Is Issaquah/Bellevue/Sammamish overpriced? (Seattle, Auburn: real estate market, 2014, rental)

[tiredtired]

I'm looking at houses and notice that the Issaquah/Bellevue/Sammamish areas seem to command the highest prices. They are so much higher there than everywhere else. I'm wondering if people think that they will appreciate less in the future because they are overpriced today? Or do you think that the area is deserving of high prices and they will appreciate handsomely in comparison to everywhere else?

[jjinla]

Compared to what? As long as Amazon and Microsoft continue to grow, well paid professionals are going to pay a premium for great schools and a nice commute. Seattle is projected to grow significantly in the coming years, so is there a bubble? Probably not, but it's not to say that appreciation won't slow down eventually.

You could save money and live in Auburn, but you'd have a crazy commute. And be in Auburn.

It's hard to say where will appreciate the fastest. There are no bargains here. Pick the best area you can afford closest to work and you should be fine.

[homesinseattle]

Tired tired. If you are seeking good schools, a reasonable commute and decent prices, look to Northshore School District (Bothell, Woodinville, Kenmore). On the other hand, if you can afford Bellevue, buy there. Where is your job?

[tiredtired]

Both my wife and I work in South Seattle. We used to live in Auburn (rented), now live in Maple Valley. Maple Valley is much nicer but I'm not happy with my home appreciation. It's slower than had I bought in Issaquah/Sammamish/Bellevue.

[homesinseattle]

Tiredtired. Sure, appreciation will always work like that. Maybe a good compromise would be Newport Hills. It is a bit more affordable and avoids that 405 I-90 bottleneck as you are heading south.

[mkarch]

Originally Posted by tiredtired

I'm looking at houses and notice that the Issaquah/Bellevue/Sammamish areas seem to command the highest prices. They are so much higher there than everywhere else. I'm wondering if people think that they will appreciate less in the future because they are overpriced today? Or do you think that the area is deserving of high prices and they will appreciate handsomely in comparison to everywhere else?

I don't think they're any more overpriced than the less expensive areas. The higher land value areas tend to hold their value better and are less prone to new development drastically changing the character of the neighborhood. People pay good money for that even if they aren't overly concerned with looks/image/status.

From a rental yield perspective, they're overpriced. But people typically don't buy in those areas for rental yield.

[Blondebaerde]

Originally Posted by tiredtired

I'm looking at houses and notice that the Issaquah/Bellevue/Sammamish areas seem to command the highest prices. They are so much higher there than everywhere else. I'm wondering if people think that they will appreciate less in the future because they are overpriced today? Or do you think that the area is deserving of high prices and they will appreciate handsomely in comparison to everywhere else?

They are priced higher because they're closest to tech centers, and somewhat-accessible to downtown (also a tech center). That being the big-boom business sector that is driving expansion, with no sign of slowing down to say the least.

That ups the demand on housing, quality of schools, infrastructure, and everything else by people making starting salaries at $100K plus and flying in from world-over. None of whom want to live in a ghetto. End game is what you see. Basic economics. Close friend of mine was plucked out of university in some god-forsaken corner of New South Wales (AUS) fifteen years ago, has worked for the same company every day since, and risen admirably. He just had a million-dollar semi-custom home completed last August 2014 in SAMM, alongside four others that were pretty similar on the same one or two acre lot. Case in point: his kids go to private school, he's bought cars, on and on. Virtuous economic cycle.

That-said, if it continues is a function of how well the tech sector in Seattle performs over, say, the next 20 years. A lot of businesses are betting heavily it will, and planning accordingly.

So yes, I'd bet on Eastside. And, in-fact, I have....not all that many years ago either. That property by-and-large seems a solid long-term growth asset.

[amaiunmei]

Originally Posted by tiredtired

Both my wife and I work in South Seattle. We used to live in Auburn (rented), now live in Maple Valley. Maple Valley is much nicer but I'm not happy with my home appreciation. It's slower than had I bought in Issaquah/Sammamish/Bellevue.

Issaquah & Sammamish & Bellevue are right smack dab in the middle of Microsoft Money Land; of COURSE they are appreciating faster!

Ditto with the inner Seattle neighborhoods (Cap Hill, Eastlake, Downtown & everything from Queen Anne to Ballard): those neighborhoods are just too close to thousands of jobs for the appreciation not to pile up.

You really can't compare a house on the edge of an urban area to a centralized location.

[Boxkicker]

Originally Posted by tiredtired

Both my wife and I work in South Seattle. We used to live in Auburn (rented), now live in Maple Valley. Maple Valley is much nicer but I'm not happy with my home appreciation. It's slower than had I bought in Issaquah/Sammamish/Bellevue.

And you would probably pay more if you had bought right by living in those places rather than Maple Valley?

I will never understand why people really care about home appreciation....a home is shelter.

If you are constantly trying to time the market, you will lose more than win! Selling a house is expensive even if the house appreciates. It means more excise tax, more commission, hassle of moving, etc...

Most people in Maple Valley are people who buy for the stability of a good school district and stay longer than most, therefore the housing here doesn't "appreciate" as much.

[Ira500]

Originally Posted by tiredtired

Both my wife and I work in South Seattle. We used to live in Auburn (rented), now live in Maple Valley. Maple Valley is much nicer but I'm not happy with my home appreciation. It's slower than had I bought in Issaquah/Sammamish/Bellevue.

Seems to me that if you're buying a house that you're living in, how well the area is going to appreciate should really take a back seat to your quality of life. The places that have lots of high paid employees are generally going to appreciate the most, but not always. If you like where you're living, and you plan on staying a while, is it worth a long commute for appreciation that might or might not happen? Just because a particular area has gone up in home prices more than another area doesn't mean that it will continue to do so. There are cycles in the real estate market where Maple Valley appreciates more than Bellevue, and there are (usually longer) cycles where Bellevue appreciates more. Right now the real estate market is pretty hot, but if you average it over 30 years, the appreciation rate of houses isn't spectacular. It usually does(over the long term) a little better than the rate of inflation. If you keep your house for 10 or 15 years, it'll probably be a decent investment whether the house is in Bellevue or Maple Valley. I say live where you will be happy, and don't worry about how fast it's appreciating.