Major Increase in Open House attendence today (Seattle, Renton: houses, buyers)

[Houstonian Elopers]

I am not sure how anyone can afford to buy a house in Seattle if they earn under 100k.

[wsugrad03]

Originally Posted by woody1234

I'd much rather pay a mortgage than pay rent! Why pay someone else and be guaranteed to lose your money? Even in a down market where your house is losing value, you are STILL better off buying in lots of situations. Consider the mortgage interest and property tax deductions and the fact that you're paying down your principal rather than throwing money at some landlord. Think about it...

And in response to the original post - yup, open house traffic will probably continue to increase for the next few months as people start looking to move before the summer.

This probably isn't the right thread for a financial discussion, but I see what you're saying. However, the real answer is: It depends! What I'm talking about is the point in time where you begin to actually make money off of owning a home vs. renting a home of equal size/location/value. There's a lot of calculators out there, like the following link....

Is it better to Buy or Rent?

Depending on your situation, it's sometimes much better to rent than buy. You need to look at the big picture of how your home is making you money (including tax benefits of owning). If I buy right now at $500,000 with $50,000 of my own money as a down payment, and next year the market takes a tumble and looses 10%, I just lost the value of my entire down payment. Where as if I waited a year and bought when the market is low again, I wouldn't have taken such a hit to my liquid assets.

Lets also consider the history of real estate in this area. Real estate always follows a stair step pattern. There's time of rapid growth, followed by an equal length of no growth and minor decline...then it spikes again. The times of decline are required for incomes to catch up with the rising costs. The problem with the last 6 years is Seattle has grossly appreciated many times higher than any point in its history. It resembles the spike in CO2 levels in the past 50 years....totally off the scale!

If history repeats itself, this latest spike will be followed by an equal length of flat or declining prices.

So with so much uncertainty, is it really a good time to buy? I'm not convinced. It depends on your situation and how long you're planning on living in the home. But everyone should do their own math and take their own risks.

Best of luck.

[ST CRoix To Seattle]

Originally Posted by Houstonian Elopers

I am not sure how anyone can afford to buy a house in Seattle if they earn under 100k.

Equity(sale Proceeds) from a previous property in our case....and 100k is plenty enough to buy in Seattle even 80k,just depends on how much or it you save for the downpayment

[swsha4]

Originally Posted by woody1234

I'd much rather pay a mortgage than pay rent! Why pay someone else and be guaranteed to lose your money? Even in a down market where your house is losing value, you are STILL better off buying in lots of situations. Consider the mortgage interest and property tax deductions and the fact that you're paying down your principal rather than throwing money at some landlord. Think about it...

And in response to the original post - yup, open house traffic will probably continue to increase for the next few months as people start looking to move before the summer.

Ah... but consider the other side of the coin. Many people in other areas are stuck with mortgages that are actually higher than the value of their home because they bought at inflated prices...and everyone says the prices here are terribly inflated. So could it happen here? I sure as heck would not take a chance on it. Renting gives me the option of moving whenever I want to.

If I buy a house and the market here tanks like it's doing everywhere else, well I'd end up having to sell it for less than I paid for it if I needed to move. That doesn't sound like a good deal to me!

[Ira500]

There's also a historical relationship between rents and mortgages..I think the long term figure is that a home prices averages 200 times the monthly rent for the same house, and right now in Seattle it's more like 320 times, so to get back to it's average, either home prices will have to drop, or rents will have to rise, or a combination. Right now a monthly rental payment is far, far lower than a mortgage payment.
Sometimes you just feel like you need to own a home...it doesn't have to make financial sense.

[70Ford]

Seattle home prices post decline (http://seattlepi.nwsource.com/local/356339_housing26.html - broken link)

Seattle home prices post decline.......

...... "close to double-digit" decline in the Seattle area, hitting bottom the first half of 2009.

[Ira500]

It wouldn't surprise me to see a double digit decline( from the peak) sometime in '09...Right now we're still at a standoff. Buyers are hearing about declines in other areas and lending standards have tightened, so there's far less buying.
A lot of sellers know what their houses "were worth" a year ago, and don't see why they should lower prices, and some realtors are advising them to hold firm on prices, as if that could stem the tide.
It doesn't mean you should or shouldn't buy. Inventory is high, so there's a lot to choose from, and if you're planning on staying in the house for 10 years, the price shouldn't make that much difference. And some people just don't feel whole until they own a house. In that case, just make sure you find a relative bargain to cushion you against price decreases.
At the moment, renting is still far less expensive.

[Chenebe]

In think when considering the buy or rent issue, one should think about mobility. It would be awful to be stuck trying to sell a house in a declining market when you had to be somewhere else. I am seeing on the Seattle market houses that have been on the market hundreds of days! (what is the average length of time a house is on the market over there anyway?) I am asking myself, what if we hated it there and want to go, and we had this house that was unsalable. What if we wanted to come back to our home country and we had sold our house (that we REALLY love) and couldn't find another that we like as much? And you can't always plan when to leave - it may be in a declining market, there may be a war for goodness sake (scarily, this isn't all that remote a possibility nowadays), or the next Great Depression. I thought I would be in my current house 10 years. Opportunity knocks elsewhere in 2 years.

I heard once that the time to think of selling is when you are buying. It is some what like trying to gaze into a crystal ball.

[woodinvilleguy]

IMHO;

All reasonable points. My personal feeling is that the housing issue will resolve itself before the next two years are up. If you want to be in a house less than two years, it is usually not a good idea to purchase a house since it will end up costing you more in a normal market. Of course all bets are off when we are in a crazy market like the last 5 years where house values jumped and jumped. There are always external factors but one thing to remember is that the Seattle job market is going to be stable and growing in the next 5-10 years. Microsoft continues to hire at a good clip, they have never had a lossing quarter, they like having employees in the Redmond area(They have major Redmond expansion plans underway) so they will continue to add well paying jobs to the market. Boeing has orders for Dreamliners to keep them busy for a number of years. And each of these companies have their own ecosystem of support companies that are needed to support them.

So I don't expect a great depression of 10 years to occur again. Are we in a recession? I say yes. It will be interesting times for the next year, for sure.

[Pittgal]

The house behind us has been for sale for 7 months..now down in price over 60,000. I feel bad for the people who own it, they have moved out already and are panicking!