A few months ago I had the privilege of sitting down at a local coffee shop with a long-time Seattle Bubble reader as he shared his home buying story with me, and now I’d like to share his story with you.
“Bruce” got married in 2005, and like many young couples, he and his wife thought that might be a good time to put apartment living behind them. So, they started looking for a house to buy on the Eastside near Bruce’s job.
Bruce spent some time looking at homes online and feeling out the market, but after a while, he began to sense that something was a little off. “Prices were going up like crazy,” giving Bruce and his wife reason to slow down and spend a little more time investigating. Not surprisingly, when Bruce began to seek answers to what was going on in the Seattle-area housing market, it wasn’t long before he found Seattle Bubble.
“I really liked the analytical approach.” Inspired by the stats-based analysis on Seattle Bubble, Bruce drew up his own modeling of his specific local market. He compared his current rent to what it would cost him to buy, looked at prices in markets with similar economies, and analyzed the complete cost of owning.
After completing his analysis and realizing that they could not afford to buy a home without making serious compromises (commute, size, features) to get into any home at all, Bruce and his wife decided to hold off until the market came back down to earth.
Meanwhile, some of Bruce’s friends and coworkers got caught up in the hype and bought homes in 2005 and 2007, ending up forty-five minutes to an hour from their jobs, their kids’ schools, and all of the communities they regularly participate in.
Even though he decided not to buy right away, Bruce didn’t just stop looking for homes. He spent the next few years watching Redfin, saving notes on properties that looked interesting, and over time was able to get a really good feel for how much a home on the market would eventually sell for—a crucial skill to develop if you want to get a good price when you buy a home.
In late 2009, with prices off over 20% around Seattle and a baby on the way, Bruce and his wife began looking more seriously again at buying. They found individual sellers to be stubbornly clinging to fantasy pricing, but builders were willing to price homes to sell. They put out an offer on a home in a relatively close-in Eastside new construction development in December, and proceeded to engage the builder in three months of back-and-forth offers/counteroffers before finally coming to an agreement and closing the deal.
Bruce points out that his friends who bought in ’05 and ’07 are still living in their far-flung homes, driving hours a day to and from homes that they now can’t afford to sell.
While Bruce feels he could have probably gotten a slightly better deal if he had been able to wait a little longer, the timing was right for his family, they found a home that meets their needs, and they can comfortably afford the payments. Bruce notes that their only compromise was “probably a little bit on the price,” but that they bought “what they absolutely like,” in a neighborhood that is close to everywhere they want to go.
My favorite quote from my meeting with Bruce:
Anybody who is buying a house without [researching] using Redfin and Seattle Bubble is probably making a mistake.
Congrats to Bruce for exercising patience, avoiding getting trapped in the remote ‘burbs, and holding out for the house he really wanted in the neighborhood he really wanted to live in.
Full disclosure: The Tim is employed by Redfin.