Article in Seattle times talks about people in their 20s and 30s leaving Seattle due to high housing costs. (Vancouver: real estate, 2015)

[Walch1007]

Originally Posted by amaiunmei

Is it really so terrible to rent?

My husband and I are making good money, but we've decided not to buy here because signing on the dotted line at the current prices is just too much pressure. Since most other markets are cheaper, we figure we'll just save money here and wait to buy a house for cash later.

Do the math. You will often pay more in rent than a monthly mortgage payment on the same property. A mortgage also allows you to leverage 4:1 (e.g. you invest 200K, the bank will lend you 800K). You are essentially borrowing to invest in the real estate market. Unless housing prices appreciate slower than your interest rate, you will come out ahead.

For those who think it's a bubble, it's not. Chinese money will continue to flow into the city. China has 1.3 million millionaires (likely significantly understated) and they all want out.

[amaiunmei]

Originally Posted by Walch1007

Do the math. You will often pay more in rent than a monthly mortgage payment on the same property. A mortgage also allows you to leverage 4:1 (e.g. you invest 200K, the bank will lend you 800K). You are essentially borrowing to invest in the real estate market. Unless housing prices appreciate slower than your interest rate, you will come out ahead.

For those who think it's a bubble, it's not. Chinese money will continue to flow into the city. China has 1.3 million millionaires (likely significantly understated) and they all want out.

I DID do the math.

I can leverage myself to my eyeballs ... OR, I can pay off my student loans and enjoy my freedom and -- when the stars align -- buy a house for cash somewhere else because most markets are not acting the way Seattle's market is.

Other people will do what they will do, but ultimately, the cost of schooling has gotten people to the point where they HAVE to choose schooling or housing. School is winning out. My priority is paying off school; there's no space in our budget (which is over $150K/yr) for anything else after saving, bills, etc.

There just comes a point where you have to say NO, and this is it.

[Ruth4Truth]

Originally Posted by amaiunmei

Is it really so terrible to rent?

My husband and I are making good money, but we've decided not to buy here because signing on the dotted line at the current prices is just too much pressure. Since most other markets are cheaper, we figure we'll just save money here and wait to buy a house for cash later.

No, it's not terrible to rent, IF you're in a stable rental market. If you're not (Seattle & Bay Area are not), then as rents skyrocket while your salary does not, you end up having to move every few years, getting pushed into smaller units or farther away.

[amaiunmei]

Originally Posted by Ruth4Truth

No, it's not terrible to rent, IF you're in a stable rental market. If you're not (Seattle & Bay Area are not), then as rents skyrocket while your salary does not, you end up having to move every few years, getting pushed into smaller units or farther away.

I guess what I'm saying is this: even with rising rental prices, buying isn't worth it to me. It may be to someone else, but for my life right now, it doesn't make sense. At $600k, you have to choose the house in Seattle ... or, you could just decide to stay in Seattle as long as you can afford it and move away when you can't. No harm, no foul.

Seattle is a great place to live, and it's a great place to work. But, not for $600k. It makes sense to hitch your wagon elsewhere if you can't afford a place anymore. We should be praising these kids for their fiscal conservatism, if anything.

[noah]

Obviously Seattle real estate has a good record of doing quite well but even today its hard to find many properties that actually are cheaper than a rent payment and that's after you tie up 20% in a down payment...which could be used in other investements + we aren't even talking about maintenance which is significant over the years. In most markets you can expect to see values increase at about inflation and a good argument can be made that renting is a good choice financially...all that said if you hold long term (10+ years) buying can be a good move but rarely does it cost less than renting.

Originally Posted by Walch1007

Do the math. You will often pay more in rent than a monthly mortgage payment on the same property. A mortgage also allows you to leverage 4:1 (e.g. you invest 200K, the bank will lend you 800K). You are essentially borrowing to invest in the real estate market. Unless housing prices appreciate slower than your interest rate, you will come out ahead.

For those who think it's a bubble, it's not. Chinese money will continue to flow into the city. China has 1.3 million millionaires (likely significantly understated) and they all want out.

[annonymous0381]

Is is still possible to find a 2 bedroom 2 bath condo for $300,000 or $325,000 in Northgate Seattle or do you have to go to Lynnwood for these prices??

[mhays25]

Renting can be better on day one but worse after a few years. That can be pretty stark after 5-10 years.

Meanwhile much of that mortgage payment is principal -- assuming the home value holds up, that portion is paying yourself. Another benefit is mortgage interest deduction.

None of this is simple. Lots of pluses and minuses in each column. Renting is still a good idea if you want flexibility.

Of course even then it's not simple. It can actually be quicker to sell a place than get out of a lease with several months remaining.

[homesinseattle]

Anonymous. When I showed you that condo in Northgate (was it 2 years ago?) it was possible. Might be able to find one for $375k now or as you say, push up north (maybe Shoreline)

[hellopity]

Originally Posted by amaiunmei

I DID do the math.

I can leverage myself to my eyeballs ... OR, I can pay off my student loans and enjoy my freedom and -- when the stars align -- buy a house for cash somewhere else because most markets are not acting the way Seattle's market is.

Other people will do what they will do, but ultimately, the cost of schooling has gotten people to the point where they HAVE to choose schooling or housing. School is winning out. My priority is paying off school; there's no space in our budget (which is over $150K/yr) for anything else after saving, bills, etc.

There just comes a point where you have to say NO, and this is it.

There are many "rent vs. buy" calculators out there and it seems like you have done your homework to figure what what works best for you and your family financially. Bravo! It really is quite premature for people here to push you to buy (or rent) without knowing the specifics of your finances and risk tolerance. Good luck to you and hope you pay off those student loans soon! Very best.

[xboxmas]

Originally Posted by James Bond 007

LOL - how do you know? Are you telling me there's no 20-something or 30-somethings in those 3 cities?

Exactly, millennials aren't only confined to liberal areas. I am a millennial living in Seattle but its because of my job, not because I'm a millennial who wants to live in the city (although I enjoy it). I could easily live in a smallish town (not too small or too far away from a bigger city).