After doing some research, I think that Seattle’s home prices will significantly decrease over the next year or two. Home prices have already come down a bit, though not nearly as much as the national average. I would like to buy a place and stop shoveling cash into the furnace that is renting, but I also don’t want to lose $100,000 by prematurely purchasing a home in a market that still needs to go down.
My rent is ridiculously high at $1,100 a month. The greedy head honchos who own my building (Metropolitan Park Apts) just jacked it up 15%. I would love to buy a place and start saving that cash. Renting currently costs me around $14,000 a year. I would love to be able to put that money into real estate equity.
I think that the median home price in Seattle is going to drop another 10-20% over the next year, if not more. Seattle is always a bit behind in national economic trends and we still have yet to feel the full brunt of the housing bust. Another huge problem is that so many major employers in Seattle are entering hard times… WaMu getting bought out & shut down by JP Morgan is just the tip of the iceberg. Microsoft has had a hiring freeze for awhile now and it looks like they may be doing layoffs soon. Many local businesses have started to burn cash and it wont be long till we start seeing rounds of layoffs from them.
My hope is that my income continues to rise and I will be in a good position to take advantage of much lower home prices in a year or two. I will still be looking out for amazing deals now, but I think I will see many more good deals coming my way if I have some patience.
Why don’t you just tell Andy directly that you think he got F$CKED?
I actually think Andy got a good deal. I just think it will be possible to get a better deal in about a years time. Basically just trying to time the market, but if I had to get in right now, I’d probably get something similar to what Andy purchased.
NW real estate had some signs that it was at least putting up a fight-even though median prices fell on homes, “used” house sales were up, and the number of foreclosures were down.
Your best bet will if the big companies get hit hard and the over-inflated pay their employees got dries up.
Ha I got a really good deal. Let me know if you ever want to go look at comparables; you’re welcome to try to spot a better one. I’ve actually seen a couple similar places lately, that I would grab now if Freddie Mac would let me.
My logic was never that this is as low as things will go; I’m actually (believe it or not) hoping that house values slide for at least two more years. Call it doubling down. Buy one place early on when people are scared about future declines (a down futures market might as well be reality as far as it affects prices now, at least among people who don’t have to sell; and the conventional wisdom is that Seattle is in for a slide). Shovel all spare cash into equity, and hopefully have enough to buy another highly leveraged place when we hit rock bottom in a couple years.
Buffett: ‘Be greedy when others are fearful, and fearful when others are greedy’.
Oh, and did I mention the $7,500 Federal tax credit for first-time homebuyers if you buy before April 2009? Buy now, or subsidize my purchase with your tax dollars. =P
I’ve been watching prices on redfin.com and I think that you got a good deal, andy. I mentioned that in the post. I am just trying to time the market by waiting for a year or so before getting in in an overall lower market.
That being said, if you can get a second house in the next year or two, your strategy is excellent. The question is though: How will you afford the second house? Who will give you another mortgage? Are you going to get a parental loan or something?
I am curious what your strategy is.