Case-Shiller: Seattle Home Prices Keep Inching Up

behind the cycle, California, Case-Shiller, graphs, Statistics, Tableau

Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to June data, Seattle-area home prices were:

Up 1.8% May to June.
Up 1.8% YOY.
Down 27.3% from the July 2007 peak

Last year prices rose 0.7% from May to June and year-over-year prices were down 6.4%.

June also marks the first month since the tax credit was in play that the 10-city and 20-city composite indices turned positive year-over-year.

Here’s an interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities, courtesy of Tableau Software (check and un-check the boxes on the right):

In June every city gained again. Seattle came in slightly below the average, flipping from slightly above the average last month but still performing better than a year ago.

Case-Shiller HPI: Month-to-Month

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 cities.

In June, ten of the twenty Case-Shiller-tracked cities gained more year-over-year than Seattle (the same number as May):

  • Phoenix at +13.9%
  • Minneapolis at +5.7%
  • Miami at +4.4%
  • Denver at +4.0%
  • Washington, DC at +3.9%
  • Dallas at +3.7%
  • Tampa, FL at +3.4%
  • San Francisco at +3.0%
  • Portland at +3.0%
  • Detroit at +2.5%

Nine cities gained less than Seattle (or were falling) as of June: Cleveland, Charlotte, Boston, San Diego, Los Angeles, Chicago, Las Vegas, New York, and Atlanta.

Here’s the interactive chart of the raw HPI for all twenty cities through June.

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

Case-Shiller HPI: Decline From Peak

In the fifty-nine months since the price peak in Seattle prices have declined 27.3%.

Lastly, let’s see just how far back Seattle’s home prices have “rewound.” As of June: December 2004.

Case-Shiller: Seattle Home Price Index

Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 08.28.2012)

0.00 avg. rating (0% score) - 0 votes

About 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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.


  1. 1
    fubarrio says:

    this makes perfect sense to me, what with the higher net incomes every household now enjoys over expenses…oh wait, what?

  2. 2
    Macro Investor says:

    Places like Detroit, Atlanta and Chicago up 4-6% — obviously it’s location location location driving that. The bankers and politicians are saying everything is great. What could possibly go wrong? Buy now… it’s the opportunity of a lifetime /sarc

  3. 3

    RE: Macro Investor @ 2 – Detroit and Atlanta are a bit different. Both are seriously depressed areas (particularly Detroit), and didn’t really have a significant bubble. So that small up movement is really just a result of how far they’ve dropped.

  4. 4
    David Losh says:

    “The combined positive news coming from both monthly and annual rates of change in home prices bode well for the housing market,” said David Blitzer, chairman of the S&P’s index committee.

    Jonathan Basile, an economist with Credit Suisse, said improving home prices should boost home sales further in the coming months.

    “Persistent news of rising house prices should start convincing prospective home sellers that it’s not just a buyers’ market,” Basile said. “And when Americans become more comfortable with selling their home, they also become more comfortable with buying another one.”

    That is an excerpt from a news article this morning.

    Sellers should sell for whatever they can get, but they should hold off buying another albatross.

    The past five years have been dismal for home buyers who have paid high prices with those low monthly mortgage payments. This pricing is reflecting that affordability of low payments which is also mentioned in the article.

    There will be a point where prices once again hit a new low that will be in line with the new direction in housing.

    Housing is a temporary stopping point except for those who can be guaranteed long term employment. I don’t see that happening no matter who gets elected.

  5. 5
    Carl says:

    I love climbing the wall of worry on real estate. The bearish comments on the SeattleTimes article is actually good. I would be real worried if we had bullish posters here. Nice and slow and safe upticks – exactly what the doctor ordered.

  6. 6
    Scotsman says:

    Get Rich In Real Estate!

    Send me $29.99 and I’ll show you how. Boo-Yah, Jim!

    Finding yourself in the eye of the hurricane doesn’t mean the storm is over.

  7. 7
    ARDELL says:

    RE: David Losh @ 4

    Even with a positive outlook as to long term employment, the days of that long term employment being in one place are over. I don’t really know the answer to housing that people are not going to live in for 30 years. Most people with awesome long term security in their jobs and upward mobility in their income simply do not stay in the same location forever as to employment the way they used to.

    They transfer to the Bay Area or New York or even out of the Country to London. Then of course there is divorce. The days of Mom and Pop staying together forever and living and working in the same place until retirement are just gone.

    The problem isn’t so much the housing market as it is people buying homes and wanting to sell them within 3 to 5 years. No longevity. It’s going to be a tough nut to crack, but easier just to blame the President whoever he may be when the shit hits the fan. :)

  8. 8
    David Losh says:

    RE: ARDELL @ 7

    What the heck happened to you? You’re all fired up in your comments lately, and good for you, we all should be.

    My question is why we have a Standard, and Poors Real Estate Index to begin with.–p-us—-

    What good does it do in the individual purchase of a family home?

    We look at the data, which is sales data, but who does this data benefit? Who stands to use the data to make money?


    Banks lend money in excess of value, and have for the past ten years, at least. Banks rely on you to make your mortgage payments no matter what. Banks are lending on your promise to pay just like giving you a credit card.


  9. 9
    ARDELL says:

    RE: David Losh @ 8

    “What the heck happened to you? You’re all fired up in your comments lately,…”

    I was busy as hell…it’s now end of “high season”. Getting ready for 4th quarter investor profiteering. :) Taking a week off in between. I’m in “play mode” through 9/6. I’m even planning to go Ride the Duck with my grandkids before they head back to L.A. on 9/6 to start school.

    “Banks lend money in excess of value, and have for the past ten years, at least.”

    Not the case, David. Banks are mostly back to lending 80% of what a home is worth, so they can afford to be 5% off this way or that on the appraisal. 10% even. We are back to the days when Private Mortgage Insurance is paid to cover the top 20% of a home’s value, or people are putting down 20% in cash.

    At 80% exposure on the valuation, the appraisal can be a tad on the high side and the bank will still be in the safe zone. They have retreated back to their original and safer position.

  10. 10
    Nick says:

    Seattle is attracting high-income professionals. If you find yourself in the 25%+ marginal federal income tax bracket, it makes a WHOLE lot of sense to buy. Even if prices stagnate, you’re still better off owning than renting once you factor in the tax implications.

    But the fact is prices are increasing. Rents are increasing. This economy is leaving many behind, yes. But enough are profiting that bidding wars are now common.

  11. 11
    wreckingbull says:

    By David Losh @ 8:

    My question is why we have a Standard, and Poors Real Estate Index to begin with.
    What good does it do in the individual purchase of a family home?

    Funny you ask that. It was the long-range C/S graph that made me realize in 2007 that things were wildly out of whack. All I had to do was visualize the regression to the mean to decide when it made sense to buy. I owe everything to that index. Does that answer your question?

  12. 12
    David Losh says:

    The very fact Carl is using a term like bearish to describe Real Estate indicates to me that my assertion is correct.

    I don’t see prices rising. I see higher priced properties selling. We haven’t even addressed rents yet because the number of projects that have been under construction these past two years aren’t finished.

    I disagree that banks are making safe bets. Banks are lending to better qualified buyers. The value of the property remains the same, but the price of the property is in excess of value.

    The high prices are due to this mechanism where we look at a composite of pricing through this index.

    Sales data makes no difference to the value of the asset. As time goes on, and the asset is nonperforming, more people will either walk away, take the loss, or in general move onto something else that will generate a profit.

    I don’t see the “investor” profits, so I really don’t see mom, dad, and the kids getting anything other than deeper in debt.

  13. 13
    No Name Guy says:

    RE: Nick @ 10

    Yes….pay 10,000 a year in interest to save 2500 a year in taxes……great advice. \snark

    Lets see, net I’m down……have to do the math, since it’s difficult……10,000 paid to the bank in interest to not pay 2500 to the feds, lets see that works out to being down 7500 a year on that proposition.

    Make the calculation on buying versus renting by taking ALL the costs and intangible factors into account. And then, if you decide to own, then OWN, don’t get into the perpetual renting from the bank. Get a place below your means and PAY IT OFF, ASAP. Free and clear is owning, carrying a mortgage is just another form of rental.

  14. 14
    David S says:

    RE: No Name Guy @ 13 – Yes it has been liberating to rent from the landlord rather than the bank. There is some premium paid for this. Renting from the bank requires I be liable for all property maintenance, upgrades and eventually selling expense.

    I find selling a house $400,000 in ten years to cost about $333.33 a month for ten years.

    And also, I upped you for your take on the interest deduction. Winning the money away from the fed does not make it a winning proposition overall.

  15. 15

    RE: Nick @ 10
    It seems to me that when making predictions, people tend to look at what just happened and decide that that’s what’s going to happen in the long term future. I’m not convinced that price rises are here to stay, and given the differential in rents and home prices in those houses that folks in the upper 25% income brackets want to live in, it may make more sense to keep renting. If the house payments are 4000 per month, and the rent is 2750, and you saved 1250 per month, just how much wiser financially is buying?
    There are lots of good reasons to buy houses, but looking at charts and seeing that prices have been rising for a couple of months is not one of them. A couple of months don’t really indicate anything.

  16. 16
    wondering says:

    I’m wondering… when people compare prices of renting vs. owning, as well as the ammount it is worth paying, it seems that most people only count today’s cost. Can someone tell me if I’m missing something in the following analysis:

    With renting, I can expect on average a ~2-4% increase in costs due to inflation as long as I rent.
    With owning, if I get a fixed rate mortgage, my mortgage payments remain fixed in absolute dollars, which means that I get a 2-4% discount as inflation eats away at the purchasing power of the dollar. If I assume that mortgage payments are about 75% of total cost of ownership (25% for property tax and maintenance, which will go up with inflation). Then my effective cost as a home owner would go down by something like 1.5-3% per year. Buying also benefits from the fact that after 30 year (or less w/ a shorter mortgage), expenses drop dramatically since mortgage payments go to zero.

    This would mean that ownership is still a net win even if he payments are slightly higher at time of purchase than cost of rent. The neutral state would depend on inflation expectations, but in normal (for US) rates of inflation, it is probably worth paying ~ 15-20% more for initial total cost of ownership vs. rent, since inflation would bring the ownership costs to be equal to rent after something like 10 years, and ownership would have lower total costs after the 10 year mark.

    The only counter argument I can think of is the trade off of spending the down payment on the property vs. investing it. Without going into detailed calculations, I think this factor has minimal impoact because apprciation of the property over the long term (30 years = multiple realestate cycles) would provide enough ROI (even if assuming apprciation at only the rate of inflation) to make the down payment pay off at a moderate rate of return.

    Obvously all of the above is irrelevant if the buyer believes that property values are seriously out of balance and will change signifcantly (up/down). This quesiton is purely about evaluating the trade off of rent vs. buying.

  17. 17

    By wreckingbull @ 11:

    By David Losh @ 8:

    My question is why we have a Standard, and Poors Real Estate Index to begin with.
    What good does it do in the individual purchase of a family home?

    Funny you ask that. It was the long-range C/S graph that made me realize in 2007 that things were wildly out of whack. All I had to do was visualize the regression to the mean to decide when it made sense to buy. I owe everything to that index. Does that answer your question?

    Given the correlation between the C-S number and the NWMLS King County median, you could have done the same thing with the latter. I’m pretty sure Tim was posting graphs of that data back in 2007, right?

    To answer David’s question, my understanding was the S&P was going to sell financial instruments based on the C-S data. Personally I think investing based on black box data would be stupid, but if people want to do it . . .

  18. 18

    By No Name Guy @ 13:

    RE: Nick @ 10 – Yes….pay 10,000 a year in interest to save 2500 a year in taxes……great advice. snark.

    That would be an incredibly good result, and probably only happen when the real estate taxes were about $10,000 or more a year.

  19. 19

    By Ira Sacharoff @ 15:

    RE: Nick @ 10 – It seems to me that when making predictions, people tend to look at what just happened and decide that that’s what’s going to happen in the long term future. I’m not convinced that price rises are here to stay

    I would agree with the first sentence. As to the second sentence, I’m yet to be convinced that price increases have occurred! I did see a recent sale where the only way I could justify the sales price was a buyer frenzy, but one sale is not sufficient evidence. I have no doubt some markets have gone up, because that’s almost always the case. But I’m not convinced we’ve had an actual YOY increase when you back out the change in mix.

  20. 20

    RE: wondering @ 16 – Yes you should factor in expected inflation, but how important that is depends on how long you plan on staying.

    Back in 1978 that period of time was probably only about 3 years. Now it’s longer, and some would argue you need to consider the possibility of deflation.

  21. 21
    ARDELL says:

    RE: wondering @ 16

    I believe the marginal tax bracket for a household earning $175,000 or more is 33%. I had reason to look this up recently and ask that someone double check that and call me wrong if that is not correct. While I have advised the various clients in that bracket to seek out the advice of an accountant, I am using 33% as the marginal tax bracket for clients earning $175,000 plus the annual interest payment and RE taxes. i.e. the income is still over $175,000 after the write off.

    It is rare to see someone talk in terms of marginal bracket as people have a tendency to think in terms of overall tax rate as in 23.5% total as to taxes paid vs playing the marginal bracket appropriately. Consequently I think it is worth a few minutes of public discussion.

    If I have a client buying a $550,000 home with 20% down the annual interest is $17,000 a year and the annual taxes are $5,000 a year. That’s a $22,000 write off in the first year.

    If the married couple’s income is $200,000 a year and everything over $175,000 is taxed at 33% then the $22,000 write off equals a tax benefit of $7,260 given an owner gets to write off, dollar for dollar I believe, interest and RE taxes against their earned income.

    Let’s say the home would rent for $2,000 a month at an annual cost of $24,000. Buying it would be a monthly payment of $2,070 a month (used 3.875% as the rate) or $24,840 for the year less $7,260 makes for an after tax annual cost of $17,580. That would put the savings of buying vs renting in the first year of ownership at $6,420 in the first year of ownership.

    This assuming there are no major improvements needed during the first year of ownership, which should often be the case.

    Marginal Tax Bracket is the rate at which your last dollar is taxed, not taking your annual taxes paid divided by your gross income earned. Deduction come off the top…or at the highest rate of taxation. Again, not much reason to post this in conjunction with some of the after tax comments above except to describe the difference between average taxes and “marginal tax rate” because I often see people applying the average vs the marginal rate.

  22. 22
    whee says:

    When we rented, rent was flat (no % increase with each year). That is not at all uncommon with longer-term rentals, as the landlord would rather have the steady guaranteed income. And ardell’s math craters if the renter is facing flat rent, or if the homeowner is financing on less than 30 years of debt. It also craters more generally, as 175k+ is where deductions start phasing out, including the mortgage interest deduction (specifically, the mortgage interest deduction starts phasing out at an AGI of just under 167k).

    People forget that when you earn in the top 5-10% of incomes, you start only getting part of the deduction benefit and sometimes lose out entirely until you cross into 500k or so earnings land where you can afford shelter the money more inventively.

    Even on a high income in this region, it’s still not that great an idea to buy debt at even 4% for 30 years. That is making a lot of assumptions about preserving one’s ability to earn DINK income to cover that note for several decades.

  23. 23

    By ARDELL @ 21:

    If I have a client buying a $550,000 home with 20% down the annual interest is $17,000 a year and the annual taxes are $5,000 a year. That’s a $22,000 write off in the first year.

    Only if they have about $10,000 of other deductions. Without anything else they’d only be able to deduct about $12,000. So at a 33% marginal bracket they’d save about $4,000 by paying $22,000. That’s about an 18% savings.

    If you just ran those numbers on the interest portion, it would be different. Saving $4,000 by paying $17,000 in interest would be a 23.5% savings. The reason you might do it that way is the other option is buying with cash. In that scenario you’d still be paying the tax amount, eating up about half of the standard deduction.

  24. 24
    ARDELL says:

    RE: Kary L. Krismer @ 23

    Thank you Kary. Good point. I used marginal bracket more when buying and selling in stock and bond portfolios in my previous life, and we did not factor in the Standard Deduction when making those decisions. That is why the answer is 33% UNLESS your accountant tells you otherwise, as in if you don’t have at least $10,000 in deductions not related to your RE deductions for charitable giving, business expenses and whatnot.

  25. 25
    ARDELL says:

    RE: whee @ 22


    I find that most often the math “craters” due to life getting in the way of optimal long term actual performance.

    Just saw a question in the Redfin forum a day or two ago from someone who just bought a house in the Seattle Area…and is now taking a job in CA.

    Have at least one current client who needs to sell or rent his current primary residence because he is transferring with the same company to NYC.

    Another due to medical issues of a child has had to change careers altogether and move out of State at the same time.

    The Best Laid Plans of Mice and Men will Crater based on a change in life circumstances, more than they will on the pure math of the original supposition. The proofs to support or disclaim the supposition tend to play out in the ensuing years based on moves and divorces vs change in financial circumstance without regard to life events.

  26. 26

    By ARDELL @ 24:

    RE: Kary L. Krismer @ 23

    Thank you Kary. Good point. I used marginal bracket more when buying and selling in stock and bond portfolios in my previous life, and we did not factor in the Standard Deduction when making those decisions. That is why the answer is 33% UNLESS your accountant tells you otherwise, as in if you don’t have at least $10,000 in deductions not related to your RE deductions for charitable giving, business expenses and whatnot.

    That’s why I was proposing a credit instead of a deduction, but at a lower amount. A lot of people probably make that same error when doing the math. With a credit it would be a lot easier.

  27. 27
    No Name Guy says:

    Something else to consider with the whole mortgage interest deduction:

    Even though I think it’s foolhardy to pay interest to write off a smidge from the taxes, understand that you won’t always be able to do so, especially later in the life of the loan. Early on, MOST of the P&I part of the payment is the “I”. Later on, the “I” part of the payment starts dropping dramatically. At that point, you’re still stuck with the full payment, but no tax write off “benefit”. Plan for that point.

    Excel and the PMT function are your friend for understanding this effect. Let’s say you want to figure it out for a 100k mortgage, 30 year, at 4.0%. In a cell in the upper left, punch in the following:
    The result will be -477.42 – your monthly principal and interest payment. Adjust values to your own circumstances. 30 year, 4% and 100k were nice round numbers.

    Now, to see the progression of principal versus interest do the following.
    Punch in 100,000 in a cell. To the right of that, do a formula multiplying the 100,000 times the decimal interest rate divided by 12 (in this example, 0.04 / 12). This is the interest you pay that month. Now, in the next cell to the right, put in the payment value (being -477.42). Now to the NEXT cell to the right, do a formula that = (cell with 100,000) + interest cell + payment cell. This right most cell shows the balance and the end of the first month’s payment.

    On the next row, in the cell directly under the 100,000, do a formula that goes up one row and over to the right to grab the end result of that first month (in this example, it’ll be 99,855.91). Then copy down the interest formula, copy down the payment and copy down the summing formula on the right. Now copy all the formulas for this second row down another 358 rows (for the 30 year * 12 month life of the loan, or for another 178 rows if you’re doing a 15 year, etc).

    In any 12 month period you can sum up the interest paid, the total of payments and by the difference, the principal paid.

    You’ll see how the interest paid drops off (a good thing – the less you pay the better). In the example above, the first year is 3967.95 5th year its 3662.93. 10th year it’s 3206 and change. 15th year its 2648.81. At the end of that 15th year, you’ll still owe almost 65k of the original 100k balance, yet that “benefit” of the write off will be a maximum of only 2/3 of what it was a first, and continue to diminish. As Kary points out, at some point, even with property taxes, the standard deduction will be higher and you’re on your own paying off that full payment (mostly principal) with out that “helpful” write off you may have been counting on.

    Again, Excel is a very powerful tool to help you understand finances. I highly recommend everyone learn it. Include all the various effects into your planning on if it makes sense for YOU, in your individual circumstances, to rent or own.

  28. 28
    David Losh says:

    RE: wreckingbull @ 11

    In one way it does, because you could see the spike.

    Today however you are seeing vividly that the decline, the crash, the return to “normal” was aborted by what people refer to as government interference. The tax credit was one.

    The real culprit is the low interest rates. As interest rates declined prices rose.

    Now Tableau charts are great, so push the tool at the bottom back to the beginning of the index, and you’ll see the roller coaster.

    That roller coaster isn’t normal. It shouldn’t be considered normal.

    I’m asking why the Index exists. Why do we have such a thing, and what does it have to do with an individual purchase.

    My answer is that it reenforces buying behavior. People pay more, then check the index to see how they are doing.

    So you didn’t buy at the peak? Which peak? The peak we have now or the peak we had in 2006?

    Then how does that compare to the peak we had in 1989, and 1990. Were prices really as high in 1989, 1990 as they were in 2006, or is it just a comparison of the composite?

  29. 29
    Still Anonymous says:

    Are these month-to-month increases annualized? Otherwise the Composite 20 is sitting at 2.33 x 12 = 28% appreciation. Looks like the housing market is BACK, baby, and you better buy before we run out of land!!!!!!!!!!!!!!!!

  30. 30

    RE: Still Anonymous @ 29 – Up 1.8% May to June, and 1.8% YOY June to June, and you ask if they’re annualized? ;-)

    I would point out these are the non-seasonally adjusted numbers.

  31. 31
    Erin says:

    Prices are “inching up”?!?!

    I read statements like this and feel that I am in the twilight zone. For the past 3 months, my partner and I have been trying to find a place to live with increasing desperation. I just relocated to Seattle for a new job, and am stuck in a furnished studio living out of a single suitcase. We initially were looking to rent, but we have a (senior, mild-mannered) dog that no landlord was willing to accept.

    I am seeing prices *equal* to 2006-2007, and price increases of **10% OR MORE** over the last year. Case in point: I recently lost a bid on a house in Seattle. The sellers purchased the house in May 2011 for X. They did almost nothing to it. I bid X plus 18% and lost. I still don’t know what the house sold for, but believe the winning bid was significantly higher.

    At this point, I almost regret taking this job and coming here at all. I make a nice salary, and still cannot find a decent place to live to save my sanity.

  32. 32
    Carl says:

    RE: Erin @ 31 – Clearly real estate is very very local, even down to the square mile. i just read today that in Silicon Valley there is a shortage of $1+ million homes for people to buy. Maybe crazy – but ultimately it comes down to supply and demand. The buyer might say “why are you asking this outrageous price when unemployment is at 8%+?”. The seller might say “why aren’t you willing to pay my outrageous asking price when employment is nearing 92%+?”. Guess it is all in how you look at things.

  33. 33
    pfft says:

    By Carl @ 5:

    I love climbing the wall of worry on real estate. The bearish comments on the SeattleTimes article is actually good. I would be real worried if we had bullish posters here. Nice and slow and safe upticks – exactly what the doctor ordered.


  34. 34
    Scotsman says:

    RE: No Name Guy @ 13

    Hey, we agree on something! By paying my home off I would get about an 8% return on the money invested given current rents and taxes, etc. I’m tempted to go for it, but still too uncertain about what the future holds and want to keep the options open.

    Interesting that it’s the property taxes- equal to 25% of the equivilent rent- that have the biggest impact. While we’re not at tax levels found in many older urban areas, this isn’t Idaho or eastern Wa where taxes are more often in the hundreds of dollars per year class on an average home. At what point will property owners complain, i.e. prop 13 in CA?

  35. 35
    Macro Investor says:

    RE: Erin @ 31

    I’ve been coming to a similar conclusion these past few years. I offer this as food for thought.

    Why pay $500k for a cheaply constructed average middle class house? It has nothing to do with being able to afford the payments. I don’t want to work hard my whole life, just to pay the banker and the tax man. I’d rather rent way below my means and sock away the savings for a better life, in a more affordable area.

    I come from back east. Houses there are brick constructed, well insulated, have a larger lot, and are built to last a long time. They look nice and hold their value with very little maintenance. Everything here just looks shoddy because it was slapped up from plywood. Yet prices here are 2-3x higher.

    Get online and check out housing in other areas. You might be surprised by how much opportunity you have by getting away from the trendy area.

  36. 36
    Macro Investor says:

    By Scotsman @ 34:

    RE: No Name Guy @ 13

    At what point will property owners complain, i.e. prop 13 in CA?

    Go get the signatures. We would all vote for it.

  37. 37
    wreckingbull says:

    RE: Macro Investor @ 35 – I agree with this. I don’t think it has to do with building materials, though. Brick is not a very good material for our earthquake-prone area. I think it has more to do with the historical demographics of the neighborhood at time the the home was built.

  38. 38
    m-s says:

    RE: Macro Investor @ 36
    That worked out so well for them, didn’t it?
    I guess when you see a pothole, with the money you saved in prop taxes, you can buy some sakrete and fix it yourself for us, or if you are not feeling altruistic, don’t, and use the money to get new shocks. What, there are potholes anyway? Well, a redirection of the taxes for the uses you feel are important would fix that, but no money will not, for sure.

  39. 39

    RE: m-s @ 38 – Now that people know real estate prices go up and down, that type of stupid scheme would never pass.

  40. 40
    ARDELL says:

    No one builds “full brick construction” anymore as a rule. East Coast is not building houses better or differently, in fact Toll Brothers (Huge East Coast Builder) just bought out Camwest and the homes are constructed the same.

    Brick foundations here are NOT good and brick on houses is merely a decorative facade in the last several decades whether they are on the East Coast or in the Seattle Area.

    Other than “balloon frame” construction on really old houses, (East or West Coast and a fire safety problem) the homes in the Seattle Area have been built just as well as any homes on the East Coast.

    I have been a real estate broker in PA, NJ, FL, CA and WA and the newer homes here are built almost identically to those in New Jersey. Split Entry and One Story homes are the same here as they are in PA and NJ.

    Maybe you are just homesick for the East Coast, because thinking homes here are not as good, is really just not true.

    This moderate sized basically zero lot line $475,000 home in Warrington, PA is not built better than any home in Sammamish being sold at comparable prices.

    If anything the construction is better here compared to that home.

  41. 41
    wreckingbull says:

    RE: ARDELL @ 40 – That may be true Ardell, but I can’t help but agree with Macro. When I walk through a neighborhood in some older midwest or east coast cities, I get a very different feel for quality (i.e. seems better) than I get when I walk through a Ballard, Wallingford or Magnolia. I often wonder if that is due to Seattle being a Boom/Bust town.

  42. 42
    Erin says:

    Thanks for your replies and advice, all. Macro Investor @ 35, I agree with your “renting below means” strategy, and would love to do so here in Seattle. Unfortunately, the rental market is downright hostile here if you have a dog on the city “restricted breed list” as we do. No apartment building will accept our dog. Individual landlords are just as unfriendly – though we did find one complete DUMP that was willing to take our dog with an additional “damage deposit” of $6,000. Pets aside, for a minute, I have responded to numerous craigslist ads within 20 minutes of the initial posting, attaching a resume and two glowing references from prior landlords, only to be told that there are already 5-6 people who responded. Inevitably, the space is taken by one of those people.

    For the record, I don’t care about being in “trendy” areas; I just want a place that hasn’t been trashed by a series of disrespectful prior tenants, within 45 minutes of my office on a bus line.

  43. 43
    wreckingbull says:

    RE: Erin @ 42 – Sometimes I wonder if Craigslist has become a little too popular. Perhaps try a few non-mainstream resources like the Little Nickel, community newspapers, community message boards and the like.

  44. 44
    ARDELL says:

    RE: wreckingbull @ 41

    Can you give me an example of an East Coast City you might be referring to? Of course I know Philadelphia best. Some of the difference for me is that due to it being an earthquake area there are a lot more squat bungalows than in most East Coast cities. But that I expect is by necessity.

    I grew up in a 3 story brick structure on top of my Dad’s records store, but I wouldn’t say the neighborhood was “better”. Just different.

  45. 45
    wreckingbull says:

    RE: ARDELL @ 44 I always use St. Paul, MN as an example. The working-class neighborhoods there seem FAR better constructed than our working class neighborhoods, if Seattle even has such a thing anymore.

    As far as new construction, I don’t dispute your statements.

  46. 46
    ARDELL says:

    RE: wreckingbull @ 45

    I have a friend who does a lot of photo blogging there, but I’ve never been to St. Paul, so that makes you correct. :) I have lived in historic neighborhoods on the East Coast like Newtown Borough and it reminds me a lot of Kirkland. A lot of the homes and architecture are better, but that is because they are much older.

    As example, 3 bedroom 1 bath 1950’s homes built for soldiers coming home from the war look the same most anywhere whether that be in Shoreline or Levittown NY or PA.

    Sometimes it’s about the year built more than the where.

  47. 47
    johnnybigspenda says:

    RE: No Name Guy @ 13 – There are many reasons why debt could be something someone wants to take on. It is a valid part of a balanced ‘portfolio’. First, the dollars you owe are costing you 3.75% right now (minus tax effect). Think you can exceed that in the stock market, or some other investment? I am betting I can, in which case, paying down the debt is not the best use of cash. Also, if you think there is any risk of inflation in the future, debt is a good hedge against that. (even a couple of years at 3-5% inflation would make your debt worth less). Have you maxed out your 401K? There are many alternative uses of cash that are better than paying down low interest debt. Most people that are buying today are paying less than or very close to rent after the tax effect. As long as that isn’t a stretch for them, its not a bad situation as there will come a point where they don’t have to pay ‘rent’ to the bank any more.

  48. 48
    David Losh says:

    RE: johnnybigspenda @ 47

    If the price of the property is going down, which it certainly will, it’s worth it to pay the property off. Even if we do get an inflationary trend, which seems extremely doubtful at this point, you would just be trading dollars, because there is nothing to say the price of already over inflated property prices will rise.

  49. 49
    2kt says:

    RE: David Losh @ 48

    Good morning, Losh. You just keep at it – another gobbledygook piece.

  50. 50

    RE: ARDELL @ 40
    I think that’s right. A lot of east coast cities are old, and building materials and quality were just better in old houses. They weren’t slapped together as quickly. The Seattle area has less old houses. A Toll Brothers house is New Jersey and a Camwest home in Redmond are pretty much the same.
    So you can tell me the houses are the same, but don’t you even begin to tell me that the pizza is the same. Then I’ll know the pod people have taken over your body.

  51. 51

    Do they build with Fir on the east coast?

  52. 52
    JWS says:

    RE: David Losh @ 48 – Regardless of what direction home prices are moving and regardless of what is happening with inflation, if you own a house NOW, have a low interest rate (3.75% for example), and plan to STAY in it, you are NOT better off paying down the mortgage. You should invest that money.

    And if you can’t do better than 3.75% annually investing your money, find a financial adviser.

    johnnybigspenda @ 47 is exactly right.

  53. 53

    RE: JWS @ 52
    But there is a sense of freedom in not having a mortgage to pay. It’s priceless, like those Mastercard advertisements. Also, in order to earn greater than 3.75% investing, there will be some measure of risk involved. And not having a mortgage to pay means you’re not a slave to the bank. I don’t have a mortgage, and have used some of the money I’ve saved to invest in other things, so it’s not exactly an either/or situation. I’m with David on this one. I’m not a member of the bank’s fan club, and not having to deal with them has been a pleasure.

  54. 54
    JWS says:

    RE: Ira Sacharoff @ 53 – It’s a fair point regarding the freedom and peace of mind of not having a mortgage. The advice of investing the money and not paying down the mortgage is purely from an economic perspective.

    Just know that over the long haul (30 years for example) it can make a HUGE difference. A young person who can achieve 6 or 7 or 8% return with that money instead of paying down the 3.75% mortgage will come away hundreds of thousands of dollars ahead (the amount will depend on the size of the mortgage).

  55. 55
    wreckingbull says:

    RE: Kary L. Krismer @ 51 – Surely not as much as we use here. I own a home which was built before WA statehood. While it is nice to see the beautiful, clear fir joists under my house, the build quality is just not there. Why? The people who built it had better things to do, such as feeding their family popping stumps and farming. A home built in the same time period on the east coast was likely built by a craftsman who dedicated his life to home building.

  56. 56
    whee says:

    The young person who can find annualized 8% returns for 30 years straight (which were a temporary artifact of demographics and history) will be so rich that they can buy in cash anything they please.

  57. 57
    David Losh says:

    RE: 2kt @ 49RE: JWS @ 52

    That money at 3.75%, as an example, is only used if it will get you a return. If the property goes down in price 2% per year, or greater, then you are paying interest on a loss of equity.

    We all make bets in our investments. My bet is that no one will be owning a house from cradle to grave, any more than there will be employment from cradle to grave.

    My bet is at 3.75% you are only leasing your “home” from a bank unless you pay it off.

    The vast majority of people I meet who are professionals, and have what we might call jobs, are contract workers who are on contracts of 9 months, 3 months off, and have work for about 3 to 5 years.

    How about you? What does long term employment look like from your perspective?

  58. 58
    David Losh says:

    RE: JWS @ 54

    I’m also curious about the 7% to 8% returns. When I ask for those kinds of returns most people kind of hem, and haw around that issue.

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.