Posted by: 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.

21 responses to “Poll: The Seattle area is becoming a _____ place to live.”

  1. redmondjp

    Come visit downtown Redmond and see what U.N. Agenda 21 housing looks like.

    Also Coming Soon to Overlake (old Group Health campus)!

    With Light Rail service in the year 20__ . . .

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  2. John Bailo

    …becoming a “same as everywhere else” place to live….

    Seattle is a very successful city. So successful that ever other city on Earth, and certainly in US has become Seattle. Not only every city but every suburb.

    Every place now has or wants high tech jobs (even NYC gave up on finance and been building incubators). Every place is emphasizing green tech and bicycles. Every place wants and is building the kind of transit-rich, yet walkable and livable small plot family homes that made Seattle famous. Even Memphis, TN has indie bands, craft beers, marathons and food fairs. I’ve seen BRT in Eugene and Sears Craftsman style homes in Fort Collins, CO (they even named the streets in one development with Northwest flavor…Salmon Road, and so on…)

    Seattle used to be America’s Last Middle Class city.

    Now, the situation is reversed.

    Everywhere is Seattle.

    New York is a Seattle
    LA is becoming a Seattle
    Kent has a downtown apartment complex and a transit center.
    Kent is a Seattle

    The only people yet to find out about this, and to adjust their expectations accordingly, are the Seattlites themselves.

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  3. Blurtman

    Sloviansk is not Seattle.

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  4. John Bailo
  5. Shoeguy

    In ten years, when Seattle is blighted with “Micro-Apartments” and everyone is crowded and miserable, I don’t want to hear a single bit of dogging considering most of you feel that a 5:1 House price to income ratio today is perfectly reasonable considering how “High tech, hip, and trendy” Seattle is.

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  6. Joe M

    I don’t understand how more than half those voting say Seattle is becoming a better place. Are you joking? Teasing those of us who live here? What?

    Maybe you read the polling question wrong.

    This city is becoming a ratbox tunnel.

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  7. Christian Wathne

    Is traffic getting worse/costs going way up/etc?…Yes. However, personally, I’m ok with that and I see the gentrification of most parts of Seattle a good thing.

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  8. Jack

    Better for some, worse for others.

    Better for those who had a firm foothold here, inherited or bought housing and thus have fairly fixed COL for the years to come.

    Worse for me, with no inheritance, still paying off student loans, and close to getting priced out of the city.

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  9. Blurtman

    RE: John Bailo @ 4 – Mind the incoming.

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  10. Erik

    Easy place to live

    I remodeled a condo and made $128k without really knowing what I was doing. I lost my job and got another one that pays more. Seems like stacking chips isn’t really that difficult around here. Most people make good money, so they don’t really mind overpaying for housing. That is a good thing for those of us that are able to take advantage of that.

    Around here, you can buy a fixer for $100k, put $20k into it and sell it to someone that just wants to live in something pretty for $200k. Not sure other parts of the country are like that. I want to be the middle-man that collects the 80k and delivers a pretty, move in ready home.

    Back in 2006, you just had to paint the front door red and that would increase your value $20k. I think now it’s all about ripping out the carpet and putting in hard flooring.

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  11. Erik

    RE: Jack @ 8
    I hope you atleast got a high paying career to pay off those student loans.

    Buy a house and remodel it. Work hard everyday after work on it. Make it a routine. Pay off your student loans with that money. If you decide you don’t want the house, just stay in it without paying rent until the bank kicks you out. You will be forgiven eventually for foreclosing. As you probably already know, those student loans do not go away. Home loans do go away if you don’t want to pay anymore.

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  12. Saulac

    By Erik @ 10:

    Around here, you can buy a fixer for $100k, put $20k into it and sell it to someone that just wants to live in something pretty for $200k.

    Around where?

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  13. Erik

    RE: Saulac @ 12
    I think alki is a good spot to buy a condo right now. Prices over there have to catch up sometime. There are still occasionally good deals in Juanita for condos. I like condos because the work to get them nice and the money it takes is much lower than a house. Plus most of the labor is inside. Ray does well with houses, but he partners up with people and he owns his own real estate agency. For us poor folk, condos are in our wheel house. You should do one. Christian nailed a great deal in Capitol Hill. I am not sure where I will end up. You should get one too. We can all talk about it on here and get ideas.

    The numbers are slightly higher. I got mine for 92k, put less than 20k into it and sold it for 233. I waited 2 years so I wouldn’t have to pay Capitol gains tax. Moving forward, I don’t think the market will increase as fast, so I think turning a project around faster is necessary to be highly profitable. Less gain per condo, but do it quicker. Like one a year or quicker.

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  14. Jay

    RE: Erik @ 13 – Thanks for sharing your success! Is it a good idea to buy a condo that is in a bad condo complex? For example, the buildings are in rough shape and not well maintained! I saw your condo pictures from Ardell’s blog, and the building looked well maintained and had new windows. It is easy to renovate the inside, but if the outside is not as nice as your condo complex, even if I can renovate the interior, do you think I can flip it for a profit? How much is it to completely renovate a 2 bedroom condo (new kitchen, new carpet, new paint, clean up bathroom, new stair railing)? Thanks!

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  15. redmondjp

    RE: Jay @ 14 – Read these:

    http://seattlebubble.com/blog/2010/04/30/shifty-llc-shoddly-construction-82-owners-up-a-creek/

    http://www.businessinsider.com/80-condo-owners-in-redmond-wa-voted-to-mass-default-2010-4

    In my own personal experience with friends who have owned condos in this area, more people than not have had to pay special assessments to completely re-skin and re-roof their buildings. In some cases, requiring the owners to move completely out of the building for 6 months or more. And then getting to pay $30-50K that they weren’t expecting to.

    Do your due diligence first . . .

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  16. Jay

    RE: redmondjp @ 15 – I read about the Riverwalk Condo. I definitely don’t want to buy a unit that will end up like that in the near future!

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  17. Erik

    RE: Jay @ 14
    When I bought the condo, the outside looked terrible and the outside was primer and not paint. My windows were aluminum and I could feel a breeze coming through. I replaced my windows. I helped do work around the complex with things like building a fence. When painting was suggested, I chose colors and managed the project by meeting with the paint contractor so it would happen. We paid an assessment of around $2500 or something. Get involved and help make the place nice. Everyone wins.

    I may have gotten a little lucky, but I really helped make the complex nice for everyone by taking initiative when the hoa wanted something done by finding contractors, picking up bark, building fence, painting, etc. Once your efforts are noticed and people see things getting nice, they will respond by doing more improvements. I made friends doing this and it was fun.

    Cost to remodel a condo? I sent Tim a report I wrote on my estimates to remodel my condo and who was gonna do the work. He should post it to give people an idea how to estimate costs. Estimating cost is tough and I would have to know the details to guess. All the things you listed are cheap except the kitchen. It all depends on what is involved in the kitchen remodel.

    You can definitely be successful if you work hard and get involved in helping your community. Condos are risky though because there are always people that don’t like change in the community. At my that condo I was at, the first president left and things improved. If you have a bad hoa board you could be screwed. I say go for it and see what happens. If you don’t try, I guarantee you won’t be successful flipping a condo. If you try it, your odds of being successful improve dramatically.

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  18. Jay

    RE: Erik @ 17 – Thank you so much for your advice! I would love to see your report! If TIm can’t post it, perhaps you can send it to Ardell, so she can post it on her blog. I think you should also start your own blog, and put things up on your blog. I will definitely follow your blog. Since you did so much work for your condo, it was really your second job!

    Is it better to flip a condo, or a house then? For a house, there is no HOA. You can do whatever you want with a house!

    What is the tax rate for short term capital gains? Since Washington state has no income tax, there is just federal tax for capital gains, right? Is short term capital gain treated as ordinary income? Also, if I plan to flip it for less than a year of ownership, then I need to register as a general contractor. How much does it cost to get the insurance as a general contractor? When do I need to start registering as a general contractor? From the very beginning of the purchase, or before I sell the property?

    Thanks a lot!

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  19. Erik

    You are very kind Jay, but I do not deserve that much credit. I am not a professional at this like Ray Pepper is. I bought a house to remodel in North Everett and failed miserably. I ended up investing all my time and money into it and short selling it in the end. I bought that condo in Kirkland for $92.7k before I ruined my credit. The only reason I had cash for that condo was because I had been saving for a ring to get married, which didn’t work out, so I bought the condo 5% down instead. Instead of focusing my energy on my broken heart, I remodeled that condo partly to distract myself. I had $5k when I started and $128k when I finished, so everything did work out very well. It can be done. If I can do it, you can do it.

    I failed flipping the house in Ever-rot because the remodel kept dragging on and on, which is why I think flipping condos is better. I had no idea what I was doing and the work statement was way too big for me to handle. Not nearly enough money to remodel a 1906 house. Another lesson learned is to not buy in a dumpy area like north everett and expect to get returns. Like they always say… buy the worst house on the block. North Everett is not that. North Everett is a mixed bag of nice houses and crappy houses. Don’t invest in an area like that. Those areas will likely never be nice.

    I think this is how the capital gains tax thing works…
    Sell before a year and you are short term capital gains
    Sell between 1 year and 2 years and you are long term capital gains
    Sell 2 years and over and you owe no capital gains

    Now the rates…
    Profit = Sale price – Purchase price – Realtor fees – Remodel costs

    Short term capital gains = 15%(long term capital gains)+15.3%(ordinary income)=30.3% tax on your profit.

    Long term Capital gains = 15% of your profit

    No capital gains = 0% of your profit

    When I scored all that loot, I waited 2 years and 2 days to avoid paying uncle sam anything. Maybe this is a good approach for you to ease into things? Now that I have stacks of cash burning a hole in my pocket, I want to speed up the process and just pay the taxes.

    I have no idea about this general contractor and paying money for licenses business. Unless you are planning on turning these things over quickly, I wouldn’t worry about it. Ray Pepper is the man to ask though. He knows tons more than I do. He’s a really nice guy and he may offer you some free advice if you call him. I listen to what he says and I try to apply it. I am putting a bid in on an auction property this Thursday. I will ask about those things for you. I think it would be good to know for myself too so I don’t run into any trouble. If you want real legal advice on those things, you could pay to consult with Craig Blackmon with Quil. I think him or one of his friends knows that legal mumbo jumbo. It won’t be free though. They will probably charge you atleast a couple hundred dollars for a one hour consultation. Google is free, so I try to do my own research and go that route until I get into trouble. When I do get into trouble, I will come running to Craig begging for his help.

    I think you are stressing out and over thinking this. If I can do it, you can certainly do it. This is an art not a science. You just need to get out there and practice. If you mess up, you can always get atleast a couple years of free rent while it forecloses and recoup your losses. Just make sure you put as little down as possible and don’t spend too much money on the remodel. Focus on making the remodel pretty. That is what people will pay for. Don’t buy a place with structural problems, plumbing problems, electrical problems, etc. Buy an place with ugly appliances, ugly carpet, ugly paint and make it pretty. Windows are a good fix too. Updating electrical fixtures like switches and outlets is cheap and easy to do too. Pull out the baseboard heaters and put in King PAW heaters with a nice pretty digital thermometer.

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  20. Jay

    RE: Erik @ 19 – Good luck with the auctions! I went to Vestus last year, and it was full of people. Most of them were looking for rental properties. I also follow the foreclosure trend, a lot of them have been postponed or cancelled, especially the hot properties!

    If you are flipping a property for less than 12 months, you are required to be registered as a general contractor: http://seattle-wa-real-estate.blogspot.com/2008/01/flippers-are-required-to-be-licensed.html . So I am thinking to flip a house in 1 to 2 years. Then I won’t need to go through the complicated licensing! It’s going to take a lot of time and work too! Right now, I am so stressed out because of bidding wars! I think I will wait until the end of this year, and see how the market is going to turn out before jumping in! So do you think there will be deals after QE is over?

    There is no way I have time to do it myself. I have to hire a contractor to do most of the work. I talked to a contractor recently. And he told me about his pricing for a 2000 sq ft 1950’s split level house:
    1. replace all the old windows with new double pane vinyl windows (labor + parts) = $8000
    2. new torched down roof: $10,000
    3. labor for putting up new double garage doors: $800
    4. labor for installing bamboo floor for a living room (600 sq ft) : $1000
    5. 600 sq ft new deck with glass railing: $8000; metal railing: $4000
    6. replace all the siding with new concrete fiber board siding: $8000
    7. open up a window and install glass sliding door (labor + materials) : $1200

    Is this list of costs reasonable? Is it over priced or under priced? What should be the market price now? Can anyone refer me to some good contractors, please?

    Home Depot offers free installation of new carpet, and it seems to be pretty cheap to me. They do lots of renovation projects. Do they do a good job? Has anyone have a bad experience with Home Depot’s renovation team?

    By the way, Ray Pepper is not as scary as some people have described him here. So for people who have a bad experience with their agents, they should give Ray a chance!

    Thanks!

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  21. KyleK

    Seattle is becoming a much better place to live.

    I see/hear a lot of change resistant griping about new housing and density, etc. – I think a lot of the people who have these compaints either:
    A. Just wanted Seattle to be semi-suburban forever (apartments? In a city? NO!!!!)
    or
    B. Are letting nostalgia get the best of them (check those SPD crime stats for a taste of how awesome things used to be.)

    Seattle is adding jobs and people rapidly, so there are bound to be some growing pains. All in all the place is safer, wealthier, more cosmopolitian, more educated, better place to live. The fact that this poll is so close really goes to show how hard it is for people to see change (any change) as good.

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