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Old 08-17-2012, 08:13 AM
 
Location: WA
353 posts, read 934,696 times
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How is the market in Seattle? Saturated? Expensive? Is this a good or bad time to rent? I am thinking of 1br units in the neighborhood or $1500.
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Old 08-17-2012, 10:17 AM
 
9,618 posts, read 27,345,532 times
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They've built a lot of luxury type apartments in Seattle in recent years, and are continuing to build. I wouldn't say it's saturated, but it may become that way. Myson lives in a luxury type apartment in Ballard and pays 1400 for a one bedroom. They do get fancier and a lot more expensive than that. Is it a good time to rent? I don't know. Rents have been rising faster than home prices, but I disagree with the article you linked to on another thread about it taking four years to break even. I think it's just because I see charlatans in the real estate industry, and Zillow is noted for it's wildly inaccurate home price valuations, so I don't trust them. They're counting on rents to rise at a certain level, but I'm not sure if they're counting on property taxes to rise.
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Old 08-17-2012, 10:39 AM
 
Location: Berlin, Germany
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Hi Ira, so you think it takes longer than 4 years to break even, correct? Taking into account rising property taxes...I guess Zillow would have an interest in getting more people to buy, so that would make sense.

I am in a situation in which I don't really want to buy because I don't have permanent residency in this country (yet) and you never know what happens but on the other hand in the current market I could relatively (easily) afford to buy a condo, so I find this Zillow research really interesting...
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Old 08-17-2012, 11:51 AM
 
9,618 posts, read 27,345,532 times
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Quote:
Originally Posted by SitoUK View Post
Hi Ira, so you think it takes longer than 4 years to break even, correct? Taking into account rising property taxes...I guess Zillow would have an interest in getting more people to buy, so that would make sense.

I am in a situation in which I don't really want to buy because I don't have permanent residency in this country (yet) and you never know what happens but on the other hand in the current market I could relatively (easily) afford to buy a condo, so I find this Zillow research really interesting...
I think it's more a matter of Zillow just guessing on how quickly rents will rise and for how long.
For example, there's a building in Ballard across the street from my son's building, a condo building built in 2007. There'a one bedroom unit for sale for 269,950. If you had a zero down VA loan, your payments, including HOA dues, taxes, and insurance would be about 1680. In the same building, one of the condos is currently available for rent, seemingly identical to the one for sale, and rents for 1350.
If rents rose at 5% per year and property taxes, insurance, and HOA dues stayed the same, it would take 5 years for the payments to be the same, provided that nothing in the purchased condo needed repairs.
Single family houses are a little different in that their prices haven't declined as much as condos, especially for nicer homes in more desirable areas. There's a much bigger differential there. A house in Ballard that sells for 500,000 would only rent for about 2250, but house payments would be more like 3250.
That would take a helluva lot more than 4 years to break even.
So yes, I think Zillow has a vested interest in promoting houses for sale. And they'll come up with studies to justify it.
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