Maria

I am sorry you are so sad. Maybe you just need to eat more ice cream

@ 75 -- Check my earlier post. I know that is emotion. And I don't see it as a problem when buying, living or selling a home -- as long as you're a level-headed person. As I said, I think the idea of thinking of your house as "just a place to live" is kind of sad.

I guess I don't need to be forced to save.

I guess if you can get a house for $1000/mo. that would normally require a $3k monthly payment (including insurance, which smart renters also pay btw) which never goes up, more power to you. For $3k month with 20% down you could by an amazing home in this market. Whatever. I would sumbit this as an edge case - most rent goes up annually and almost no one anywhere - short of San Francisco or NYC where rent controlled apartments are practically willed down through generations - gets that sweet of a deal. I am not saying to make your house your nest egg either, but it just makes a better investment than renting. At a minimum it's forced savings. And yes, you should save other money too.

And so the point of all this is that a house is 4 walls and a roof.....do what you wish - that is the beauty of a free market....there are many variables. Regret, but don't be surprised by the consequenses of your own actions. And if others used a sort of a shell game illusion in order to create short term profit - be smart and act with wisdom.

"And as for the emotional side of home ownership … I still don’t buy it. Most people — especially people paying for homes in Ballard — are usually very attached to the place they call home."

Darlin' that IS emotion.

Chris I admit that I have been tempted to jump in again. IF and only IF prices get to where it is more expensive to rent than buy I will buy. I doubt that will happen soon since the last time that was true in Seattle was the 70s. I do pay attention to these things. I watch rental prices also. When I first moved back here rents were high and the threat of conversion was always in the background so I started watching prices. That has changed.

Also I happen to find real estate interesting as well as the psychology behind the bubble. I suppose you could stretch that to an obsession. I find politics, economics and sociology very interesting and read usually two books or more a week on those subjects and real estate is a large part of that lately. Maybe an obsession? Maybe not. I used to be the same with gardening. I could bore you silly with the joys of species over hybrid roses and don’t get me started on xeroscaping. It’s simply conversation on subjects of interest. Call it what you want.

Right Bark. I knew I would eventually be leaving the area I was in so I took the money and left the house on the advice of a financial divorce expert. Best move I ever made financially and socially since that money cushion allowed me to not work too much, go to school and stay home with a young child. My move took awhile so I bought another house which I sold when I moved back to Seattle. At the time in New Mexico where I lived rent was higher than a mortgage. That made it a good choice. I really don’t find that too fascinating but maybe it will help you grasp reality better.

Maria obviously didn't get the house in her well-advertised divorce.

Maria, based on your posts on this topic it seems that you are the one who is obsessed with home values and how much they have decreased since the peak. If you're a die hard renter why would you even be interested in this topic if not to try and justify your choices? If that's your motivation of course you're not going to point out the success stories. Speaking of that, does anyone know of a site where we can look at recently sold houses, what they sold for and how long they were on the market? That might be a better source to look at when trying to determine the state of the ballard/greenwood housing market.

If you look at the housing price trends in Seattle -- and in particular, Ballard, over he past 20 years, can you say it's really all hype?

Seattle is growing -- and it is also geographically bounded by water on the east and west. A finite amount of room to build means more demand. Especially for people who actually want to live in Seattle, and not 10 or 15 miles away from the city.

The house we owned in Ballard and the land it was built on showed year-over-year gains in value for decades. Not perceived value -- real value. A year after we sold it – on the heels of Seattle’s worst housing downturn in decades -- it's still valued slightly above what the new owners paid, even with a recession and a location on a busy street.

We knew this when we bought the house. And even though we wanted a nice place to call home, we also knew the real estate trends would make us enough money to be able to turn around and buy a larger home when we were ready. Which we did.

And as for the emotional side of home ownership ... I still don't buy it. Most people -- especially people paying for homes in Ballard -- are usually very attached to the place they call home.

Bark using that same theory the poster who earlier said his house is worth $30,000 more than he paid is delusional.

Geez folks buy ho9uses if you you choose. I have done so and I have enjoyed them. Do not however consider it a financial planning tool. As I said, this issue is all emotion and selling hype which has no place in financial planning.

No they haven't Maria. They'll only take the loss when they sell. If that's 5-10 years from now, they'll be fine.

And PDX the folks you sold it too lost 20% as of today

I don't buy this "just consider it a place to live" business. It's kind of a dreary way to look at your abode -- be it apartment or house.

For most of the people I know, their house is an important part of their life -- and fixing it up to their liking is not a workaday chore, it's a fulfilling investment in their time and energy.

We bought our house on Market between 8th and 9th in 2002. It was pretty dumpy. We put a lot of time and energy into little fixes like painting rooms, replacing ugly light fixtures, cleaning and gardening.

We lived there five years and had two kids. It was a great place to start our family and entertain our friends. And it gave us a lot of peace-of-mind and security.

Oh yeah -- and money.

We sold it last May for $150,000 more than what we paid for it. Cherished place to live and an investment. In lame-o biz-speak, that’s known as a win-win.

7345 9th NW listed at $459,000 down from $519,000 on market 254 days

2130 NW 95th listed $795,000 no info on last sale on market for 224 days

2846 NW 67th listed $499,000, $127,000 1988 on market 334 days

7750 9th NW listed for $449,000, $446,000 in 2006 on market 114 days

Wow Maria, looks like you got really lucky with your rental. Wouldn't $3000 a month be a monthly payment on a ~600K house, assuming a 20% down payment?
Were you ever able to find some houses that have been sitting on the market forever that aren't on extremely busy streets?

Simple math…

I have noted that buying a property similar to what I currently rent would triple my monthly obligation. I pay about $1000. Let’s I just save another $1000 a month instead of the $2000 I am saving. In 30 years at 5% interest that gives me $837,000. I also have $1000 more to have fun with each month.

Now my rent may go up but so will property taxes but that is always a gamble. My rent has not increased in 3 years. Property taxes have increased in Seattle in the last three years. I also did not need a new roof this year or have to paint or have to buy a lawn mower.

Please everyone buy a house if that is what you want but consider it just a place to live. I have done it three times and each time it was what I wanted at that time. Remember however those plans in life are what we tell god to make her laugh.

An interesting take on the retirement aspects of house ownership.
http://articles.moneycentral.msn.com/Banking/Ho...

Of course you still have insurance and maintenance. AND the maintenance will likely be done by someone you pay. Those taxes will also rise. My sister and her husband pay $600 a month right now. That’s three times what their original payment when they bought the house 30 years ago.

Almost nothing is selling. Is that a seller's market?

I used to be a real estate agent for many years and I would say this is just wishful thinking. It is so a buyers market right now.

I'd like to chime in, and maybe someone already addressed this, but I didn't have the stamina to read through each and every post.

I wanted to make the point that MOS has nothing to do with house values. It only reflects supply and demand.

You're all correct, actually, from the bitter renter on. Many people are pissed off about the skyrocketing prices over the past few years and I am one of them. And I happen to be a Realtor (boo! hiss!).

The unrealistic surge in prices alienated many and kept them out of the market. I watched in dismay as the affordability index spiraled out of control with no one seeming to pay any attention.

The current reality is that a good many of the people (many, but not all) that were priced out of the market are jumping on houses that were previously ridiculously priced. And that's why the MOS is declining in many areas.

And the market was crazy hot up until a little over a year ago. Many markets around the country have been depressed for 3 or more years before seeing any improvement.

Which is a good thing in my opinion. As someone who makes his living helping people achieve home ownership, I like to see healthy markets as opposed to irrational ones whether they be exuberant or pessimistic.

-Lake Forest Mark

bravo simpleMath

The key thing that no has pointed out about owning vs. renting is that you after you pay off your mortgage you actually own your home. Assuming you stay in your home 30 years (or otherwise pay off the debt in less through refi, etc.) then retire there you no longer have a house payment or rent payment. Don't compare the cost of the loan payment to rent - you have to average that out over the lifetime of ownership. If you pay $1700/mo for 30 years, then nothing but taxes for another 20 your actual monthly payment is far, far less than rent. All this with no reliance on equity loans, selling for more, etc. not to mention the tax deduction of interest. If the value goes up, that's all gravy. You can also will a house to your kids...easy math.

At times, I come here to reminisce about my old hometown of Ballard. I even get a little wistful at times.

Then I read the comments - all you ninnies belly-aching at each other, and I feel better, as I am reminded why I left. For all you who paid 500K for a Ballard crap shack in 2007, good luck with that....

Keith just go to redfin.com. It’s a fascinating site as well as a real estate concept.

SPG I pulled my investments out of the market in December 2007 and have only government bonds right now. If you take a look at a calculator you will see that deductable interest is considered and still does not make up for the cost. Really that, as well as the sub primes, is more of a subsidy for realtors and brokers than it is for owners. The last year I filed long form with a mortgage I saved a whopping $500.

I admit I have a great deal renting and have not seen a rental increase in 3 years. I know this is not always the case. My landlord has no issue with what I do decorating wise either but I really lost most of my interest in that after three houses. Rents are following house prices down right now. About a year ago we negotiated the price down on a high end rental for my aged mother when we discovered that the place had been empty for a year. Note the vacancy rate at LEVA.

I said earlier, houses are way too emotional al issue to make a big part of your financial planning. This tread is pretty good evidence to back that I think. Financial planning should never be emotional. A house is a place to live. If you can afford it and plan to live there 30 years you are fine. Really the social, economic, and political ramifications of house ownership are fascinating. Just PLEASE remember that realtors are salesmen first and foremost.

I recommend this site: http://seattlebubble.com/blog/ I believe there is a thread there with a good rent versus buy calculator.

99% of people would be better off renting?!

I guess I'm in the 1%. I plan on staying in this house for 10 years minimum. We paid a decent amount and although we've lost some value (we bought 1 year ago tomorrow) I don't really care.

I got the house I wanted and have room for a growing family. Why in the world would I want to continue to pay someone else's mortgage with my rent payments?

Yeah, of course, there's going to be unexpected things that need fixed like plumbing (good thing I married a plumber, eh?) and other things... but that's what a savings account is for.

For my young family it makes sense for me to own instead of throwing my money away to a landlord.

401K? Maria will be a social security sponge, livin' large on $650 a month in Coral Gables.

You guys are hilarious! I can always come here for a laugh. Thanks for that!

"Libertarianism is an upper-middle class fantasy.."

Socialism is a working class fantasy.

in regards to that first time homebuyer credit, if you took advantage of it in January you would have lost it and then some.

Always remember the First Law of Land in Seattle, as put forth by Lex Luthor: "Stocks may rise and fall. Utilities and transportation systems may collapse. People are no damn good. But they will always need land, and they will pay through the nose to get it. Its the only thing they're not making any more of."

Apply that to Ballard, and even though I bought in 2005, towards the top of the lunacy, location and proximity to the area's attractions make Ballard look pretty good.

Maria, Don't forget to calculate the tax deductions on mortgage interest, first time homebuyer tax credits, etc. As far as investment income, how's your 401k these days? Mine is crap but my home is still worth about 30% more than what I paid for it.
Ownership isn't for everyone, but beyond the numbers, I prefer it now to renting after being kicked out of four different rentals that were being sold. I also like being able to decide on a whim if I want to change the color of any part of my house.

PS.. And who cares if Maria is divorced? I say it was his loss, whomever he was.

I'm a homeowner on 7th and I'm happy about there being less supply. I think that G.S.'s point was that our neighborhood was looking just a little bit better than some others in the city and the region - and with all the other crappy news out there - I'll take it.

@ bitter renter: now IS a good time to buy. Prices may not berzerk like they did from '02-'06, but Seattle is still growing and will remain a destination city for decades to come.

@ kooky norwegian: Loved your spoof of Goofy Norwegian! I think all the republicans are in bunkers these days waiting for the apocolypse and listening to Rush Limbaugh. I say don't wake them.

hey maria - send me a link to your map and i'll look at it

jeesh

Carter hasn't been president for 30 years now.

The CRA isn't what you think (or what Rush told you) it is.

This crisis has *much* more to do with greed and disassociating risk from mortgage backed securities than random feel-good legislation passed 30 yrs go.

Libertarianism is an upper-middle class fantasy..

Enjoy.
:-)

"don’t appreciate your “look suckers!” attitude."

90% of the time they are low wage renters...bitter and angry. Folks who made dumb choices in their lives so hate the 'American Dream' because you know what? They'll never get it.

So the last two examples you gave seem more reasonable than that ridiculous one on 8th however all three of them are on major streets. My real estate agent would not even show me ones on major streets no matter how cute I thought they were because the are hard to resell. And who cares what they last sold for? The metrics of this post are days on the market, if people are pricing them according to current market conditions they are being sold, which according to this post is happening. Find me a home on a quiet residential street where the people have been there for more than 2 years, those people will probably price it right and it will not sit.
As far as buying because we were all brainwashed into the American Dream, I think that is a very shallow thing to say. We bought our house because we were tired of hearing our neighbors boom boom music, tired of our rent going up 5-10% every year (thanks to my traditional 30 year fixed loan it will never go up again), tired of not being able to personalize our space and we really wanted our daughter to have a nice place with a little yard to grow up in. Not all home buyers were in it for the quick money and don't appreciate your "look suckers!" attitude.

What happened to Ballard! Obama happened! It is all Obama's fault! He is a socialist! Government Government! I am sitting in a self built bunker under my house right now, wearing a tin foil hat. I wish it were the beautiful years of Reagan again! He would wink and this problem would go away. Go get your cowboy hat Mr President!

Y if you take all the extra money a mortgage costs above rent and save it over 30 years you end up with a larger gain. You should be abler to find more than one online calculator out there that will show you this.

Right now it would triple my monthly price for me to buy what I currently rent. Add in a new roof or two and other maintenance over 30 years and figure out what I would make investing that difference?

Consider the 20% average drop we have already seen in Seattle prices. Do you think it is just gonna shoot right up again and we will be done? I predict at least 15% more and maybe 20% more in condos.

“99% of folk’s would be better off renting”

Might be true, except for the lack of basic tenant rights in Seattle and most of the country.

I'm with Maria on this one!

Maria, I'm curious if the "99% of folk’s would be better off renting and saving the difference" includes the fact that homeowners earn equity and can later sell their home.

How did government cause you to pay too much for an asset and how will government fix the fact that you did?

Evil = Jimmy Carter and community activists

Is Obama buying homes in the area now too? Maria, and others taking risks are who's going to "fix things". Government causes most problems to begin with. It was Jimmy Carter and his community reinvestment act in 77 that started this. And non other but "community activists" helped push this issue forward. Source: wikepedia

I am not wishing for this to be the reality nor does any of this make me happy. That last one is a terrible shame. It’s a darling house and someone has done a huge amount of work and put a lot of money in there. What I wish for is that people be a bit more educated when they buy anything and not over pay, over extend themselves, and save instead of plan their retirement based on an asset that can lose value as easily as it can gain it. I wish for people to stop getting financial advice from salesman.

Why is that a bad thing to wish for? Bubbles harm us all but they always break. I wish that people would stop jumping on bandwagons and creating bubbles.

Maria, be careful what you wish for. All these people struggling to pay their mortgages, unable to sell homes, losing their savings, do you think they are out spending in the local economy? The two people on my street being hit by this are both older (over 60), have lived here for ages, and are trying to get something from their homes to support them through their final years.

Hopefully Obama will turn this all around.

But the naysayers, hippies and renters will never be happy.

3056 NW 56th
On market 200 days now for sale at $409,950
Last sold 2006 $411,000
Sellers market?

Who's the lucky man Maria?

I am divorced. Did you know that women file for 70% of all divorces in the US?

1475 NW 80th St on current market for 113 days for $437,000.

Last sold 29007 $437,000

"A house is a place to live not an investment or a retirement plan."

It can be both, over the long run. I don't plan on living off social security for god's sake. A house/land can also be something to leave behind for kids. Grow up, not everyone is a hippie, some people see the value in investing over the long term and making profits (oh gawd, profits, how evil!)

"99% of folk’s would be better off renting"

Nonsense. Every member of my family has over several generations done well by owning a home.

Yes, we're on a big dip now but 5, 10 years from now, living within Seattle city limits? More people, more congestion on I5?

Maria, why do you keep reminding us you're divorced?

A house is a place to live not an investment or a retirement plan. A few simple calculations will tell you that money down and monthly payment added to taxes and insurance and maintenance and 99% of folk’s would be better off renting and saving the difference. The ONLY time that is not true is when renting is more expensive than buying. That has not been the case in Seattle for over 15 years.

That said, I have owned three houses two with the ex and one alone and was happy with each. Buying a house is more of an emotional issuer in the US today than it is a financial one, the “American dream” hype and all that. I try very hard not to be emotional about my money.

Was it really that crazy in 2006 that someone paid 605K for a smallish house on a very busy street? I mean I bought in 2007 (I know dumb me, but I plan to stay for a while) and I paid 450K for a 1650 ft2 3 bed 2 bath house that was partially remodeled and on a quiet street with a garage. I still think there is something fishy with the sale of that house in 2006.

Technically it may be a SM, but in a lot of ways, it is still very much a buyers market!

I miss the bowling allies and the good times when they were packed.

Pretty much every buyer in 2006 in Seattle got taken for a ride. Bubbles are like that but if you plan to live in a house for 30 years, don't plan on living using the equity ATM and can make the payment you will be fine.

Is it really positive though? It could be that prices are so bad and houses are moving so slowly, that it isn't even worth it for homeowners to list their properties for sale. Low inventory could be taken as a negative sign as easily as a positive sign.

8325 8th NW: The house was sold, the lot subdivided, townhomes built in the back yard, and now the house (which is on 8th) is sold, likely to be torn down for more townhomes.

Btw, none of the townhomes on 8th and 85th by the bus stop have sold yet. They replaced two hair salons, and some small apts. Meanwhile, 4 years later, Lelani Lanes is still an empty lot, and Sunset likely to remain that way. That's some good progress folks!

maria, just send a link already, sheesh.

ok, I found it Maria. Looking at the graph for this house on zillow I think the last buyer in 2006 got taken for a ride. Seriously 605K for a 1200 ft2 house on a busy street? I think this example supports M's point and that right now if a house has desirable qualities and is competitively priced it will sell quickly.
I like bits of good news! I hope the example that Maria found is a rare one and that all the houses in our area haven't lost 50% of their value in 3 years.

unless of course it is common to split up 4 bedroom houses into 4 bedroom condos.

Keith just look at a map.

the original home was probably sold for $600k, then they split it up into townhomes / condos, and there you have your $322k price.

That's what happened, I am guessing :)

That's sort of a cruel oxymoron to call this a sellers market. Many of the homes being sold are short sales or foreclosures at prices well below where the market was a couple of years ago. I don't think any home owner who has recently sold their home in Ballard would agree with you. Most are feeling the pain.

A simple search of tax records indicates that Maria is correct.

oh... "think about it harder" = poor choice of words. Sorry, I didn't meant to suggest anyone wasn't thinking as well or as hard as they should!

redfin

Maria, I can't find that one on Zillow. There is 8319, 8327 and 8329 listed, they all seem to be condos leading me to believe that 8325 is also in that complex. So 322K for a condo still seems pretty high and 605K seems completely unbelievable. What site are you using? I'm not sure how accurate Zillow is.

Well when you compare a price today to a price at the peak of the inflated housing bubble hysteria.... it may not seem like a seller's market. But I think if you think about it harder, it has more to do with a realistic adjustment in housing prices following an artificially created spike.

8325 8th NW

Maybe it's time to look for a more meaningful statistic than months of supply.

I simply can't believe the asking price on a house across the street from me -- nearly $700K, bought in 2006 for less than $500K. There are apparently some sellers out there who really do believe it's a seller's market.

The only thing I see on the 8300 block of 8th that recently sold are some condos that sold for 365 and 395. I looked on Zillow, what site are you finding your info Maria? There have been a ton of townhouses going up on that block, maybe that explains the previous large sale? Just a thought. If that info on Zillow is acurate 395 seems very high for a condo.

@2--me too.

I'll be interested to see if the supply bumps up as it gets a little warmer.

It could be that all the houses that have been up for sale are finally clearing out and less new ones are being put out there. Complete guess, though.

I'm a bitter renter, why would I enjoy this 'rare nugget of positive news.'

A house sold last week in the 8300 block of 8th NW for $322,000. It last sold for $605,000 in 2006. Sellers market?