How much would income to afford a 680K home? (Seattle: new home, established neighborhood)

[armiva]

Thanks for the replies everyone. Going by the 30% of income rule we should be fine, but seeing as we are financially conservative we like to know what people buying in that range usually earn. We definitely like to have a good amount every month going to savings after 401k (we contribute the max to that plus 50% employer match).

Some answers to the replies and specifics about the home:

-The 678K price is AFTER around 35K in upgrades. The home is in the North Bothell area, which has many new developments coming up. We like the area and are sort of emotionally attached to it because we have already lived here several years and have good friends here, and the advantage is that our kid does not get displaced from his friends either. There are no options to buy anything but new construction here, as there is simply no used inventory.

-The home is just up the road from our current home. In this hyper-local area, prices have gone up by around 140K in the space of 9 months. I know because last summer went to buy a Westcott home which was 544K. We dragged our feet and now the exact same model in the community is going for 672K. People who bought the homes in the 540s now have well over 100K equity in less than a year. The new North Creek High School seems to be really accelerating prices, plus the proximity of the elementary school as well.

-The new home will only be ready in 12 to 16 months from now. The thing is if we wait to buy next year, we are concerned that prices will be much higher (Zillow and Redfin projections predict a 5-6% increase in this area). That is why we thought it might be a good idea to buy now and in the coming year, it gives us a chance to save more money, plus have our own home possibly appreciate more etc.

-As far as schools, that is something really important to us. Our son is in the Northshore Highly Capable program and it is not an option to have him get set back in school and repeat work he has already done by being placed in a regular class. However, we have an option to buy in Everett SD because they have accepted him into their HiCap program based on his scores (so he would go to Cedarwood Elem). There is a "backup" home that we like in the Everett SD area that is about 50K cheaper, but the HS would be Jackson High instead of the new North Creek High. And I don't know all that much about Jackson. I don't know if we should just save the 50K and buy the other home which is an equivalent home ( in terms of same sq ft, finishes, new construction etc).

Would appreciate hearing thoughts on all these issues. I am having a really tough time deciding whether to go through with the offer or to just wait it out and perhaps prices will decline (of course, in that case, the price of our existing home would fall as well). Or to go with the 50K cheaper (but still really nice) home in Everett SD.

[flyingsaucermom]

I would do it on a $150k+ income (WITH stocks and cash bonus) and a decent down payment.

[armiva]

Originally Posted by flyingsaucermom

I would do it on a $150k+ income (WITH stocks and cash bonus) and a decent down payment.

Thanks, that helps. By "with", did you mean 150K INCLUDING bonus + stocks or 150K BEFORE those?

[modc]

Northshore school district has a much better reputation than Everett. I think homes will appreciate more in that particular school district over Everett. It sounds like you are really happy in your bothell neighborhood And your child and you have friends and a community.. I think that's priceless and wouldn't change that in order to save $50,000 on an a $672,000 house.

I don't know if prices will go up or down in the near future in terms of buying a house now or waiting. I just think you should stay in bothell for the reasons mentioned above.

[flyingsaucermom]

Originally Posted by armiva

Thanks, that helps. By "with", did you mean 150K INCLUDING bonus + stocks or 150K BEFORE those?

Sorry, I should have said "in addition to" the base salary.

[Ruth4Truth]

Originally Posted by armiva

(I don't know how to edit my title but I meant to say "How much income to afford a 680K home".)

It's almost impossible to get a home in the Eastside for under 600K these days. We found a home in a good school district we really like that will be close to 680K after upgrades. We're a single income family, 1 elementary age kid, have a current home with around 150-160K equity. No student loans, or any other debt. How much household income do people in the Seattle area have, who are buying homes in this price range? Of course I can't ask anyone directly, but hopefully I can get some answers here so I can feel more comfortable about my potential purchase. Thanks in advance for any help.

Your thread topic isn't a Seattle area question; it's an Economics forum question, or a Real Estate forum question. Any agent would help you figure out what you can afford on your income.

[armiva]

Originally Posted by Ruth4Truth

Your thread topic isn't a Seattle area question; it's an Economics forum question, or a Real Estate forum question. Any agent would help you figure out what you can afford on your income.

Thanks for your input.

[west seattle gal]

Originally Posted by Ruth4Truth

Your thread topic isn't a Seattle area question; it's an Economics forum question, or a Real Estate forum question. Any agent would help you figure out what you can afford on your income.

Except that people will generally qualify for a higher home loan in Seattle than some other areas of the country. But just because you can buy a 680K home with a 200K salary + some down, does that mean you should? The answer is different for everyone. Personally, I don't want more than 1/4 of my net, after taxes/deductions salary to go towards mortgage each month, but everyone is comfortable with a different number. We all know house poor people in Seattle.

[Minntoaz]

I'm confused on why you are buying a new house in the first place?

You state you have one child. Is it for a better school district? Because I saw you stated the new place would be in the same neighborhood but perhaps it is near a better school?

It really is a very personal decision. It's a matter of sorting out the needs and the wants. Life is too short to constantly be working to pay off debts.

[noah]

This is great advice and the 1/4 of net is excellent but even with taking less house not everyone in Seattle can pull it off. For the 5-10% or less of households in the $200k+ it works but if your at 80k, 100k or less like the majority of households getting to the 1/4 is tougher.

Originally Posted by west seattle gal

Except that people will generally qualify for a higher home loan in Seattle than some other areas of the country. But just because you can buy a 680K home with a 200K salary + some down, does that mean you should? The answer is different for everyone. Personally, I don't want more than 1/4 of my net, after taxes/deductions salary to go towards mortgage each month, but everyone is comfortable with a different number. We all know house poor people in Seattle.