How do average income earners afford homes in Seattle? (sales, real estate market)

[Ira500]

The good news is...that when people can't afford to buy houses, either salaries go up or house prices go down, and salaries don't lok they are going up.
Historically, there is an income to home price ratio and a rents to home price ratio and ultimately they also adjust to meet this historical ratio....So, while many real estate agents will tell you that prices have reached their bottom and you better buy now or be priced out forever, I have a different view. I think that home prices cannot do anything right now except continue to fall in Seattle, and possibly significantly lower. Also, those places that saw the biggest home price increases in recent years are now seeing the biggest drops...so while Seattle didn't go up as much as a Las Vegas or Miami, it did increase more than many places, and it's prices didn't start dropping until much later than many places, but they're dropping now.
I'm not saying not to buy a home, heck, I'm a real estate agent, but you should never buy a home you can't afford, you should never buy a home you don't plan on keeping for at least 5 years plus, and you should be aware that waiting to buy a home might be a wise move right now.

[Ira500]

The good news is...that when people can't afford to buy houses, either salaries go up or house prices go down, and salaries don't lok they are going up.
Historically, there is an income to home price ratio and a rents to home price ratio and ultimately they also adjust to meet this historical ratio....So, while many real estate agents will tell you that prices have reached their bottom and you better buy now or be priced out forever, I have a different view. I think that home prices cannot do anything right now except continue to fall in Seattle, and possibly significantly lower. Also, those places that saw the biggest home price increases in recent years are now seeing the biggest drops...so while Seattle didn't go up as much as a Las Vegas or Miami, it did increase more than many places, and it's prices didn't start dropping until much later than many places, but they're dropping now.
I'm not saying not to buy a home, heck, I'm a real estate agent, but you should never buy a home you can't afford, you should never buy a home you don't plan on keeping for at least 5 years plus, and you should be aware that waiting to buy a home might be a wise move right now.

[Jennibc]

Originally Posted by seattlenextyear

weather....high home prices...whining.....weather.....high home prices....whining.....weather.....high home prices....whining...

I am not really sure where you are seeing any whining on this thread. It is a conversation about how high housing is in the area and the economics behind it, nothing more. Now the weather threads, I'll give you that, lots of whining. But if you have a problem with whining an internet bulletin board is probably not a place to spend your time, because frankly, people whine, and what's the point in getting frustrated about it. It is what it is.

[seattlenextyear]

Originally Posted by Jennibc

I am not really sure where you are seeing any whining on this thread. It is a conversation about how high housing is in the area and the economics behind it, nothing more. Now the weather threads, I'll give you that, lots of whining. But if you have a problem with whining an internet bulletin board is probably not a place to spend your time, because frankly, people whine, and what's the point in getting frustrated about it. It is what it is.

I'm saying that 99% of the posts on the Seattle forum fit into one of these 3 categories.

[Jennibc]

Originally Posted by seattlenextyear

I'm saying that 99% of the posts on the Seattle forum fit into one of these 3 categories.

C'mon, there are posts about gangs, taxes, and traffic too!

[Woof]

I'm not an expert on housing as you are, Ira, but it seems to me that you're right - and even understating the problem. Unemployment is looking to get much, much worse over the next several months, also credit will continue to tighten up over the next several years meaning it will be hard for many to get a mortgage.

So house prices will continue to fall for a good long time. Already there are many great deals on foreclosed houses, for those who have a secure job and are able to buy. But make absolutely sure you have a job that isn't going to disappear.

[bhouston77386]

People in the 60', 70's could own homes on an average income. It was even possible to get a second home and rent it out.

[Jennibc]

What happened was population grew, incomes grew, but housing stock, while increasing, did not increase enough to meet demand. More dollars chasing a finite number of houses means that prices rise. I wonder also if the number of people that divorce and the number of people that wait to marry had an effect. In other words when families broke up they now needed two living spaces rather than one. And while people used to marry at 22 and now wait longer, there are that many years that two people that would have shared housing are in separate housing. I am sure someone out there in some part of academia must have considered that.

[DawnR]

Hi,

I am also a real estate agent and although I don't see home prices shooting up anytime soon, I also know that the Puget Sound still remains one of the strongest economies in the nation. Yes, we are seeing some layoffs/RIF's as yes, home prices are expected to stay flat. Some experts are expecting home prices to fall another 5% or so in the coming year. This market is really difficult to forecast however, when the economy does start to recover, Seattle is expected to be one of the first places to see that recovery.

In answer to the original question, yes people with average incomes can own homes in the Puget Sound area. We have a saying...drive 'til you qualify. If you want to live in Seattle proper, the best thing to do is to get started by buying in a Seattle suburb (north or south), build equity and eventualy move from there. As far as the average home price is concerned, that price is inflated by homes located on Mercer Island, Bellevue, and Seattle, to name a few. Prime waterfront property is very expensive and those properties affect the averages.

The best thing you can do right now is to contact a mortgage lender to see how much home you can actually qualify for. This service should cost you nothing if you contact a reputable lender. If you cannot qualify right now, a good lender will coach you on what you need to do to be able to qualify in the future. If you can qualify now, once you have that magic number, you can go to any real estate website (or contact a Realtor) to see what's available in your price range.

Good luck and if you have more questions, I'd be happy to answer them.

[tada]

Originally Posted by seattlenextyear

weather....high home prices...whining.....weather.....high home prices....whining.....weather.....high home prices....whining...

No one's holding a gun to your head and forcing you to read every post on this forum.

Seattle's infamous for its weather. Obviously there are going to be a ton of posts on it. And obviously since there are potential transplants to the city inquiring, there are going to be conversations about housing.