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.

34 responses to “Cheapest Homes: February 2012 Edition”

  1. softwarengineer

    Buy Cheap, Live There Forever

    Is not SWE’s rules, its rules SWE learned from the very rich, like Buffet. They drive modest cars too, for their income. How do you think they got so rich in the first place?

    Now, if you don’t care about being rich or getting richer….follow the mainstream advice, hopefully this advice can get you by anyway…even preventing you from getting rich.

    http://www.moneyunder30.com/how-much-house-can-you-afford

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  2. Kary L. Krismer

    By softwarengineer @ 1:

    Buy Cheap, Live There Forever

    Good strategy. Leave the tasks of cleaning up, moving your crap and then selling to your heirs.

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  3. Pegasus

    I doubt that the house on Bangor will be qualified for a VA loan even though the listing states that.

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  4. David S

    RE: softwarengineer @ 1 – Great so on an engineer’s salary one can afford up to about a $300,000 house and that’s it. Have you seen what’s available for only $300k? It’s not what dreams are made of that’s for sure.

    With zero other debt one should have $400 a month to renovate, at retail, paid to contractors, because one is too busy being an engineer to play home remodeler on TV.

    Rent on!

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  5. bd

    RE: David S @ 4

    I see a lot of decent listings at $300k and lower. Can you get a McMansion for a pittance? No.

    Can an engineer buy a decent place to live, and have $400 dollars a month to sock away?

    Of course, unless he is a very poorly paid engineer. What are kind of engineer are we talking about here? Train?

    Certainly, you might still want to rent, but perhaps your expectations are wee bit high.

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  6. Scotsman

    The two homes in the Rainer Valley would make great grow houses with those basements. Shoot, after a couple of good crops a guy might have enough to move up to the McMansion of his dreams. Kinda gives new life to the idea of a “property ladder.”

    Agriculture once made America great- the world’s “bread basket.” It can do so again.

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  7. Jonness

    By bd @ 5:

    RE: David S @ 4

    I see a lot of decent listings at $300k and lower. Can you get a McMansion for a pittance? No.

    Can an engineer buy a decent place to live, and have $400 dollars a month to sock away?

    Of course, unless he is a very poorly paid engineer. What are kind of engineer are we talking about here? Train?

    Certainly, you might still want to rent, but perhaps your expectations are wee bit high.

    Where does he have to work to be able to afford the $400K home? As a surgeon in the local hospital?

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  8. Jonness

    By The Tim @ 6:

    By David S @ 4:
    Have you seen what’s available for only $300k? It’s not what dreams are made of that’s for sure.

    Well, since the median sale price of single-family homes in King County was just $315,000 in January, I’d say nearly half of what’s selling is $300k and under.

    I see a lot of crap out there that I wouldn’t want to live in for $300K. (but occasionally, I do see a pretty decent little house in this range)

    Maybe I’m just spoiled, but I expect an upper middle class family salary to be able to purchase an upper middle class family home (with 20% down and not having to scrimp on the kid’s school clothes and meals).

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  9. David S

    RE: The Tim @ 6 – What I’ve seen at $300k is too remodel ready. You know, 20 year old roof, original furnace, super flow toilets, etc. I’ve seen far too many hobby houses at $300k price point.

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  10. David S

    RE: Jonness @ 9 – Tell me about it pal.

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  11. whatsmyname

    By Jonness @ 9:

    Maybe I’m just spoiled, but I expect an upper middle class family salary to be able to purchase an upper middle class family home (with 20% down and not having to scrimp on the kid’s school clothes and meals).

    Don’t forget about the building of wealth over time. Seems there are many who expect right out of the gate to have what their parents spent 25 years accumulating.

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  12. gr8day

    I agree with Jonness and David S. $300K and it has a leaking roof, cracked driveway, single car garage and a small galley kitchen with oak cabinets. Really? for 300K? Too many homes on the market are “remodel ready” at the 300K price range.

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  13. softwarengineer

    RE: gardener1 @ 14

    SWE is Planning on Retiring Other than Seattle, If He Can Retire at All….LOL

    Hades, I can trade my way over-priced SE King County home for five times more land [at least] and upscale my dwelling too for the same value [or less even].

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  14. MacroInvestor

    RE: gardener1 @ 14

    This should be a bluey… best comment in a week.

    Yes, it makes no sense. Seattle used to be a shining, tree-lined city full of blue collar, sensible people. Now it’s a run-down, overcrowded, gang invested average American city. The majority of people are listening to the media and not bothering to look around and form their own opinions.

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  15. Kary L. Krismer

    By gardener1 @ 14:

    Dear god, I cannot fathom why anyone would commit 30 years of hard earned wages into a crapshack like the housing that is available in Seattle. .

    It’s because others are more successful than you. They have more assets. They earn more money.

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  16. David S

    Read houseflipper’s comments on this thread if any of you are interested in what an investor with integrity considers when flipping.

    http://forums.redfin.com/t5/Seattle/Flipping-alive-and-well/td-p/287629

    I even try to consider this type of cost analysis with a realtor on a retail transaction offer and I’ll get run out of town. I’m not supposed to think this way, like an investor, according to them.

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  17. softwarengineer

    RE: MacroInvestor @ 16

    I Totally Agree

    If ya checked down thumb on blog 14, SWE will bet money you’re in one or more of these catagories:

    1. Underwater in Seattle home debt
    2. Just arrived in Seattle and somewhat delusional
    3. All of the above

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  18. bd

    RE: softwarengineer @ 19

    Or as Kary L. Krismer points out @17

    4. They may have much, much more money than gardener1

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  19. Blurtman

    RE: gardener1 @ 14 – Come out with your hands up and surrender to the drone outside your window.

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  20. gr8day

    Gardener@14-
    You are not alone in your mystification. 300K is easily 500k once you add in 30 years of taxes, repairs, interest etc. “Why do they do it” you ask. IMHO – they listen to the fear-based media, who print front page articles that imply “buy now or be priced out forever”. As I have stated before on this site – if you turn it into a math problem, the numbers do not pencil out on many home sales in the last 10 years. Even today, I still see many that need major regular maintenance – let alone updates and preventative maintenance – and, they are still listed for 300K!!!

    Today, there was a mortgage relief bill signed by the President. Gov’t money will be used to lower interest rates, lower principal, and to prop up house prices. Unbelievable. Why does the Govt use my tax dollars to lower someone else’s mortgage debt? The current administration wants Seattle house prices (tenement dwellings as you called them) to stay high. Why? IMHO – It cripples the economy – If house prices were lower, we would spend less on housing and more on education for our children. And if not education, how about a trip to the dentist, or _______________(fill in the blank). With this “mortgage relief” bill, the 300K house may just stay at that price.

    From MSNBC:
    Money breakdown:
    Under the terms of the agreement, the servicers are required to collectively dedicate $20 billion toward various forms of financial relief to borrowers. At least $10 billion will go toward reducing the principal on loans for borrowers who, as of the date of the settlement, are either delinquent or at imminent risk of default and owe more on their mortgages than their homes are worth.

    At least $3 billion will go toward refinancing loans for borrowers who are current on their mortgages but who owe more on their mortgage than their homes are worth. Borrowers who meet basic criteria will be eligible for the refinancing, which will reduce interest rates for borrowers who are currently paying much higher rates or whose adjustable rate mortgages are due to soon rise to much higher rates.

    Up to $7 billion will go towards other forms of relief, including forbearance of principal for unemployed borrowers, anti-blight programs, short sales and transitional assistance, benefits for service members who are forced to sell their home at a loss as a result of a Permanent Change in Station order, and other programs.

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  21. softwarengineer

    RE: Blurtman @ 21

    They’ve Been Using Drones for Years in SE King County

    On summer nights ya see this relatively noiseless light in the sky slowly drfiting above you, a small aircraft BTW, IMO….IMO, probably equipped with camera and other devises….

    It could be a privately owned toy aircraft type, but I doubt it, it flies at night…albeit I assume no one flies toy planes at night…they can’t see them and they may get broke.

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  22. Scotsman

    Yeah, more free sh*t for homeowners! It’s a great time to buy- before long the government will be paying off your house for you. Buy now before all the good ones are snapped up!

    People are worried about money in politics and what is spent on elections. It’s truly chump change compared to what the government spends buying votes through legislation like this.

    U.S.A.- United Socialist Americas (Yup, we finally got Canada and Mexico to join up- we needed their oil/energy).

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  23. Kary L. Krismer

    By Scotsman @ 24:

    U.S.A.- United Socialist Americas (Yup, we finally got Canada and Mexico to join up- we needed their oil/energy).

    Apparently, we don’t.

    http://www.usatoday.com/news/washington/story/2012-01-18/obama-rejects-keystone-pipeline/52655762/1

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  24. AxlRose

    Using 28% of gross income for a mortgage payment, an approx. $65k salary can buy a $300k mortgage at current rates. I don’t recall the median salary in the area but it’s not too far from $65k. $100k buys over $450k of mortgage. Factor in double income families, and a little bit of tech wealth, and a $315k median sounds rather reasonable. I know there are plenty of people around making these kinds of salaries, or much more. I’m an average IT guy and I’m able to afford a $400k mortgage and stay within the golden rule of 28%. Maybe the difference between myself and commenters here is that I never looked for a home in Seattle proper, but stuck to the eastside, where I work, so maybe the housing stock is better because it’s generally newer. I also don’t have any other debt mucking up the picture. But the prices seem pretty close to in line with salaries, at this point.

    (Sorry for the name change again, tim, but the last one was no good for permanent use. I won’t change it anymore.)

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  25. Blurtman

    RE: Scotsman @ 24 – Fascism is more like it. While it remains to be seen how much mortgage principal reduction actually occurs, homeowners (squatters?) would be getting nothing if it were not in the interests of the banking cartel. If you think this mortgage fraud “settlement” is an example of socialism, think again.

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  26. Ira Sacharoff

    By Blurtman @ 27:

    RE: Scotsman @ 24 – Fascism is more like it. While it remains to be seen how much mortgage principal reduction actually occurs, homeowners (squatters?) would be getting nothing if it were not in the interests of the banking cartel. If you think this mortgage fraud “settlement” is an example of socialism, think again.

    Fascism is such a loaded word, though. While what we’re living in resembles fascism and indeed shows a close family resemblance, it’s more of an oligarchy, a plutocracy, a corporatocracy, or my favorite, a kleptocracy.

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  27. Seattle Bubble • Reader Rant: Seattle Home Prices Still “Make No Sense”

    [...] in a while a reader leaves a comment that deserves its own post. In the wee hours this morning, gardener1 left such a comment: Dear god, I cannot fathom why anyone would commit 30 years of hard earned wages into a crapshack [...]

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  28. John Bailo

    Does Redfin integrate any kind of Crime or Safety statistics with its listings…like map heat areas?

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  29. Kary L. Krismer

    By WaterView @ 29:

    I have had a string of bad landlords up until I purchased this home, I am so glad to be done with them and to have a little garden spot I can do what I choose with.

    I’ve only lived at three different places over the past 30+ years, if you ignore the apartment we rented for a few months during our remodel. So that is two moves in 30+ years. It’s possible, but difficult to have that kind of stability renting, and if you do manage it, you would likely have had more landlords than places you lived.

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  30. Blurtman
  31. Scotsman

    RE: Ira Sacharoff @ 28RE: Blurtman @ 27

    You’re right of course, and I agree. I just choose the easy label.

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