Reasonable time to buy in So. SnoCo?
I'm trying to decide if it is reasonable to look to buying in the south Snohomish County area (Mountlake Terrace, Lynnwood, South Everett). I am just sick to death of apartment renting (noise, etc) and am interested in a SFH, no condos or townhouses. I work at the Boeing Everett plant, but also travel to Boeing field (and occasionally Renton and Kent) for work, so south Snohomish seems a decent split between Everett and Seattle/King county. I've $90K for down payment, loan points and fees (low since I plan to go through the credit union), appraisal, inspection, etc.
I'm 48 and have at least 7 years until I can take early retirement (not that I have to bail at 55), no kids, no expensive hobbies, and don't mind reasonable maintenance/yard work. The alternative is to find a SFH to rent, however I think I'll find it easier to do my own yard work than to to do somebody else's.
I'm 48 and have at least 7 years until I can take early retirement (not that I have to bail at 55), no kids, no expensive hobbies, and don't mind reasonable maintenance/yard work. The alternative is to find a SFH to rent, however I think I'll find it easier to do my own yard work than to to do somebody else's.
Comments
I'm very close myself to doing some "shopping." All that to say, yes, it's reasonable to go looking. It's up to you whether or not the time is right to write a contract.
Also, I'd be wary of buying new construction right now. Make sure that most, if not all of the houses are already sold.
Great advice. I was just thinking last night how often I have seen 'Price $$$ below assessed value' as of late in ad's, as if the assessed value is somehow now a measurement of the homes market value.
One house in Monroe comes to mind. It's a short sale, sold for $350 in 2005, is now assessed in the $500s, and priced in the mid $4's. The kicker was that the assessed actually went UP from 08 to 09, like many other area houses, and in the process received a $400 a year tax increase to $5347 by Snoho!
Random thought that I had to get out...
What's the difference? Mowing grass is mowing grass, whether it's "your" lot or just one you're using for a year. This strikes me as no different than the throwing money away by renting myth.
If you rent a SFH, won't some landlords provide the mowing, while you sit in the living room drinking beer?
I'm sure some will, but many are renting in the red, and are therefore asking/requiring the renters to do it.
In terms of finding rentals, there are a lot of 0 lot line townhome (no shared walls) properties that were built the last 5 years... you could probably find something along those lines for a few years. I wouldn't buy one because most of them were built to the lowest possible standard, but they'd be good for a while.
However, I believe it's important to keep an eye on the numbers month by month as opposed to year over year.
Keep this in mind: Say the average home price was $400K for March 2008 and prices fell 20% to $320K for March 2009, but over the next few months prices rise at a rate of 3% per month. It would take 8 months for the prices to get back to $400K.
Therefore an increase in the YOY wouldn't show up in the numbers until November.
The question is, do you want to be buying while the average home prices are lower, or wait until the YOY numbers show a positive increase which means you are now buying in a more expensive market.
I am not forecasting a 3% monthly price increase. I am just using this scenario to show the importance of watching the numbers on a monthly basis.
Snohomish County averge home sale prices went up 3.75% in March over January. Prices may very well go down in April. I make no predictions, only follow the numbers.
I have created a 10 Year, monthly average home price graph for Snohomish County if your interested.
http://snohomishcountymarketstatistics.blogspot.com/
I am NOT saying you should wait for the bottom to buy (purchasing is a very personal decision, and you have to look at your own finances, desires, etc). I am merely saying that the climb up from the bottom will span MANY years, and the first 3 to 5 years (from the bottom) will see negligable appreciation.
What happens on a monthly basis isn't very useful for understanding market directions. There are a LOT of things that can cause spikes (one way or the other) on a monthly basis.
In summary: Buy now, or be priced out of the market Forever!
Yawn.
It just means that the shitty houses are clearing, and the nicer ones are now selling...for less.
Hardly a "more expensive market".
Uh...that's fine as a hypothetical situation, except it's entirely outside the realm of possibility. Check out any of Tim's graphs for the last 3 years and you'll notice that appreciation (positive or negative) has a lot of momentum. It simply doesn't snap from -20% to +36% rates in March. Under any normal situations (typical growth, recession, depression, stagflation, etc) that just doesn't happen. There's really only a few cases where your hypothetical is even reasonable to bring up.
One is a major disaster, like Hurricane Katrina, which kills very few people but destroys a lot of housing. The other is a situation of hyperinflation.
Trust me, you won't need any YOY or MOM stats to recognize those situations when you see them. Most likely, even people who are two years too late for the bottom will only miss out on trivial gains.
However if you look at my chart for the last 10 years (prior to 2004) for Snohomish Co. you can see the month over month slow creep up.
Even so, it must be watched over at least a 6 month period along with the YOY. I think they are both important to watch. So whether the market is going up or down, over a period of time (less than 12 months) you can still see a trend.
It's still spectulation, as no one can predict which way the trend will keep going especially with the uncertainty in the economy.
http://1.bp.blogspot.com/_qOT_WZGcHPo/S ... h+2009.PNG
were there ever 8 consecutive months of 3% appreciation? Seems like an infinitesimally small possibility of this occurring. Could it happen? Sure. The sun could explode tomorrow too. Can't rule it out.
The only uncertainty in the economy is "how bad will it get?". Seems to me that only fools and CNBC announcers (which may be redundant) expect that things may get better tomorrow.
Looking at jjl's chart there's only one instance of 8 consecutive months of appreciation period (let alone 3%), at the very end of 2005 into 2006.
If I am only 7 years away from retirement where my income is going to take a SIGNIFICANT hit, I am not sure if I want to buy at all.
One thing is for sure, if you are going to buy ANYTHING, I would make sure that I can afford the mortgage with my expected retirement income. I would also not get a mortgage any longer than 15 years MAX.
I don't know your income, but unless you are making $150k/year, $400K seems awfully high even with your down payment...
Or viewed differently, I think the primary uncertainty at this point is how bad won't it get. Let's face it, as a world we are SOL, but maybe (just maybe) if key players here, in UK, Europe, China, Japan, Brazil, India, and Russia can all pull the right strings things won't really get "that" bad.
I guess in my mind, the a scenario much worst than anything CNBC could imagine is already locked in.