Decent time to buy - 10+ year timeline.
I'm considering whether things have sufficiently declined such that, with low current fixed mortgage rates and a 10+ year horizon, I could reasonably expect to at least break even if I bought today.
I have a fairly secure job, and at least 10 years before I could take early retirement (about another 10 years for full retirement) and I'm considering buying this spring/summer. I know prices may continue to decline a bit, but would be in the house 10+ years, which seems long enough for modest post-bubble appreciation (say 3%) to allow me to at least break even if/when I did sell. I'm interested in the south Snohomish county area, which seems to have reasonable prospects considering its location with respect to Seattle, Everett, and the eastside, and isn't King county.
I'm trying to balance the financial risks of buying in the near-term with quality of life benefits of not living in an apartment. I've considered renting a house but the decent ones (decent, not fancy) look to have rents close to the PITI of buying.
Thoughts?
I have a fairly secure job, and at least 10 years before I could take early retirement (about another 10 years for full retirement) and I'm considering buying this spring/summer. I know prices may continue to decline a bit, but would be in the house 10+ years, which seems long enough for modest post-bubble appreciation (say 3%) to allow me to at least break even if/when I did sell. I'm interested in the south Snohomish county area, which seems to have reasonable prospects considering its location with respect to Seattle, Everett, and the eastside, and isn't King county.
I'm trying to balance the financial risks of buying in the near-term with quality of life benefits of not living in an apartment. I've considered renting a house but the decent ones (decent, not fancy) look to have rents close to the PITI of buying.
Thoughts?
Comments
With the current builder/bank incentives of 3.87% and 4.2% on some projects I see consistantly selling, on a 30 yr fixed if you negotiate well enough the 164St interchange and Bothell Evt. Highway offers some interesting deals, get an agent who knows the banks/builders and shop until you get exactly what you want. An agent who represented a friend of mine got him a sweet 2300 Sq Ft brand new in Bothell for $299k with incentives and hoopla his payment is at $1300 a month with HOA/Taxes/Insurance. Took two months to get the builder/bank to come down but he is happy. Nice backyard big enough for sauna, shop etc.
I think that if you bought a home now at the right price in a good location, chances are very good that it would be worth more ten years from now.
And if your monthly mortgage payments could be comparable to rent, that makes it more appealing.
But you'd want to make sure the house is in decent shape and doesn't(and won't) need upcoming repairs, and you'll want to stop paying attention to home values continuing to decline. If you're in it for the long haul, you'll probably be just fine, but obsessively watching the value of your decline month after month may be hazardous to your health.
I don't really know enough to speculate on the direction of interest rates, but they are low right now. Because of that, and because some homes have decreased in price a whole lot, it might be a decent time to buy, and might be even more decent 6 months - 1 year from now.
Ugh. 401k flashbacks.
Job Centers will be driving the economy rather than regional growth. The idea that the Pacific Northwest will be drawing people in the next ten years is remote.
The spike in population in this area started with the merger of McDonald Douglas with Boeing. Microsoft, Amazon, and bio tech continued the draw. The question is if in ten years we will still be drawing population.
If you think so then find the location closest to where you think the job centers will be.
I personally would want to be closer in to Seattle, or Bellevue.
I agree that proximity to job centers, and also 'cultural centers' is important. A casual observation of I-5 and I-405 most any work day shows many folks living in south SnoCo and working in the job centers of Seattle, the Eastside, and Everett. Weekend traffic shows many folks going to those same places for cultural stuff.
I, along with many others, work for Boeing. I"ve a desk at the Everett plant, but also have the 'opportunity' to travel to Boeing Field, and sometimes Renton and Kent, or work. The south SnoCo area is close to job/cultural areas, and we have a (somewhat) lower tax burden then those living in the People's Republic of Seattle/King County.
Snohomish County also has a tax burden that in my opinion has been off set for twenty years by construction. The theory was population growth in the Puget Sound Region would drive the demand for the new construction, cheap housing. I've never bought into that.
Now you have a lot of housing for a shrinking population. I see property values dropping faster in Snohomish than King County. Honestly I would rather be closer to Sea Tac than Everett. In my opinion Sea Tac has more potential for job growth.
I believe there is a strong possibility that not only will Seattle area real-estate prices continue to decline significantly over the next 5 years or more, but that they won't regain much of the lost value for a decade or more.
As I've said before, I believe we are entering a lengthy period of deflation similar to what Japan has been experiencing since 1989. I expect that almost any Seattle area home bought today will be worth considerably less 10 years from now. There might be a few exceptions, but they would be rare (e.g. some new infra-structure development might raise the desirability of one neighbourhood, or such like).
I am sticking with my prediction for average Seattle area prices to drop at least 80% from the 2007 peak before we hit bottom.
If you want to get the details on the case for deflation, check out my in-depth podcast.
http://surkanstance.blogspot.com/2009/01/deflation-101-podcast.html