It’s not often that I actually laugh out loud at a news headline, but congratulations to Elizabeth Rhodes, who actually achieved that with the gem “Local homes: Investments that just keep getting hotter.“
Forget your home being your castle. Thanks to surging local home prices, your home is now your portfolio.
After giving thanks that you bit the bullet and bought, consider this:
The median prices of King County’s detached homes and condominiums have climbed 16 percent since the first of this year — despite a growing number of homes listed for sale — leaving both the S&P 500 and the Nasdaq in the dust.
That puts Puget Sound-area sellers firmly in control — a situation that’s increasingly more memory than reality for sellers in other parts of the country, where the housing market is cooling.
Because the Puget Sound area’s economy is strong, we’re adding buyers who can absorb higher interest rates, said O.B. Jacobi, owner and broker of Windermere Real Estate’s Wedgwood office. Rates have climbed from an average 5.62 percent a year ago to 6.79 percent this week for 30-year fixed-rate loans, according to mortgage-money provider Freddie Mac.
It’s not that I don’t believe that home prices are going up—that’s an obvious fact. I just find it quite amusing that Mrs. Rhodes’ home cheerleading rhetoric seems to be getting more extreme every month. No mention of a (highly likely) stagnation or decline in housing’s near future. No mention of the insane measures that must be taken to actually pay for these “portfolios.” Barely a passing mention of the steadily increasing supply vs. decreasing demand, and only lip service to the ever-increasing difficulty that buyers are having getting into a home.
On the other side of the equation, home seekers like Natalie Paige feel increasingly squeezed and discouraged by the high prices.
“Literally two years ago in Ballard, I looked at a small, single-family house and remember thinking, ‘Oh my God, it’s $250,000,’ ” said Paige, a single mother and culinary administrator for the cruise-ship company Holland America Line. “What I wouldn’t do for that house now.”
House prices in the Ballard neighborhood where she rents and wants to stay have doubled in the past two years, Paige says, leaving almost nothing around the $265,000 she can spend. One house she did find was about 800 square feet and cinderblock construction.
“I’m not willing to pay a $1,700 mortgage for that,” she said.
It would seem that Ballard is everybody’s favorite neighborhood to pull hot housing anecdotes from.
(Elizabeth Rhodes, Seattle Times, 07.07.2006)