Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

36 responses to “Fast, Good, Cheap: Pick Any Two”

  1. Nina

    “Fast, Good, Cheap: Pick Any Two,” describes the homebuying process we’re experiencing.

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  2. Ross

    Great post Tim, but you got me thinking: what about sacrificing a little on all three?

    I don’t see myself buying a home anytime soon with rents the way they are, but when I do I can imagine a scenario where I purchase a home:

    1. An old bungalow or brick house around 1500-2000 SF, with some non-major work to be done that I can eventually handle myself. Not amazing, but not a hovel.
    2. In a less showy neighborhood that’s still pretty safe. Phinney Ridge/Wedgwood/West Seattle?
    3. Somewhere a little south of the median $/sqft

    Is it possible to find that? Maybe not, but that would be my goal if the time comes.

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  3. WestSideBilly

    We always used strong, light, cheap in the mechanical world. It seems to be a pretty good analogy for housing, although I would have broken up quality into size, privacy/space, quality/amenity. Simple is good, though.

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  4. David S

    Location, Location, Location: Pick any two. :)

    JK Tim. This is a good one my wife will also enjoy reading.

    This is the search mode we in fact are taking.
    1. Our PRICE point is fixed where it is.
    2. Our QUALITY is now such that we are down sizing our search square feet.
    3. Our LOCATION remains fixed to prime.

    So you have reaffirmed what we now have cooking. We are going to let the square footage factor of QUALITY slide rather tight while keeping the two other parameters fixed.

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  5. StillWaitingToBuy

    Very well summarized.

    I’m a long time seattle bubble reader.

    Despite my username, I have since purchased a home here in the Seattle area. Of course, we wanted the newer home with all the gadgets on a large lot away from congestion but not far from everything. And such a combination just doesn’t yield anything that I wanted to pay.

    We ended up compromising on location, sort of…. We got the big newer house with many of the gadgets on an acre lot with a beautiful view and away from congestion at a great price (thx to seattlebubble for educating me so I’d hold out for one of Ray’s gems!). But the location meant that my wife and I drive about 20 miles each way to work now. And I say “sort of” only because we actually wanted to live away from the noise and traffic and city lights, so we knew we had to go out a bit. Just not quite as far as we ended up in Ravensdale.

    Sure, it’s a relatively long distance to travel on days when we cannot work from home. But, anytime I find myself grumbling inside about how far of a drive it is, I just say to myself “but that’s the price I have to pay to live in paradise”. And I’m ok with that. It’s a compromise that we’re both happy with. Which I think is the gist of your topic.

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  6. hoary

    This is coming from someone who lives in Kent, but…

    Quality is something you can improve over time.
    Price can be a relative thing depending on your personal employment upward mobility potential.
    Location is pretty much fixed.

    My advice is if you suspect location to be even a little bit important to you, weight it more than you think. Buying in a good location is rarely a bad bet. Thank goodness I don’t have to commute from Issaquah or some other nether-world, but bussing it from Kent still takes 45 min to an hour both ways.

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  7. Kary L. Krismer

    My comment would be one of the biggest mistakes I see people make is to set too small of an area to look for a house, so based on that I would say location. Not that you should accept a bad neighborhood, but your area should probably be more than one neighborhood, and typically more than one city. There are exceptions though. For example, someone with a small home business might want to limit themselves to small home business-friendly Seattle.

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  8. deejayoh

    MLS data out fast this month!

    http://blog.seattlepi.com/realestatenews/archives/238097.asp?source=rss

    The median price of a single-family home in King County slipped 3.78 percent in January compared with December and 5.07 percent from a year ago to $356,000, but the latest numbers from the Northwest Multiple Listing Service provided some evidence that the housing market is pulling out of its dive.

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  9. deejayoh

    RE: The Tim @ 9 – yep. sounds like the didnt have a lot of volume to process. Only 1,100 sales.

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  10. Kary L. Krismer

    RE: The Tim @ 9 – I hate it when they post it so early too, because that means it’s more likely there will be more late reported sales the next month. Tomorrow would have been fine.

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  11. Haybaler

    Hey! I KNOW that place in the picture. I grew up in the neighborhood.

    When I was a old enough to deliver a newspaper route, the Sisters at the Convent and the Groundskeeper, who lived over the Carriage house, both subscribed. In order to deliver to them I needed to climb over the perimeter brick and sandstone wall on the Alki street side because the gates were usually shut. I’d wind through the grounds to toss a paper onto the stone entry of the main house, shown in the photo, then down the driveway to the Carriage house to stuff a paper into a box at the bottom of the stairs to the groundskeepers apartment, then I’d drop over the perimeter wall on the Stevens street side of the grounds to go on my way.

    On occasion I would visit with the kids who resided in the house who were about my age. (There was a period of time that the church rented the house to a caretaker family while it was for sale.) There were secret passages in the walls with hidden buttons in the molding to open the hidden doors. We would go down to the sub-basement and play the organ, which the adults upstairs must have tolerated, because we weren’t skilled piano players. The windows in the bedrooms were woodframe doublehungs and drafty.

    In later years I spent a lot of time playing tennis on the court …. And entertaining girlfriends in the view pagoda’s above them.

    I recall that at one time the place was for sale for $250K.

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  12. joe dirt

    People talk about location, but in some ways location really means price. Rich will avoid a low income neighborhood even if it is more convenient, closer to water, better view, etc. The residents are what make the location.

    Esthetics should be considered as much as quality because a timeless style will retain its value. What is better, a Brady bunch tri-level, even if its all brick with granite counter tops, or classic stucco bungalow. Some day people will be pulling massive slabs of granite from their homes and hauling them to the dumpster anyway.

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  13. joe dirt

    RE: Haybaler @ 12

    Despite the attractiveness of the place, it may not be a good deal at any price, because of the massive cost of upgrading / maintaining something like that and its being in Tacoma. (price may be considering the land value)

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  14. softwarengineer

    It’s a Choice of Two, Not Three

    Among, “price”, quality and location; until home prices and medium household incomes stop their collapse, high “price” picks are a moot point for most of Seattle’s working households.

    Article:

    “…Median household income is falling in the vast majority of U.S. states and in virtually every single major U.S. city. …”

    http://endoftheamericandream.com/archives/median-household-income-is-falling-in-almost-every-single-major-american-city

    Now…..open the URL above and pick which of the homes you’d buy….LOL

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  15. ChrisM

    I took a look at the photos, but there’s none of the kitchen. My question: does it have granite counter tops? Thanks!

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  16. Ira Sacharoff

    If you want to buy a house, certain tradeoffs are almost inevitable unless you can afford to buy anything you want, anywhere you want.
    Being flexible is important, but it’s also important to not make tradeoffs that aren’t comfortable.
    You shouldn’t buy a house in South Park because it’s the only neighborhood you can afford, but if you’ve been looking for a house only in Ballard while working downtown, it’s worth it to explore neighborhoods you’re not familiar with.
    If you’ve been looking at houses only 2000-2250 sq ft, maybe expand the search a little. Some houses are so poorly laid out, that a home that claims to have 2000 sq ft might only have one above ground bedroom, or a large unfinished basement with low ceilings that they’re counting.
    Price isn’t something I advise being flexible on, unless you’re absolutely, 100% positive that buying something more expensive than you planned for is something you can easily afford.

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  17. deejayoh

    RE: softwarengineer @ 15 – I love posts with ad aggregator blog links as reference articles.

    Other titles available on the “End of the American Dream” blog (complete with Rand Paul ads… Just like his dad, except he hasn’t done anything!)

    Uh Oh – The Internet Is About To Run Out Of IP Addresses!
    40 Percent Of Egyptians Live On 2 Dollars A Day Or Less And The Global Elite Like It That Way
    18 Ridiculous Statistics About Medical Bills, Medical Debt And The Health Care Industry That Will Make You So Mad You Will Want To Tear Your Hair Out
    10 Things That The Egypt Riots Can Teach Us About What Happens When Society Breaks Down
    What Is Globalization?
    Moral Relativism
    Do Not Let The Establishment Divide Us – We Are All Americans
    Is This What The Whole Country Is Going To Look Like After The Economy Collapses?: 4 Restaurant Brawl Videos That Are So Wild You Won’t Believe They Happened In America
    No Jobs, No Hope, No Future: 27 Signs That America’s Poverty Class Is Rapidly Becoming Larger Than America’s Middle Class

    Owned by a guy who lives in Carnation Washington who also has 223 other registered domains like “TheDesignerWeddingDresses.com”

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  18. Peter Witting

    RE: Ross @ 2
    Ross – I have one of those, in View Ridge, that I bought in 1993. It was the best I could afford then, and I’m still happy with it now. Sure, it’s smaller and less flashy than what some of my friends have, but it has a view, is well-built and only a few minutes to downtown.

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  19. ella

    Recently we obtained a pre-approval for a primary residence from a Wa. State regional bank. We could qualify for a payment of principal, interest, casualty insurance and taxes of 40% of gross income. It seems high to me. I think the measure should be 30% of gross. But the point is some bankers are looking at 40% of gross for a conforming loan.

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  20. Kary L. Krismer

    RE: ella @ 20 – I would hope a bank isn’t using such a simplistic analysis whether it be 30% or 40%.

    Let’s assume Couple A has $40,000 of savings, has been paying $2,000 a month rent and carries no credit card debt. Couple B has only $10,000 of savings, has been paying $1,000 a month rent and has $20,000 of credit card debt. Would it you loan each the same amount of money because they both grossed $70,000?

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  21. doug

    We’ve sacrificed a little bit in quality, a little bit in location. The house we have an offer on is 260k (about what we wanted to spend), is gorgeous and needs no work, but is a little small (1700 ft^2), and located in Mill Creek.
    While Mill Creek is not a prime real estate location, the particular neighborhood is nice, and it works well for us. I work in Bellevue, and my wife works in Everett.

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  22. Kary L. Krismer

    By doug @ 22:

    While Mill Creek is not a prime real estate location, the particular neighborhood is nice, and it works well for us. I work in Bellevue, and my wife works in Everett.

    Parts of Mill Creek are very nice and sought after. I had a listing there last year that had by far the best turn out for an open house in about the last three years, doing nothing more to advertise it than typical. And that wasn’t even in the best part of Mill Creek.

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  23. Racket

    By ChrisM @ 16:

    I took a look at the photos, but there’s none of the kitchen. My question: does it have granite counter tops? Thanks!

    I wont ever live in a house without granite countertops again. With all the cheap granite coming from china, why would you want to use tile, or formica?

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  24. softwarengineer

    RE: deejayoh @ 18

    Sounds About as Good as AP, Reuters and Bloomberg MSM Ones?

    The same good ole boys that told us a couple days we added about 150K jobs in January, but today its more like 36K….excluding the 500K BLS removed as “giveups” from the American job market totals….LOL

    There are no good news links anymore IMO, so mine are as good as yours.

    I’m no fan of Rand BTW, ditto for McCain/Obama….I voted Nader and wasted my vote, but IMO, so did the rest of you….LOL

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  25. redmondjp

    RE: Racket @ 24
    It’s simple: I’m lazy and formica requires less maintenance than granite. Plus, granite is a fad, and 20 years from now everybody will be ripping it out and replacing it with whatever the new fad is – recycled glass, maybe? We’ve already doin’ the ‘crete (concrete) thing, at least a few people that I know.

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  26. Kary L. Krismer

    By Racket @ 24:

    By ChrisM @ 16:
    I took a look at the photos, but there’s none of the kitchen. My question: does it have granite counter tops? Thanks!

    I wont ever live in a house without granite countertops again. With all the cheap granite coming from china, why would you want to use tile, or formica?

    That’s not granite–it’s lead! ;-) (Or maybe radioactive.)

    Seriously I think it depends on the house. Too low end of a house and it just looks like lipstick on a pig.

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  27. Kary L. Krismer

    By redmondjp @ 26:

    RE: Racket @ 24
    It’s simple: I’m lazy and formica requires less maintenance than granite. Plus, granite is a fad, and 20 years from now everybody will be ripping it out and replacing it with whatever the new fad is – recycled glass, maybe? We’ve already doin’ the ‘crete (concrete) thing, at least a few people that I know.

    That’s why I’m not buying stainless appliances, even though we have the world’s oldest functioning dishwasher and I don’t like our refrigerator. First, I’ve never really liked them, but second they have to be getting near the end of their period of being a fad.

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  28. ChrisM

    Actually, my granite question was facetious. I’ve been appalled by some of the awful “renovations” done to historic houses.

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  29. deejayoh

    By softwarengineer @ 25:

    RE: deejayoh @ 18
    There are no good news links anymore IMO, so mine are as good as yours.

    I just like to be able to tell who wrote it, at a minimum…

    I’m no fan of Rand BTW, ditto for McCain/Obama….I voted Nader and wasted my vote, but IMO, so did the rest of you….LOL

    OK, that got a laugh.

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  30. Blake

    RE: deejayoh @ 30
    If voting really could change things it’d be illegal! That should be more n more obvious by now. The Pols pay lip service to public opinion…

    As far as good “reporting”/sources… ProPublica is the best.
    Here’s their latest investigative report on the Big O and the bankruptcy reform he dropped the ball on (just out today!):
    http://www.propublica.org/article/dems-obama-broke-pledge-to-force-banks-to-help-homeowners
    Dollars for Docs: http://www.propublica.org/topic/dollars-for-doctors/
    Hedge funds and designed-to-fail CDOs:
    http://www.propublica.org/article/new-documents-show-hedge-fund-magnetar-influenced-deal-despite-denials
    How the Military Is Failing Its Wounded:
    http://www.propublica.org/series/brain-wars ** I work with Vets and this is just terrific… I can’t say enough good things about ProPublica.

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  31. ella

    RE: Kary L. Krismer @ 21 – Not simplistic, rather it is their debt to income ratio. So total debt service including the Mgt. can not exceed 42% of gross income 40% if no debt othr than the Mgt.

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  32. softwarengineer

    RE: deejayoh @ 30

    A WSJ URL With an Author’s Name

    OK, point made [thanx for laughing at my joke too]…..here’s an article with a name on it, says mostly the same thing my last blog stated. Deejayoh, it’s really tough to get 2010 household income data degradation data from the web [try it], albeit the BLS recently shrunk the American workforce by approx 2.3 million [see Table A-16 from BLS, page 31 of BLS URL below], many Americans are working two jobs at the same time lately, etc, etc…. a real witches brew to even remotely compare to past recessions or make the 16% U6 unemployment rate trending clear or even remotely positive. Makes me think these Government Statisticians are using dartboards. WSJ Artricle:

    “…The downturn that some have dubbed the “Great Recession” has trimmed the typical household’s income significantly, new Census data show, following years of stagnant wage growth that made the past decade the worst for American families in at least half a century….”

    http://online.wsj.com/article/SB10001424052748703440604575495670714069694.html

    BLS URL on 2.3M Not in Labor Force Count Anymore Recently, RE: Jan 2010-Jan 2011 data, see page 31, Table A-16:

    http://www.bls.gov/news.release/pdf/empsit.pdf

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  33. Kary L. Krismer

    RE: ella @ 32 – So you wouldn’t factor in the amount of their savings or the amount they’re currently paying in rent? I think both of those things are highly relevant (even if you adjusted for the credit card debt I put in the hypothetical).

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  34. Polly

    By hoary @ 6:

    Thank goodness I don’t have to commute from Issaquah or some other nether-world

    Issaquah? Nether-world? Really?

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  35. Seattle Bubble • The Tim’s Top Ten of Twenty-Eleven

    [...] Fast, Good, Cheap: Pick Any Two – I liked this one so much I wrote a national version for my favorite personal finance blog, Get Rich Slowly, which included a sweet Venn Diagram, because Venn Diagrams are awesome. [...]

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