Seattle now ranked #3 most expensive major US city to buy a home (Spokane: for sale, real estate)

[Flightoficarus87]

Just as we've been hearing reports of the housing market slowing down a bit here, this little dose of reality popped up in the local news.

https://www.king5.com/article/news/l.../281-590116697

According to this report (based on a Seattle Times article using Zillow data), Seattle is now #3 in the US behind San Francisco and San Jose to buy a home (And is #7 in the US for overall housing costs, factoring in rentals and homes to own).

An interesting thing I noticed based on the numbers presented...

Seattle home price (2014) - $434,100
Seattle home price (2018) - $753,600
Seattle's increases in 4 years - ~73.6%

SF home price (2014) - $892,900
SF home price (2018) - $1,366,000
SF increase in 4 years - ~52.98%

This article seems to suggest that prices are rising even faster here than they are in SF (not sure about San Jose, which has been pretty crazy as well).

Maybe there's still a lot more room for price growth in Seattle than some of us would like to think?

[HuskyDawg]

The market is slowing some here. Had relatives look early May and it was crazy, but just bought a home in August and the market was much better for buyers than it has been in a while. The census data from tax returns doesn't support the prices. Most residents of King County don't have incomes for 700K homes. Low interest rates with an influx of foreign buyers/investment has also skewed the market, besides the obvious tech job market. Just the few jumps in interest rates have knocked some buyers out it seems.

[homesinseattle]

Agree Husky, not all bad. Actually it's encouraged some buyers who had buyer fatigue to give it another go. I nabbed a home in Lynnwood just last night for some clients. Listed $460K, really nice 3/2 rambler mid century on a quarter acre with proper master, nicely remodeled. It had been on the market 12 days. We came in at $435K, got it for $447K.

[harrishawke]

Well makes senses. High wage earners from Amazon and Bay Area Refugees...

[Commonproject]

Personally I don't see it declining, may just slow down a bit. All the tech companies are expanding their offices here. For reference, a fresh grad out of college at FB was offered $230K this year ($150K base, $50k sign on, 20% bonus); that's not even including the RSUs that's going to be worth another $20-50k per year. He said the offer was the same for the Menlo Park office.

[HuskyDawg]

Here's an article last summer about King County Salary data.
https://www.seattletimes.com/seattle...irs-data-show/

[CoastieTX]

Personally, I think the Seattle housing market will see a rather immediate correction.

According to the article below, Seattle’s values skyrocketed 45% since 2016. This coincides nicely with the Canadian government’s 2016 implementation of its foreign investor tax aimed squarely at wealthy Chinese speculators. In their eyes, Seattle immediately became the next Vancouver.

Now, the most recent slowdown also coincides nicely with two events affecting Chinese investors: the devaluation of the yuan and stricter controls on Chinese money leaving the country. It’s being said Chinese demand for Seattle real estate has suddenly dried up.

Without the Chinese propping up the market, it’ll be interesting to see what happens when real earnings determine values. Could we revert back to 2016 values?

Remember, what goes up fast, can also come down fast..

https://finance.yahoo.com/news/seatt...110000328.html

[Bluefox]

It’s astonishing actually how low rents are compared to home values, at least in the city. I would pay, easily, 2.2-2.5x more in rent in San Francisco for what I am getting in Seattle. While it isn’t cheap by any means, as a renter I feel like I’m getting such a good deal for what I am getting. I really do. If I were buying in the city, I would be paying much more apples to apples. I mean, $3500 doesn’t even get you a dishwasher in a 1br in a desirable SF neighborhood. And for what, homeless people to step over at every corner, and chilly summers? That, to me, is crazy. I will take Seattle/Washington any day of the week.

[Blondebaerde]

Originally Posted by Flightoficarus87

Maybe there's still a lot more room for price growth in Seattle than some of us would like to think?

Million-dollar question, pardon the bad pun.

If that is true, trying to decide if I need to do some leveraging to buy a couple rental units, being an earlier-entrant with liquidity. Those trying to move in now, including idiots who want "safe, great schools, easy commute (to major employers), affordable" need an entirely different approach vector. Straight to Spokane.

(crosses fingers): may the next downturn not be so bad, we're due for one, though economic indicators do not appear to support either an 1) economic crash or 2) real estate downturn in the near term. Just so I can sell out of this amazing place, buy a studio condo somewhere, and join little old ladies on cruises and shuffleboard parties rest of my existence. Please, oh please...

...as they just complete the framing on yet another $2-3M mansion down the block. Astounding, dynamiting down ghetto cottages from the 1950s to rebuild McMansions here in NorKirk and other parts of Kirkland, too. It's the land, baby.

[eugene_b]

Originally Posted by Bluefox

It’s astonishing actually how low rents are compared to home values, at least in the city. I would pay, easily, 2.2-2.5x more in rent in San Francisco for what I am getting in Seattle. While it isn’t cheap by any means, as a renter I feel like I’m getting such a good deal for what I am getting. I really do. If I were buying in the city, I would be paying much more apples to apples. I mean, $3500 doesn’t even get you a dishwasher in a 1br in a desirable SF neighborhood. And for what, homeless people to step over at every corner, and chilly summers? That, to me, is crazy. I will take Seattle/Washington any day of the week.

As someone who recently moved from NYC (in our latest iteration of travels at least), this ^ very accurately describes our experience too. My wife and I have been going over this for half year now (since we moved basically) and we are really failing to justify reasons to buy with rents this cheap.
We are not experts in real estate investing, may be we are missing something very obvious but I found a condo for sale that is extremely similar to what we are renting: next to us, similar sqft, etc. We are renting ours for 2300 per month. According to that calculator thingy on Redfin: HOA fees, taxes and insurance already come to 1300 per month (I picked condo in hopes that I can use HOA to estimate maintenance costs of some of the house elements). That already leaves us at only negative -1000. Add to that interest payments, random utility fees that are already included in our rent, maintenance of internal parts of the house that HOA doesn’t cover (currently when something breaks, I just call people and they fix or paint things for free for me), etc etc and in the end I am not sure if that number will be negative even. That very very strange rent to ownership ratio is going to be probably the largest thing preventing us from buying house soon.

We tried going to open houses, talking to random Redfin realtors, etc and the counter arguments we are getting so far are along the lines of “Yeah but when you rent, your money just goes nowhere into landlord’s pocket” and “Sure but over the last 3 years prices increased by {big_number}% so you need to add {big_number}% to the current price and that’s how much your house will cost 3 years from now; you are literally going to make hundreds of thousands of dollars in 3 years by just sitting in your house!”. I definitely cannot see future and maybe they are right but I haven’t been very convinced. But maybe it’s just me Or may be I am really missing something.