Poll

Would you buy a house in the Greater Seattle area right now? (98203 area)

Sure, I'd buy in this market. It's going to keep going up.
2 (10%)
No way I'd buy in this market. We're in a bubble!
9 (45%)
I think you can still make a good deal in this market, but you gotta be careful.
9 (45%)

Total Members Voted: 20

Author Topic: Opinions on buying in this market? Just north of Seattle.  (Read 1062 times)

bigalsmith101

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Opinions on buying in this market? Just north of Seattle.
« on: August 28, 2017, 03:15:02 PM »
Hello everyone!

Last week our landlord gave us notice that our lease will not be renewed come October 14th. Our 1 bedroom, 1 bath unit will be utilized by his daughter in a time of need. Ergo, my wife and I, and lovely dog will now need to find a new place to live.

For the past 2 years, we've been saving a large portion of our income, and saving quite a bit of money. We've been preparing to buy a home, but with our current below market rent, it didn't make any sense for us to do so. Now, however, it could definitely make sense.

We live in Everett, Wa. 25 miles north of Seattle. Seattle is one of, if not the fastest growing large city per capita in the United States. Population is creeping north and south of Seattle, to try to avoid the drastic increases in real estate.(http://www.seattletimes.com/seattle-news/data/seattle-once-again-nations-fastest-growing-big-city-population-exceeds-700000/)

Currently, our rent is $850/mo. After utilities, we're just over $1k/mo.

Similar 1bd/1bth rentals in our area are $1050-1200/mo plus utilities.

As of right now, our current strategy is similar to this: Buy a small 2-3bed 1-2bth home, for under $300k. Mortgage after down payment will be about $1k-1500+utilities. Live in that home for several years, and when the market dips again in the future, rent it out and move into the home that will take us into our retirement. Or just stay in the home...

I guess my real question. How happy would you be to purchase a home in this market they way it sits right now? It's crazy to me, but the rental rates are so high, that I could easily buy a home and pay less on a 30yr mortgage that I would for rent....
« Last Edit: August 28, 2017, 05:30:40 PM by bigalsmith101 »
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SeattleCPA

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #1 on: August 29, 2017, 07:47:12 AM »
You may get advice to avoid this because people outside of Seattle area will assume you're in the really high price areas like truly in Seattle (e.g., Queen Anne or Madison Park or Capital Hill) or in expensive tech suburbs (e.g., Kirkland and Redmond). But I would think you're in far, far different market if you're in Everett... or really east Everett... or Lake Stevens.

P.S. I actually live in Redmond and have my CPA firm in downtown Redmond... but I grew in Everett and went to Lake Stevens High School.

P.P.S. If your mortgage payment will be less than your rent and you plan to live in the house you would buy for a long time, that seems like a pretty good option to consider.
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Cwadda

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #2 on: August 29, 2017, 07:49:32 AM »
Quote
If your mortgage payment will be less than your rent and you plan to live in the house you would buy for a long time, that seems like a pretty good option to consider.
This.

Very few people on this forum will understand your market. It's very difficult to give advice when we live across the country and have never even been 500 miles within your market.

bigalsmith101

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #3 on: August 29, 2017, 12:13:12 PM »
You may get advice to avoid this because people outside of Seattle area will assume you're in the really high price areas like truly in Seattle (e.g., Queen Anne or Madison Park or Capital Hill) or in expensive tech suburbs (e.g., Kirkland and Redmond). But I would think you're in far, far different market if you're in Everett... or really east Everett... or Lake Stevens.

P.S. I actually live in Redmond and have my CPA firm in downtown Redmond... but I grew in Everett and went to Lake Stevens High School.

P.P.S. If your mortgage payment will be less than your rent and you plan to live in the house you would buy for a long time, that seems like a pretty good option to consider.

I grew up in Lake Stevens and graduated at LSHS as well. You were probably there in the time of the Pink Palace. Nice!

We're looking closely at available homes currently. It should work out okay.

Thanks!
I spent the first 6 years of "real" life in a self imposed semi retirement, to secure a lifetime of stories. Now it's time to secure the next lifetime through the badassity of FI.

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SeattleCPA

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #4 on: August 30, 2017, 01:53:55 PM »
I graduated in 1977... so (I think) the second to last year the pink palace was used.

My maternal grandmother graduated from LSHS the first year the pink palace was used. Supposedly. (That was 1936 per wikipedia...)
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clarkfan1979

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #5 on: September 03, 2017, 07:22:17 PM »
I would definitely buy in Everett. I did a little research on Everett about 2 years ago because I applied for a job in the area. Yes, the market could go down short-term due to a bubble. However, I think long term there is nothing but gains for Everett due to urban sprawl from Seattle.

bigalsmith101

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #6 on: September 03, 2017, 09:07:09 PM »
I would definitely buy in Everett. I did a little research on Everett about 2 years ago because I applied for a job in the area. Yes, the market could go down short-term due to a bubble. However, I think long term there is nothing but gains for Everett due to urban sprawl from Seattle.

2 years ago was a good time to buy. Now, it's probably still a good time to buy, though homes are $50-90k more than they were in 2015! I'm slightly worried about the bubble, but overall, also believe the upward momentum is inevitable long term. Likely placing an offer on a home very soon.
I spent the first 6 years of "real" life in a self imposed semi retirement, to secure a lifetime of stories. Now it's time to secure the next lifetime through the badassity of FI.

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zinethstache

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #7 on: September 04, 2017, 10:32:40 PM »
We lived in Everett (Eastmont) for 15 years. I worked in Everett. We own three multi unit properties in Everett.

Here is my perspective. Our home sold for over double what we paid for it, and that is after it recovered from the 2008 crash. Our Rentals were purchased between 2012 to 2014. They have increased in value over 40% in that time.

For me, I would have to purchase further north to find a good value. Perhaps you could buy an older fixer, but the market in Everett is pretty insane.

Our home sold in June of 2016 for over list price, all three offers were over list in fact. I am very relieved to be out of that area because it is so overpriced.

Also where we lived had homes on large lots (our lot was .43 acres). We watched our view disappear when the 5 homes across the street on 3/4 to 1 acre got sold to a contractor, who built cramped up 2 story homes on tiny lots. Be prepared for more of this activity...

Final bit of advice, if you proceed to house hunt in Everett, Do NOT buy in unincorporated Snohomish County Everett (Silverlake Costo area), or you will pay double emergency services, in city AND Snohomish County. We did not know that and our property taxes were always 1k higher than those that were actually in the city limits.

Hope this helps! One a good note our rentals are doing awesome - always rented and they command top dollar.

We were careful where we purchased our rentals to ensure to avoid that problem.

bigalsmith101

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #8 on: September 04, 2017, 10:39:07 PM »
We lived in Everett (Eastmont) for 15 years. I worked in Everett. We own three multi unit properties in Everett.

Here is my perspective. Our home sold for over double what we paid for it, and that is after it recovered from the 2008 crash. Our Rentals were purchased between 2012 to 2014. They have increased in value over 40% in that time.

For me, I would have to purchase further north to find a good value. Perhaps you could buy an older fixer, but the market in Everett is pretty insane.

Our home sold in June of 2016 for over list price, all three offers were over list in fact. I am very relieved to be out of that area because it is so overpriced.

Also where we lived had homes on large lots (our lot was .43 acres). We watched our view disappear when the 5 homes across the street on 3/4 to 1 acre got sold to a contractor, who built cramped up 2 story homes on tiny lots. Be prepared for more of this activity...

Final bit of advice, if you proceed to house hunt in Everett, Do NOT buy in unincorporated Snohomish County Everett (Silverlake Costo area), or you will pay double emergency services, in city AND Snohomish County. We did not know that and our property taxes were always 1k higher than those that were actually in the city limits.

Hope this helps! One a good note our rentals are doing awesome - always rented and they command top dollar.

We were careful where we purchased our rentals to ensure to avoid that problem.

I understand the home value insanity. That being said, the rental market is GREAT like you mentioned. I recently saw a 3 bed, 1 bath home listed. It has a 400sqft, 1bed/1bath mother in law attached to the detached garage. The 1bd rents for $700/mo, the 3bed 1bath home for $1450, both under market rates. It could be 800 + $1600. Nearly .008% of purchase price. About as good as Everett gets (from what I've seen right NOW).

Well played on your multi unit properties. 2010-2014 was the right time to buy.
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zinethstache

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #9 on: September 05, 2017, 10:57:36 PM »
Our one bedroom units with street parking rent for $750(very small 70s decor no DW, shared laundry) and $995 (nice historical detail, updated inside, DW shared laundry) - DH and I let the PMs do market analysis and they are getting phenomenal rents on one year leases.

bigalsmith101

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #10 on: September 05, 2017, 11:02:21 PM »
Our one bedroom units with street parking rent for $750(very small 70s decor no DW, shared laundry) and $995 (nice historical detail, updated inside, DW shared laundry) - DH and I let the PMs do market analysis and they are getting phenomenal rents on one year leases.

Absolutely. There is real money in the rental game in Everett. Buying at the right price is key. It can be hard these days. I like your margins!
I spent the first 6 years of "real" life in a self imposed semi retirement, to secure a lifetime of stories. Now it's time to secure the next lifetime through the badassity of FI.

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Roland of Gilead

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #11 on: September 06, 2017, 08:58:33 AM »
Do you really like tweakerville...I mean Everett?   Admittedly we went there all the time to launch our sailboat at the Port of Everett awesome boat launch (they have like 12 ramps!).  I guess it is only certain parts of Everett that are sketch like most other cities.

If you are willing to go east on Hwy 2 a bit, homes are somewhat cheaper.   Hwy 2 can get annoying though.   Our house was *way* out on Hwy 2, on a river, 3,000 to 5,000 sq-ft depending if you count the indoor pool and we sold it last year for $280k.

bigalsmith101

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #12 on: September 06, 2017, 09:11:44 AM »
Do you really like tweakerville...I mean Everett?   Admittedly we went there all the time to launch our sailboat at the Port of Everett awesome boat launch (they have like 12 ramps!).  I guess it is only certain parts of Everett that are sketch like most other cities.

If you are willing to go east on Hwy 2 a bit, homes are somewhat cheaper.   Hwy 2 can get annoying though.   Our house was *way* out on Hwy 2, on a river, 3,000 to 5,000 sq-ft depending if you count the indoor pool and we sold it last year for $280k.

Haha. Everett, depending on where you live, can have the whole spectrum of characters and personalities. Definitely there are some homeless and addicts, but they are centered well away from the neighborhood we're looking at.

As for living east along Highway 2, the commute is a deal breaker. Right now I'm 4-8min from I-5, and we're 2.5mi to my wife's work.

We both grew up in Lake Stevens, and even the Trestle is bullshit traffic during the whole range of commuting hours.

How far out Hwy2 were you?  Was your home in slight disrepair that it sold for $280k? Or were you out past Goldbar in Skykomish or Index? Monroe is exploding, Goldbar is growing and it's all nutty.
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Roland of Gilead

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Re: Opinions on buying in this market? Just north of Seattle.
« Reply #13 on: September 06, 2017, 09:25:26 AM »
We were in Sultan and yes it was in slight disrepair although nothing really horrible.  The new owners got a bargain and we were able to sell it in buy owner in one day with no real estate commission (after I got quite a few big estimates on the repairs that would be needed to bring it up to the market condition that realtors wanted so they could quickly get their 6% of a larger figure).

Sultan is like the red headed stepchild though.   A dying town amid the growth of Monroe and Goldbar.   Must be something in the water.