Author Topic: Seattle Real Estate Noob  (Read 3199 times)

HockeyMan

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Seattle Real Estate Noob
« on: August 14, 2018, 09:48:08 PM »
Hi all,

I'd love to get into Seattle Real Estate investment, but admittedly, am a bit hesitant to enter the market as I don't understand it well. Ideally, I'd like to start by finding a duplex; live in half, rent half. I'm also open to a single-family rehab.

I'm hoping to find someone that I can learn from - a Seattle mentor. I'm willing to help you in any way that I can in exchange for guidance; be that finding new deals for you, doing some free manual labor, ect...

A bit about myself - new to Seattle, college grad, tech manager, well on my way to FI. I'm tired of renting, and would like to put that money to work.

Thanks in advance!

Jon Bon

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Re: Seattle Real Estate Noob
« Reply #1 on: August 15, 2018, 11:26:54 AM »
I can just leave this here...... Just so you know the Low was 128, and currently about 260.

FWIW I too am a (small time) real estate investor, butt he valuations on some of these properties is batshit crazy!

Source: https://us.spindices.com/indices/real-estate/sp-corelogic-case-shiller-20-city-composite-home-price-nsa-index


SeaWA

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Re: Seattle Real Estate Noob
« Reply #2 on: August 15, 2018, 01:06:08 PM »
I won't profess to know what the future will hold, and I won't argue that these charts tell us what the future will hold.

But if you're going to share that index time series, then at least add the Seattle data against the 20 city average so he can see that the Seattle ratio is even more extreme :)



Jon Bon

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Re: Seattle Real Estate Noob
« Reply #3 on: August 16, 2018, 06:30:45 AM »
Lol, that is fair!

Yes some markets are just insane, investing in something that is that highly valued on margin feels beyond my risk tolerance. Case Schiller of course counts all houses, not just good houses in good neighborhoods. So the dumpy houses that show zero appreciation bring down the average. I feel (notice emotion and not fact) that Seattle is approaching 2006 Las Vegas, or Miami territory.

Just a single case, In my good sized Midwestern city values in a good neighborhood are 2-3x what they were 5-10 years ago. A decent house in a good neighborhood can still be had for 400k.

Now Seattle probably had a much higher starting point, so the 2-3x appreciation over 5-10 years would put that house at a much higher valuation. It just feels like putting way to many eggs in one basket for a young investor. That is of course ignoring past performance (which I dont think one should do)


SeaWA

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Re: Seattle Real Estate Noob
« Reply #4 on: August 16, 2018, 03:49:48 PM »
Hi Jon Bon

Property is still crazy in Seattle. A common measure of rental property performance is the % of the value of the house commanded by rent. The common heuristic is 1% per month.

I haven't heard of anyone in Seattle getting a monthly rent of 1% of the value of the house that people in the midwest talk about, and the Deeper Pockets people talk about so much.

I have a SFH rental property in Seattle. It is in a A neighborhood and currently the monthly rent is .41% of the *current* value of the house.

I'm looking for another property in the area too, but I think it will be extremely hard to find a property that rents even for .5% of the value of the house. To me this means that when one buys they are speculating on house price increases, not investing in a revenue stream.

I don't have any knowledge about what the future of the Seattle real estate market will hold, so I'm just looking for properties where the rent can cover the PITI, and I consider carefully how much I put in Seattle real estate vs. the market.

I've got no guarantee that I'm making optimal allocations!
 

Jon Bon

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Re: Seattle Real Estate Noob
« Reply #5 on: August 16, 2018, 04:37:10 PM »
Hi Jon Bon

Property is still crazy in Seattle. A common measure of rental property performance is the % of the value of the house commanded by rent. The common heuristic is 1% per month.

I haven't heard of anyone in Seattle getting a monthly rent of 1% of the value of the house that people in the midwest talk about, and the Deeper Pockets people talk about so much.

I have a SFH rental property in Seattle. It is in a A neighborhood and currently the monthly rent is .41% of the *current* value of the house.

I'm looking for another property in the area too, but I think it will be extremely hard to find a property that rents even for .5% of the value of the house. To me this means that when one buys they are speculating on house price increases, not investing in a revenue stream.

I don't have any knowledge about what the future of the Seattle real estate market will hold, so I'm just looking for properties where the rent can cover the PITI, and I consider carefully how much I put in Seattle real estate vs. the market.

I've got no guarantee that I'm making optimal allocations!

Yeah Id never dream of investing in Seattle. Its not like folks are paying $8,000 in rent a month on an 800k home. (unless they are?!)

Here  I used to be able find 1% houses all day, but things have gotten to about .8% at best, so i'm just sitting here me and my cash pile, waiting for the next recession......


Syonyk

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Re: Seattle Real Estate Noob
« Reply #6 on: August 16, 2018, 05:08:29 PM »
Its not like folks are paying $8,000 in rent a month on an 800k home. (unless they are?!)

https://seattle.craigslist.org/search/apa?min_price=5000&availabilityMode=0&sale_date=all+dates

They're up close to that, yes.  Though the homes are probably past $1M.

It's a crazy place to invest.  Step one seems to be have a suitcase stuffed with cash, and a willingness to say, "I wave all inspections, I'm bidding $100k over asking, here's a suitcase of cash!"

If you're not that person, well... that person will outbid you, every time.

Jon Bon

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Re: Seattle Real Estate Noob
« Reply #7 on: August 16, 2018, 05:37:08 PM »
Its not like folks are paying $8,000 in rent a month on an 800k home. (unless they are?!)

https://seattle.craigslist.org/search/apa?min_price=5000&availabilityMode=0&sale_date=all+dates

They're up close to that, yes.  Though the homes are probably past $1M.

It's a crazy place to invest.  Step one seems to be have a suitcase stuffed with cash, and a willingness to say, "I wave all inspections, I'm bidding $100k over asking, here's a suitcase of cash!"

If you're not that person, well... that person will outbid you, every time.

Somehow this feels familiar...... but it was so long ago I dont think anyone remembers.........

Syonyk

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Re: Seattle Real Estate Noob
« Reply #8 on: August 16, 2018, 07:29:34 PM »
Somehow this feels familiar...... but it was so long ago I dont think anyone remembers.........

We fixed that once and for all with the bailouts.  It'll never happen again. :p

HockeyMan

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Re: Seattle Real Estate Noob
« Reply #9 on: August 18, 2018, 10:17:07 AM »
Thanks for this thoughts this week, all!

I too recognize the trends in the Seattle Real Estate market, but I think I struggle with trying to time it. I'm going to be living in Seattle for the next 2-3 years minimum so the question I constantly ask myself is this, "Do I continue to rent and spend ~1.5k a month (54K over next 3 years) and have nothing to show for that money spent?

Looking outside of Seattle proper, Real Estate is cheaper, but still high compared to other markets. For example, duplexes in Bremerton can be had for ~350k compared to 750k in Seattle proper. Houses are cheaper north and south of the city and accessibility to downtown is getting easier as the light rail system expands.

sol

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Re: Seattle Real Estate Noob
« Reply #10 on: August 18, 2018, 01:04:08 PM »
"Do I continue to rent and spend ~1.5k a month (54K over next 3 years) and have nothing to show for that money spent?

Does that house cost more than $300k?  If it does, then yes you should continue to rent.

The math is a little more complicated once you start figuring in insurance and interest costs vs your monthly gross rents after maintenance expenses, but as a general rule of thumb where I live, SFRs tend to rent for approximately 0.5% of their sale price per month.  So a $300k house (which probably isn't very nice, at that price) would rent for about $1500/mo.  Depending on your mortgage it should generate a few hundred dollars in positive cash flow in months without major maintenance expenses, and then once every few years you'll drop $2k on a major expense like a new furnace.  Most people aren't making very much money on SFR rentals around here outside of the capital appreciation.

Which is why I understand the game looks so lucrative in places like Seattle.  A landlord might have to invest $50k of capital to buy a property that only produces $1000 per year of cash profit (pretty terrible), but that property might also increase in value by $30k-50k in that same year.  The problem is that you can't spend that capital value increase until you sell, and when you sell you lose all future capital value increases.  So most of us are just sitting on our properties, making a few thousand dollars per year in rental profits in exchange for having hundreds of thousands of dollars tied up in real estate, and then watching our imaginary zillow values go up by $20k per month. 

At some point you have to bite the bullet and sell them, while the market is still hot, but it's hard to cash out when the imaginary values are going up so fast.  Under normal circumstances I'd be thrilled to lock in a 20% per year growth rate on a normal investment, but then where are you going to put the money instead?  When the stock market surges 20% in a year, you don't sell it all and find something else to invest in, right?  You ride it out, accepting that huge gains will average out with huge losses, and you'll eventually turn a normal profit.  That's where I'm at today.  We're riding high, but expecting losses to come our way eventually.

And I'm certainly not buying any new real estate at today's valuations.  The only decision I face is how long to white-knuckle along until I sell.

kenmoremmm

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Re: Seattle Real Estate Noob
« Reply #11 on: August 20, 2018, 01:17:34 PM »
data point: we sold a 3bd, 3.25ba townhouse in may this year.
list: $675k
sale: $790k
rent at the time just before listing it: $2300 (could've gone up to $2500)

rental market is in the middle of softening, a lot.

bidding wars have effectively ended.

houses now sit on the market for a little period.

a few basis points on the interest rates + the proposed, and failed, head tax, have all had a huge impact in a very short time period.

HockeyMan

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Re: Seattle Real Estate Noob
« Reply #12 on: August 20, 2018, 04:08:55 PM »
Very true - volatile market, indeed.

Let it also be known, I've shifted my searches to Bremerton. It is blue collar with a major naval base nearby. Comparable houses are selling for 40% of the price that they'd list for in Seattle. Also of note, Bremerton is launching 2 additional passenger ferries, cutting the Seattle commute time from 55 to 30 minutes.

kenmoremmm

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Re: Seattle Real Estate Noob
« Reply #13 on: August 20, 2018, 05:46:24 PM »
bremerton had a huge run up in prices as kitsap was ID'd as affordable and commutable. it has been said that when the market corrects, the burbs and outlying areas retract the most.

that said, i would much rather live further from seattle than close to it if you can make the commute work.

cloudsail

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Re: Seattle Real Estate Noob
« Reply #14 on: August 21, 2018, 12:56:15 AM »
As someone who had to buy a house close to Seattle downtown to live in last year (work, kids, etc...), the Seattle real estate market scares me shitless every time I think about it.

I try not to think about it.

sol

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Re: Seattle Real Estate Noob
« Reply #15 on: August 21, 2018, 08:35:48 AM »
As someone who had to buy a house close to Seattle downtown to live in last year

So you're a multimillionaire?  cool.

calimom

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Re: Seattle Real Estate Noob
« Reply #16 on: August 21, 2018, 10:19:14 AM »
A forum member posted this Seattle duplex for sale a few months ago and appears to still be on the market with a price reduction. I like the layout and as little as I know Seattle, I think it's a good location. Check it out:

https://www.faira.com/listings/WA/Seattle/98199/3811-23rd-Ave-W/11937

cloudsail

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Re: Seattle Real Estate Noob
« Reply #17 on: August 21, 2018, 12:29:09 PM »
As someone who had to buy a house close to Seattle downtown to live in last year

So you're a multimillionaire?  cool.

Lol, by close I mean ten minute drive or 20 minute bus ride, not actually in downtown. I'm actually where the duplex that calimom just mentioned is, in Magnolia. You can sometimes find cheaper properties here because it's not very convenient to I-5. It's a beautiful area though. Too bad it's still too expensive to retire in :(

SeaWA

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Re: Seattle Real Estate Noob
« Reply #18 on: August 22, 2018, 12:07:55 PM »
Let it also be known, I've shifted my searches to Bremerton. It is blue collar with a major naval base nearby. Comparable houses are selling for 40% of the price that they'd list for in Seattle. Also of note, Bremerton is launching 2 additional passenger ferries, cutting the Seattle commute time from 55 to 30 minutes.

The passenger ferries are the key to living in Bremerton.

I have lived in Bremerton before, though it was many years ago. I've done the Bremerton to Seattle commute every morning. I have family that have been there for 50 years and I visit family in Bremerton many times a year. They ferry is the key to all of it.

In the 1990s there was a passenger only ferry that cut the commute from Bremerton to downtown Seattle to 30 min. It was packed every workday morning.  A couple of small businesses opened in downtown Bremerton. Eventually that state-run ferry stopped running due to a couple of lawsuits about size of wake, and Bremerton suffered. The businesses closed, and housing prices suffered.

In the years since then the town has recovered somewhat, but it could use more businesses and better paying jobs outside the shipyard. That said, it is a beautiful area with great parks, quiet streets, and access to the Olympic peninsula.

In the last year I have had 4 colleagues or friends move from Seattle to Bremerton. People are starting to mention Bremerton as a suburb of Seattle for the first time in my memory. The traffic in Seattle continues to stagnate, and housing prices continue to outpace wages. It would be a huge boon for Bremerton if high wage earners flee Seattle to join the tax roles of Kitsap County.

Good luck!

sol

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Re: Seattle Real Estate Noob
« Reply #19 on: August 22, 2018, 01:05:59 PM »
They ferry is the key to all of it.

It sure worked for Bainbridge Island, which has effectively become a bedroom community for wealthy downtown Seattle workers.  I'm not sure why Bremerton hasn't seen the same kind of soaring RE values.

Not that I'm complaining.  All of those military dock workers need somewhere to live, and NBK doesn't have anywhere near enough on-base housing for all of them.

It's possible that it's the military deliberately suppressing the influx of Seattle money?  With money comes scrutiny, and there are a lot of things happening on the Kitsap Peninsula that Uncle Same doesn't necessarily want publicized.

Samuel

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Re: Seattle Real Estate Noob
« Reply #20 on: August 22, 2018, 01:21:51 PM »
I try not to think about it.

That's my strategy. Unfortunately I'm not in the homeowner category so I'm just trying to ignore the boat sailing away without me. Somehow no matter how much I boost my income the market just surges even farther out of reach.

With the slight cooling we've seen recently I've started to tune in again but now I also get to worry about the other worst case scenario: stretching too far to get into a place just in time for an economic downturn.


Lol, by close I mean ten minute drive or 20 minute bus ride, not actually in downtown. I'm actually where the duplex that calimom just mentioned is, in Magnolia. You can sometimes find cheaper properties here because it's not very convenient to I-5. It's a beautiful area though. Too bad it's still too expensive to retire in :(

Wait until the Magnolia bridge is condemned with no plan to replace it, then the "inconvenient" egress from Magnolia will become "brutal".

Sorry, this topic reliably turns me into a downer. Back to blissful ignorance...

SeaWA

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Re: Seattle Real Estate Noob
« Reply #21 on: August 22, 2018, 01:45:34 PM »
They ferry is the key to all of it.

It sure worked for Bainbridge Island, which has effectively become a bedroom community for wealthy downtown Seattle workers.  I'm not sure why Bremerton hasn't seen the same kind of soaring RE values.

Bainbridge is a different beast. Sol, maybe you've been in Seattle a long time and I'm telling you something you already know, so no offense if this is all old news to you...

To the OP-- Bainbridge is not blue collar. It is where my corporate lawyer lives. They don't have any manufacturing to speak of, no PSNS (Puget Sound Naval Shipyard), no Bangor (Naval nuclear submarine base). It is lawyers and bankers that commute from their island to downtown Seattle.

Bainbridge has schools that are the envy of the peninsula, great natural beauty, and low crime. The school levy always passes, and they even voluntarily raise their taxes higher than the state minimum so that they can invest in their local public schools by providing computer science programs and extracurricular activities. Frankly, so long as you are wealthy, it is a great place to live. It is not, however, very ethnically diverse. Politically it is a mix of mostly liberals and a few staunch republicans. In Kitsap County (Bremerton) the school levy does not sail through the voters, and you'll see more Trump signs on one street that you would in an entire neighborhood in Seattle.

Let me put it this way: when I was in H.S. and took the Bremerton ferry it was dirty and people were gruffly and racing to get in line for beer. When I took the Bainbridge ferry there was often, and I kid you not, a string quartet playing on the interior passenger deck. Sure, it was kids from the local H.S., but still... what a difference.

A small point of local history that sticks with me: it was a couple of waterfront homeowners on Bainbridge Island that sued the state to slow the passenger only ferry between Seattle and Bremerton. That lawsuit, after many years, and twists and turns, eventually contributed to the cancellation of the fast passenger only ferry between Bremerton and Seattle. The name of the area where the Bainbridge homeowners lived? Rich Passage. Go figure.

sol

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Re: Seattle Real Estate Noob
« Reply #22 on: August 22, 2018, 02:02:23 PM »
To the OP-- Bainbridge is not blue collar. It is where my corporate lawyer lives.

Right, but why is BI so fancy and Bremerton isn't?  They're both a short ferry ride from downtown Seattle, and BI wasn't always an enclave of elitism.  It used to be rural farmland just like everywhere else on the peninsula, but for some reason rich folks started walling themselves up there and not around Bremerton.

Maybe because the BI ferry is a little shorter ride?  If that's the only reason, then Bremerton should start seeing growth just like Lynwood/Mukilteo/Marysville have, as people are willing to increase their commute to get more affordable housing.

cloudsail

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Re: Seattle Real Estate Noob
« Reply #23 on: August 22, 2018, 09:07:36 PM »

Wait until the Magnolia bridge is condemned with no plan to replace it, then the "inconvenient" egress from Magnolia will become "brutal".


Yeah, no kidding. That's something else I try not to think about.

There's a reason why Magnolia is sometimes known as "Mongolia".

cloudsail

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Re: Seattle Real Estate Noob
« Reply #24 on: August 22, 2018, 09:10:31 PM »
A small point of local history that sticks with me: it was a couple of waterfront homeowners on Bainbridge Island that sued the state to slow the passenger only ferry between Seattle and Bremerton. That lawsuit, after many years, and twists and turns, eventually contributed to the cancellation of the fast passenger only ferry between Bremerton and Seattle. The name of the area where the Bainbridge homeowners lived? Rich Passage. Go figure.

That's really fascinating, thanks for sharing. I'll have to file that away as an interesting party topic.

SeaWA

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Re: Seattle Real Estate Noob
« Reply #25 on: August 22, 2018, 09:17:17 PM »
To the OP-- Bainbridge is not blue collar. It is where my corporate lawyer lives.

Right, but why is BI so fancy and Bremerton isn't?  They're both a short ferry ride from downtown Seattle, and BI wasn't always an enclave of elitism.  It used to be rural farmland just like everywhere else on the peninsula, but for some reason rich folks started walling themselves up there and not around Bremerton.

Maybe because the BI ferry is a little shorter ride?  If that's the only reason, then Bremerton should start seeing growth just like Lynwood/Mukilteo/Marysville have, as people are willing to increase their commute to get more affordable housing.

TLDR:
Puget Sound Naval Shipyard (PSNS) was established in Bremerton in 1891 and has been the economic core since. In the last 60-70 years that has ensured comparably lower-income wages, low-income naval housing, and put it on a path to slower growth than BI, and other Seattle suburbs, which transformed from rural directly to suburb, then wealthy suburb without an industrial albatross. If Bremerton does begin to serve as a Seattle suburb it will be because the county consistently provides reliable ferry services to Seattle and begin to meet the needs of more affluent Seattle commuters. In such a case the ROI on RE in Bremerton may beat other Seattle bedroom communities.

Longer version:
In my opinion the shorter ferry ride is a tremendous recent improvement to the community of Bremerton. However, it is run by Kitsap County, not Washington State. Currently there are only 3 boats from Bremerton to Seattle in the mornings, and they are sold out a month in advance. Clearly a passenger ferry it won't transform Bremerton into BI, but it could present characteristics similar to the neighborhoods SOL mentioned: Lynwood/Mukilteo/Marysville.

If Bremerton were a blank slate, then perhaps the ferry ride time would put it on more equal footing to Lynwood/Mukilteo/Marysville.  In my opinion there is 60+ years of economic and cultural history creating path dependency for each community. Past choices manifest in divergent communities, which attract different home buyers, exasperating the economic differences.

Bremerton has some affluent enclaves, but also has entrenched poverty, small tax base, and marginal social services. PSNS and naval housing will ensure that there is a continuous low-income population in Bremerton. People living in Bremerton for short periods, such as naval families, will continue to vote against raising taxes to invest in schools, infrastructure and businesses that could provide faster growth. That's a structural impediment to growth.

Additionally, there are legacy issues which the community must overcome. Bremerton does not have a broad economic base of business- it relies upon PSNS and commuting to Seattle. The Bremerton housing stock is older, and many are poorly maintained. Even if you live in one of the affluent communities within Bremerton your community tax base and voting patterns are those of a poor community that votes for low levels of taxation and resulting low levels of infrastructure and community services. That is a different culture than affluent bedroom communities of Seattle, and culture clash is real.

Today Bainbridge Island has better schools, better roads, better services, wonderful and expensive grocery stores, lower crime, higher incomes, and a better proximal environment. The houses are modern and well maintained because the population has disposable income. These desirable characteristics attract more wealthy people, driving up prices. The wealthy people have more disposable income and vote for higher taxes, then use taxes to create better infrastructure and community services, which increase real estate prices thereby contributing to the exclusiveness of BI. In my experience, BI can also be shockingly elitist, racist and unwelcoming. These characteristics are not unique to BI, but it is also not a utopia.

What does the OP want? If the OP is speculating on real estate appreciation, then Bremerton presents a lower cost of entre, and may present a faster rate of appreciation *if* Bremerton does begin to serve as a Seattle suburb and begins to gentrify. To me, this may occur *if* Bremerton can consistently provide reliable ferry services much more frequently to Seattle, and begin to meet the needs of more affluent Seattle commuters. Remember, this is the county providing the ferry, not the state, as is the case in most of the Puget Sound.

If I were the OP, then I'd also look at the immediate suburbs that SOL mentioned: Lynwood/Mukilteo/Marysville. I'd also look at West Seattle, White Center, and Renton. I'd look quite closely at Shoreline as close as possible to the projected light rail station. None of these suburbs will have the low level of entre as Bremerton, but the also won't rely upon overcoming the entrenched problems of Bremerton while simultaneously having Kitsap County successfully operating a ferry service to Seattle. That said, if Bremerton pulls it off, then the ROI may beat other Seattle bedroom communities.
« Last Edit: August 22, 2018, 09:26:20 PM by SeaWA »

lhamo

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Re: Seattle Real Estate Noob
« Reply #26 on: August 22, 2018, 11:30:49 PM »
If I were investing, I would also be looking at Shoreline/Lynnwood/Mountlake Terrace near the light rail expansion sites.  Esp.  MT -- for some reason (I'm guessing schools), houses there seem to be substantially underpriced compared to the rest of the North end suburbs.

My sister almost bought a condo in Magnolia last year -- is very happy now that she ended up on Queen Anne instead.  She is within walking distance of her office.  Her life quality has improved greatly.

clarkfan1979

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Re: Seattle Real Estate Noob
« Reply #27 on: August 24, 2018, 12:38:47 PM »
Consistent with MMM philosophy if you are in Seattle to gain valuable work experience that is not available in other areas or you are there for personal relationships, ok. However, if you are in Seattle because you are simply making 25% to 50% more than other LCOL areas, it's probably not worth it.

If you need to stay in Seattle, your best bet to reduce housing is to get roommates.

I applaud your willingness to try and hack the Seattle housing market. However, I just don't see it happening.

When you shop for housing your competition will be couples that both work in tech and make about 250K to 350K total.

I have a few friends that live in Seattle. One of them bought in 2012 and the other in 2014. Both could not afford to buy at 2017-2018 prices.

My 3rd friend moved there in 2016 and gave up on looking at houses last year in 2017. He sold his house in Colorado and had about 250K of liquid capital. His max budget was a 600K house plus 100K worth of renovations. He couldn't find anything in that price range in 2016 to 2017. In 2018 it's even more expensive. When he gave up last year he just decided to put it all in the market and watch the gains. He is single, which makes it more difficult.

I was living in So Cal in 2006 and finishing up a MA program. I wanted to do a Ph.D. program in So Cal, but the housing cost made it very difficult. I ended up going to Fort Collins, CO and bought a house near Colorado State University for 182K. It's a rental and now worth about 375K.

My first job offer after Ph.D. in Colorado was in DC with a starting salary of 67K in 2011. The housing market was still strong in DC because of the government jobs. I declined the job and took a job in Florida for 40K. I bought a house for 95K. It's also a rental and now worth about 250K.

I recently purchased a primary home in Hawaii for 603K. The reason this was possible was because I bought homes in LCOL areas over the past 10 years. I only moved to a HCOL area after I had enough money to buy a house.

If you are interested in building wealth, HCOL areas like Seattle are not going to be your best bet for a young single person.




cloudsail

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Re: Seattle Real Estate Noob
« Reply #28 on: August 24, 2018, 06:35:31 PM »
If I were investing, I would also be looking at Shoreline/Lynnwood/Mountlake Terrace near the light rail expansion sites.  Esp.  MT -- for some reason (I'm guessing schools), houses there seem to be substantially underpriced compared to the rest of the North end suburbs.

My sister almost bought a condo in Magnolia last year -- is very happy now that she ended up on Queen Anne instead.  She is within walking distance of her office.  Her life quality has improved greatly.

Agreed, one of my husband's coworkers has a number of investment properties in Shoreline, precisely because of the light rail expansion. But houses aren't really cheap there either. Heck, even houses in the same complex as my rental property in Bothell are going for over 600k. It's crazy.

We paid off the mortgage on that house many years ago. I had no idea it would ever appreciate so much. Some members of this board would probably be shaking me to take out the equity and invest it.

SeaWA

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Re: Seattle Real Estate Noob
« Reply #29 on: August 24, 2018, 11:22:55 PM »
I don't rely upon anyone on the internet to know what they are talking abut. I try to get the data and do my own analysis. That said...

I went to the FHFA site to get some data to answer the question about rates of increase (and decrease) in RE value between Seattle and Bremerton. You can get the data here: https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index-Datasets.aspx#mpo Please download the data and use it to answer questions you may have about the relative rates of increase (decrease) between Seattle and Bremerton.

To that end I've created two charts that may prove insightful. First is an indexed home value time series with quarterly data between 1990 and Q1 2018. This shows the relative increase RE value. This chart provides data to help answer the question: Would a $100 investment in RE, made in 1990, have done better in Seattle or Bremerton?

Second, I've created the same time series chart with absolute data. This shows the difference in RE prices between Seattle and Bremerton and how they have grown. These data help to answer the question: How much does RE cost in Seattle and Bremerton, and how has that changed over the last 30 years?

These data suggest that the Bremerton housing market matched the Seattle market in relative run-up of prices and decrease during the 2008 recession. However, the Seattle market has experienced a higher rate of growth since 2008. If these data were interpreted as a pattern, then they suggest review of other Seattle suburbs to investigate if suburbs decrease in value with Seattle, but do not match increases in growth. Such a conclusion would suggest investment strategies that prioritize Seattle, or suburbs, depending on the cycle of appreciation of real estate prices.

Paul der Krake

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Re: Seattle Real Estate Noob
« Reply #30 on: August 25, 2018, 12:03:51 AM »
I too recognize the trends in the Seattle Real Estate market, but I think I struggle with trying to time it. I'm going to be living in Seattle for the next 2-3 years minimum so the question I constantly ask myself is this, "Do I continue to rent and spend ~1.5k a month (54K over next 3 years) and have nothing to show for that money spent?
Where and how small of an apartment in Seattle do you rent for only 1.5k?

lhamo

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Re: Seattle Real Estate Noob
« Reply #31 on: August 25, 2018, 12:18:57 AM »
I too recognize the trends in the Seattle Real Estate market, but I think I struggle with trying to time it. I'm going to be living in Seattle for the next 2-3 years minimum so the question I constantly ask myself is this, "Do I continue to rent and spend ~1.5k a month (54K over next 3 years) and have nothing to show for that money spent?
Where and how small of an apartment in Seattle do you rent for only 1.5k?

Quite a few 1brs in that price range in North gate/Lake City on CL, and even some 2brs for not much more. If you commute when the express lanes are open the bus only takes about 15 minutes from the Northgate transit center to downtown.

Samuel

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Re: Seattle Real Estate Noob
« Reply #32 on: August 27, 2018, 11:09:19 AM »
I too recognize the trends in the Seattle Real Estate market, but I think I struggle with trying to time it. I'm going to be living in Seattle for the next 2-3 years minimum so the question I constantly ask myself is this, "Do I continue to rent and spend ~1.5k a month (54K over next 3 years) and have nothing to show for that money spent?
Where and how small of an apartment in Seattle do you rent for only 1.5k?

There are still some deals around, but it takes diligence, time, and luck to find and secure them. There are definitely no deals to be had in the corporate apartment buildings that are easiest to find and apply to, you have to think smaller and be ready to pounce.

I'm in a 700ish SQ 1 BR on West Queen Anne/Interbay for $1250 (plus utilities). It's a 10 unit building still owned by the same guy that built it in 1982. The landlord just seems to value having trouble free tenets over maximizing his returns. There's not much turnover, I think 2 units in the 4 years I've been here? It's somewhat dumpy as nothing has been replaced or updated unless it broke beyond repair, but it's pretty quiet and I keep it clean and tidy so it's good enough for me.

Found it on Craigslist an hour after it was posted on a Friday afternoon, stopped by an hour later on the way home from work and filled out an application on the spot. They had 12 people show up to an open house the next day but gave it to me for being first and meeting (and well exceeding) their requirements.
 

HockeyMan

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Re: Seattle Real Estate Noob
« Reply #33 on: August 27, 2018, 09:25:17 PM »
Actively diving into all of the data that you all included! Super interesting and helpful!

Regarding my rent, I'm in a brand new apartment close to Green Lake currently. Not too expensive.

In the short term, my girlfriend and I have decided that we're going to move in together and continue to rent. This will likely save us each about $700 a month in rent. I'll continue to look for deals in Seattle, but in no hurry now. I'll wait for a market correction or the inevitable relocation.

Thanks again, all!!!

Monk

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Re: Seattle Real Estate Noob
« Reply #34 on: August 24, 2019, 07:25:50 PM »
It's one year later and I'm curious to hear any 2019 updates from contributors here. 

My wife and I are in a 1br apartment in Green Lake / Roosevelt for $1275 (an old gem single owner like Samuel mentioned above) and have a 10 mo. old now so our timeline here is coming up, we're thinking another year max in the 1br.  She works  in Westlake (downtown-ish) and I work up north.  We were unable to buy a house in 2017 in Shoreline despite bidding $100k over . . . (we waived all contingencies but didn't have all cash) and it just didn't feel like a smart or desirable move so we stopped house hunting after 15+ exhausting offers.

We find ourselves somewhat in this position:
However, if you are in Seattle because you are simply making 25% to 50% more than other LCOL areas, it's probably not worth it.

I'm curious if there are any write-ups to back this comment up or if it is more of an intuitive comment.  25%-50% is a large difference . . . . more then the mortgage difference, but if there are good numbers to back it up I am intrigued. 

Like many here I am incredibly stressed with the Seattle real estate market!

lhamo

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Re: Seattle Real Estate Noob
« Reply #35 on: August 24, 2019, 08:51:36 PM »
Congrats on your growing family!

2017 was the height of craziness -- we probably paid at least 50k too much for our house in far NE Seattle because we didn't want to get stuck in a bidding war.  The market has slowed dramatically in the last 12-18 months.  You should be able to get a house in Shoreline/Lynnwood/MLT now without a bidding war.  I've been keeping my eye on 2 and 3 br/1.5-2 bath listings and there are quite a lot of SFHs in the 400-500k range, and even more in the 500-600k range.  If you can snag something walking distance to one of the light rail stations your values are pretty much guaranteed to go up.

If you are open to a condo there are tons around Northgate (express buses to downtown now, light rail sooner) and 145th/15th in the 400-500k range.  Some of the complexes have high fees, though.

My DS has been taking the 522 downtown for his internship this summer and it is pretty smooth/a good option if you are near Bothell/Lake City Way.

kenmoremmm

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Re: Seattle Real Estate Noob
« Reply #36 on: August 25, 2019, 10:56:15 PM »
when the stock market tanks, seattle will be hit hard when the unicorns fly off and amazon comes back down to earth. easy(ier?) picking then...

bbates728

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Re: Seattle Real Estate Noob
« Reply #37 on: August 26, 2019, 10:23:27 AM »
when the stock market tanks, seattle will be hit hard when the unicorns fly off and amazon comes back down to earth. easy(ier?) picking then...

Is the top in?

kenmoremmm

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Re: Seattle Real Estate Noob
« Reply #38 on: August 26, 2019, 10:27:59 AM »
when the stock market tanks, seattle will be hit hard when the unicorns fly off and amazon comes back down to earth. easy(ier?) picking then...

Is the top in?
maybe. maybe not. but it doesn't change the results stated.

lhamo

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Re: Seattle Real Estate Noob
« Reply #39 on: August 26, 2019, 12:13:37 PM »
FYI, this is one of the condo complexes I have been keeping an eye on - it abuts Jackson Park (currently a public golf course, though there is talk about partially developing it as it is in walking distance from the planned light rail stations at 145th and 130th:

https://www.redfin.com/WA/Seattle/13741-15th-Ave-NE-98125/unit-C10/home/31896

There may be issues with the management --fees are fairly high, and units have been sitting on the market for quite awhile, which is unusual for 2-3 br units under $400k in the Seattle city limits.


kenmoremmm

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Re: Seattle Real Estate Noob
« Reply #40 on: August 26, 2019, 01:20:16 PM »
15th and 145th are very busy streets. loud.

1975 construction = lead paint + not to seismic code. expect a seismic retrofit when the city finally mandates it.

Samuel

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Re: Seattle Real Estate Noob
« Reply #41 on: August 26, 2019, 03:04:45 PM »
I'm still renting in the same place, but have an eye out for the right condo to appear. I've had a pre-approval in place for a while and have viewed 15 or so condos that had promise. At the lower end of the market prices have really flattened out and things aren't selling as quick, but inventory and new listings seem pretty low too (once you remove all the ones with red flags). If I see the right thing I'll pounce.

FYI, this is one of the condo complexes I have been keeping an eye on - it abuts Jackson Park (currently a public golf course, though there is talk about partially developing it as it is in walking distance from the planned light rail stations at 145th and 130th:

https://www.redfin.com/WA/Seattle/13741-15th-Ave-NE-98125/unit-C10/home/31896

There may be issues with the management --fees are fairly high, and units have been sitting on the market for quite awhile, which is unusual for 2-3 br units under $400k in the Seattle city limits.

Yeah, this is exactly the kind of listing that both intrigues me and worries me. It's suspiciously cheap, but the HOA is significantly higher than comparable buildings (making up for poorly managed finances?). The fact that it 's been listed and delisted multiple times this year means there is something interesting going on. I'm sure a more savvy condo buyer could dig into the details and figure out if this is a headache worthy deal or something to run away from. I certainly can't.

Monk

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Re: Seattle Real Estate Noob
« Reply #42 on: August 26, 2019, 11:32:44 PM »
Thanks for the input all!

I did notice that a lot of the Shoreline areas we offered in in 2017 are now listing for a little more (~$10-50k) than the "$100k over" prices we offered (i.e so $110-150k over 2017 list.)  We are still very happy in the apartment and neighborhood we are in now, I am a little concerned about rumors of further lowering interest rates and even higher resulting home prices . . .  We have looked at a few condo listings as well.

That condo listing does have appeal.  I've noticed older condo buildings generally seem to have higher HOA's which I suspect is for additional maintenance and higher emergency funds.  We are also keeping our eyes peeled for the right listing.  The rents when leaving this 1 br gem to a 2 br seem to justify the jump to buy. 

lhamo

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Re: Seattle Real Estate Noob
« Reply #43 on: August 27, 2019, 12:26:02 AM »
15th and 145th are very busy streets. loud.

1975 construction = lead paint + not to seismic code. expect a seismic retrofit when the city finally mandates it.

Point on likely construction issues taken.

Road noise is probably not a huge issue with that particular unit, though. It is all the way at the back of the complex, well away from 15th and with the golf course just beyond it. I lived for a year in a rental a ways further south on 15th where we were on the back of the building and we had no issue with noise. I would not consider anything that fronts on a busy street, though ~ made that mistake with our second rental on 35th!

Telecaster

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Re: Seattle Real Estate Noob
« Reply #44 on: September 03, 2019, 09:20:07 AM »
Right, but why is BI so fancy and Bremerton isn't?  They're both a short ferry ride from downtown Seattle, and BI wasn't always an enclave of elitism.  It used to be rural farmland just like everywhere else on the peninsula, but for some reason rich folks started walling themselves up there and not around Bremerton.

Maybe because the BI ferry is a little shorter ride?  If that's the only reason, then Bremerton should start seeing growth just like Lynwood/Mukilteo/Marysville have, as people are willing to increase their commute to get more affordable housing.

The town of Bremerton has historically been a little...grim.  It has been cleaned up a lot, but there's not much charm in downtown.  Bremerton does have some nice parks, and there are some nice sections of town, but overall there isn't much going for it.  And add on a one hour ferry commute on top of that.