It's cheaper to own versus rent in King County

The decision to rent a home versus own a home is one that receives a lot of attention. The correct answer depends on a person’s situation.

Renting is a better option for those who need flexibility. If you expect to move within a couple years or you are uncertain of your employment, renting is likely the better option.

For those who expect to live in the same area for 5 or more years and have job security, owning a home is something to seriously consider because over the long term it is financially better.

Currently in Seattle, Washington, the cost of renting is increasing because vacancy rates are dropping, as the cost of owning a home is decreasing. On a monthly basis it is cheaper to own than rent.

In King County, home values are down 8% and condominium values are down 22% in the last 12 months. In addition mortgage interest rates are at historic lows, averaging just above 4%. The median home in King County sold for $349,950 and the median condominium sold for $195,000 last fall.

With a 10% down payment, the monthly mortgage for the median priced single-family home is $1,522 per month, while the cost of renting a typical house is $1,930 per month. The median condo would have a mortgage payment of $849 per month, while the cost of renting a typical apartment is $1300 per month.

Now may be a good time to contact a Realtor to explore options.

Which homes are selling in Queen Anne and Magnolia?

In a previous post about homes in north Seattle I spotlighted what price ranges are most active. It is important information if one is considering buying or selling a home, because the real estate market is different at different price points.

Think of it like the weather. The weather for the state of Washington on a given day will be different than the weather in Seattle. The weather in Seattle may be different if you are on the waterfront vs. in land.

Which homes are selling in Queen Anne and Magnolia? At different price points the market acts differently. The most active price point in the last six months were the 35 homes that sold from $350,000 to $400,000. While the market for homes priced above $700,000 was much slower.

Which homes sold the quickest? Below is a graph that shows the number of days on market (DOM) for homes in many price ranges. In the price range of $500,000 to $550,000 there were 26 homes that sold with an average DOM of 21 days! WOW! That's a hot market!

As it shows above, for those who own homes in active price points now is a good time to sell. Plus there are also some excellent opportunities for home buyers looking in non-active price points.

Home Values Up 14%!!!

How much have the home values in your neighborhood appreciated since 2004?

Given all the negative news about the real estate market, one may not know that the median home value in central and north Seattle appreciated 14% since 2004!!! Above shows appreciation for the neighborhoods of Queen Anne, Magnolia, East Lake, Capital Hill, Madison Park, Ballard, Fremont, Wallingford, Green Lake, University District, Ravenna, Bryant, Wedgewood and many more...

Keep in mind this is comparing the first 6 months of 2004 to the first 6 months of 2011. If one purchased a home after 2004 the picture may not be as rosy. However, the image above shows that real estate is a solid invest for those who intend to buy and hold. Below is more information about the real estate market since 2004.

In 2004 the median home value was $397,5000. In 2007 it peaked at $555,000 and in 2011 it was $453,000 which was roughly the same as in 2005. The graph shows that median home values are trending up since 2009 which is a good sign.

In 2004 the average home that sold was on the market for 35 days. Compared to 51 in 2011. The graph shows that the number of days on market is trending down since 2009 which is a good sign. A market time of 45 days is consider healthy

In 2004 over 2,000 home sold in the first 6 months of the year. In 2011 just over 1,300 sold. The graph shows that the number of home sold is trending up since 2009 which is a good sign.

If bought and held real estate in central and north Seattle is a good investment.

5 Reasons to Buy a Home Right Now!

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.

Homes Sold In Central Seattle WA

The median home price in Central Seattle, Washington was $511,250 in April. Upper end home buyers were still on the fence while first time home buyers were out in great numbers. Since the neighborhoods of Central Seattle tend to have more upper end homes the median price continues to get hit hard.
The number of homes sold in Central Seattle continues to climb with 118 closings in April. Similare to north Seattle the number of pending continues to skyrocket with 197 homes pending. Activity should continue to increase for the next couple months.

Thanks for reading!

-Andrew

www.SeattleHomeKey.com

Homes Sold In North Seattle WA

The median price of homes sold in North Seattle, Washington was $441,238 in April. In a typical year home values tend to peak in May or June. I expect they will this year as well, but I do wonder if many buyers purchased homes early to take advantage of the first time home buyer tax credit that recently expired.

"Move-up" home buyers continue to do well in this market by selling their home to a first time home buyer and purchasing in a higher price range that is likely not as strong.





The number of homes sold in North Seattle in April was just off March with 231 to 237 homes selling. The number of pending homes continues to skyrocket with 408 homes pending in April. The number of closings should continue to increase for the next couple months.

Thanks for reading!

-Andrew

www.SeattleHomeKey.com

Homes Sold In Central Seattle WA

Home values have shot down in Central Seattle Washington! The median home price was $606,500 in February but has decreased to $498,750 in March.

I suspected the increase in home values in February was a spike but I did not expect it to be followed by a decrease of $100,000. The upper end home buyers are still on the fence while first time home buyers are out in great numbers. For that reason the median price of homes in central Seattle is getting hit hard.

The number of homes sold in Central Seattle has skyrocketed from 64 in February to 113 in March.

Similar to North Seattle the number of pending homes continues to skyrocket with 172 homes pending in March. The number of closings should continue to increase for the next couple months.

Thanks for reading!

-Andrew

www.SeattleHomeKey.com

Homes Sold in North Seattle WA

The median price of homes sold in North Seattle, Washington was $402,625 in March. This number is down from last month which is surprising considering the seasonal slowdown around the holidays is behind us.

The market continues to compact. The value of upper end homes has been decreasing while the value of entry level homes has held steady or increased. The first time home buyer tax credit is helping homes priced under $500,000. In fact it is not uncommon to see multiple offers for homes that are priced right.

Home owners that are considering moving up will likely do well in this market by selling their home to a first time home buyer and purchasing in a price range that is not as strong.

The number of homes sold in North Seattle jumped up from February to March with 148 to 237 homes selling.

The number of pending homes continues to skyrocket with 358 homes pending in March. The number of closings should continue to increase for the next couple months.

Thanks for reading!

-Andrew

www.SeattleHomeKey.com

Homes Sold in Central Seattle, WA

Home values have shot up in Central Seattle Washington! The median home price was $606,500 in February an increase of $100,000 since December.

There appears to be a renewed interest in Central Seattle homes with the sale of more mid to upper end homes. It is a welcome change for home owners who have seen the value of their home decline substantially.

This increase may be represented by just a spike in the graph below because next month the median price home will likely be under $550,000.

The number of homes sold in Central Seattle continued to drop from 113 in December, to 89 in January, to 64 in February.

Similar to North Seattle the number of pending homes is skyrocketing in Central Seattle. In December there were 89 homes pending to sell, in January there were 109, and in February there were 132. Strangely, these pending numbers aren't transferring to more homes selling. This may be due to the fact that it's taking longer for deals to close, or there is a body of Buyers who are having difficulty getting a loan.

Thanks for reading!

-Andrew

www.SeattleHomeKey.com

Homes Sold in North Seattle, WA

The median priced of homes sold in North Seattle, Washington was $418,275 in February. With the seasonal slowdown around the holidays behind us, home values are gradually increasing.


Over the last 12 months the market has been compacting. The value of mid and upper end homes has been decreasing while the value of entry level homes has held steady or increased. The first time home buyer tax credit is helping homes priced under $500,000. In fact it is not uncommon to see multiple offers for homes that are priced right.


Home owners that are considering moving up will likely do well in this market by selling their home to a first time home buyer and purchasing in a price range that is not as strong.
The number of homes sold in North Seattle held steady from January to February with a 147 and 148 homes selling.


The number of pending homes is skyrocketing! It is strange that it isn't transferring to more homes selling. Either it is taking longer for deals to close, or there is a body of Buyers who are having difficulty getting a loan.

Thanks for reading!

-Andrew

www.SeattleHomeKey.com

Homes Sold in North Seattle WA

The median priced home in north Seattle, Washington was $407,500 in December. With luck home values in January will stay above $400,000 and the low point of 2009 which was $394,250 last March.

The number of homes sold in north Seattle moved down to 206 and pending homes dropped to 163. This is typical for this time of year since many home Buyers have put their search on hold during the holidays.

I expect January to be the low point of the year for home sale values and volumes for 2010.

Homes Sold in Central Seattle, WA

The median home price in central Seattle Washington was $506,500 in December. Home price for pending homes was listed at $489,250. It looks clear that home prices in January of 2010 will continue to drop with a possible dip below the low in March of 2009 of $480,000.

The number of homes sold in central Seattle dropped to 113 in December. Pending homes dropped dramatically. Home buyer put there search on hold for the holiday season. I expect fewer homes to sell in December, but more homes to go pending which signals the begin of a new cycle for 2010.

Homes Sold in Central Seattle WA

The median home price in central Seattle Washington was $551,200 in November which is up slightly from October.

One may wonder what happened to the typical slow down this time of the year brings. It is hard to know for sure but it may have something to do with the Tax Credit Extension. A home priced for $550,000 is not the typical purchase for a First-Time-Home-Buyer. However, the new extension also give a credit to Home-Buyers who have lived in their home for the last 5 years in the amount of $6,500. This may be stimulating homes priced under $800,000 in a way we haven't seen in the past.

The number of homes sold in central Seattle continued to rise in November. However, pending homes is on the decline. I expect fewer homes to sell in December and likely bottom out in January.

Homes Sold In North Seattle WA

The median priced home in north Seattle, Washington was $415,509 in November. Looking at the line graph below home values appear to be moving up since October. Unfortunately it is misleading. The reason for this increase is due to a home that sold for $11,500,000 that is close to 10,000 square feet in size in Laurelhurst! I believe home values would have continued to slide down since October if that home hadn't sold.
The number of homes sold in north Seattle moved down to 236 and pending homes dropped to 119. This is typical for this time of year since many home Buyers have put their search on hold during the holidays.

Home values and volumes should continue to slide through January 2010.

Homes Sold in Central Seattle

The median home price in central Seattle Washington was $531,200 in October which continues a slight decline from its high in July. The number of pending and sold homes in central Seattle plateaued in September and October with 119 homes sold each month.

Values and volumes should continue to decline through January 2010 unless something unexpected happens due to the Tax Credit Extension.

Homes Sold in North Seattle WA

The median home price in north Seattle Washington started its seasonal dip in October at $410,000. The number of pending and sold homes in north Seattle peaked for the year in June with 317 homes sold. 280 sold in October which is the largest volume for that month since before 2006.

Values and volumes should continue to slide through January unless the Tax Credit Extension causes an unexpected increase.

Homes Sold in Central Seattle WA

The median home price in central Seattle Washington was $549,750 in September which continues to decline from its high in July. Values should hold steady for October but will then likely begin a normal decline as winter approaches.

The number of pending and sold homes in central Seattle continues to rise so far this year. 119 sold in September and it looks like September or October with be the peak.

Homes Sold In North Seattle WA

The median home price in north Seattle Washington continued to rise in September to a high for the year of $432,750. Values may hold steady for October but will then will likely begin a normal decline as winter approaches.
The number of pending and sold homes in north Seattle peaked for the year in June with 317 homes selling. 248 sold in September and that number should continue to decrease through January 2010.

Homes Sold in North Seattle WA

Sales Value Line-Chart
The median home price in north Seattle Washington was $414,500 in July. From May of 2008 through March it slid downward from a high of $512,475 to a low of $394,250. Since then prices have stabilized and they should continue to improve through the summer.

Sales Volume Line-Chart
The number of pending and sold homes in north Seattle may have peaked for the year in June. Close to 147 homes sold in July down from 158 in June. 141 homes are pending which is down from 180.

www.seattlehomekey.com

Homes Sold in Central Seattle WA

Sales Value Line-Chart
The median home price in central Seattle Washington inched up to $548,000 in July. From December 2008 through March 2009 median values slid from a high of $647,500 to a low of $480,000. It appears April was the turning point and values should continue to rise through the summer.

Sales Volume Line-Chart
54 homes sold in July in central Seattle. It appears June will likely be the peak for the year with 56 homes sold, in which more homes sold than any month since August of 2007.

The gap between homes that have closed and homes that are pending continues to be larger than normal. It's likely due to stricter rules for getting a loan and may also be due to the number of short sales on the market. According to the NWMLS 12% of the homes sold in King County are short sales which tend to take longer to close.

www.seattlehomekey.com