When the housing market softens the media begins talking about the value of buying versus renting. Because these types of news stories are often written on a national level, the content must meet the needs of readers who live in a wide array of geographic locations.
Here are my reasons why right now is the right time to buy in Seattle, Washington … and why, if you’re currently renting, you may be missing an incredible opportunity.
1. Prices are lower than they have been in many years. According to a recent CNN article, home prices have dropped enough – and rents have risen enough – to make buying the better option. As an example, Seattle-area home prices have fallen nearly 26% from their peak in mid-2005; however, rental rates are rising quickly.
2. Interest rates are still at historic lows. Rates have just dropped on 30-year fixed loans to under 4%, and 15-year fixed loans to just over 3%.
3. Jumbo loans rates (rates for mortgage loans in excess of $417,000) are lower than they have been in years. Until recently it’s been difficult for buyers in higher price ranges to find affordable financing options. But many lenders have begun offering jumbo loans again, with rates on 30-year fixed loans between four and five percent. As recently as two years ago, the average jumbo rate was more than 6%. If that doesn’t sound like much of a savings, look at this example: by lowering your rate from 6+% to 5%, you could save more than $5,800 a year on a $600,000 mortgage.
4. Mortgage interest can be deducted from your taxes. The same can’t be said for renting.
5. You can’t build equity or leverage your money when you rent. This graph shows what you might pay your landlord in rent in each month, and doesn’t even take the inevitable rate increases into account. Yes, the money you pay in rent builds equity – but it’s your landlord who’s benefiting, not you! Renting doesn’t give you an opportunity to leverage your money into something that will create long-term value for you.
It’s important to understand how the current economy affects our local market, and what it means to you, your budget, and your housing needs. As an expert in our market, I can help you determine the best ways to maximize your resources by providing sound real estate advice. Give me a call at 206-930-8238, or contact me via the web and let’s talk about why now is a terrific time to step into the market.