realtors data. Prices for condos rose 8 percent on average, also topping price growth for single-family homes.

At Overlook Park, prospective buyers started inquiring about condos as the building was finished in January. Thomas said the interest led the developers to convert to condos.

Condo projects like Overlook Park have been a long time coming, Thomas said.

“I’m just surprised it hasn’t happened sooner, like two years ago, because we’ve had a big shortage of urban housing for sale in general,” she said.

For Sellwood 13, the modest size of the units and distance from mass transit made condos less appealing than apartments, Becker said.

By contrast, the condos at Overlook Park, at 3705 N. Overlook Blvd., are a short walk to a MAX light-rail station. The condos are adjacent to the 11-acre city park.

“They’re the perfect size for millennials or empty nesters,” Thomas said. Prices range from $250,000 to approximately $440,000.

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