Is the "pocket" theory of Seattle just a myth?
Hi all...I have followed the blog and forums for a while, and made my real estate choices based on things as best I knew.
The great thing is, most of my choices came out perfect, and I have prepared myself for the worst...but I would love some opinions on my choices.
I had owned a home in Ballard, and decided to cash out to pay off my loans, have a chunk of cash. I was going to go cash and wait, and rent. My wife had other opinions.
So we bought a home on Queen Anne where both her and I work. We cut all transportation costs, as well as having a MIL that supplies 12k/year.
My thinking was, I don't want things to go down, but if they do I have a bit of a buffer.
I came very close to selling my home a few months ago, just to get out of the way of the bubble, but continually heard that Queen Anne(downtown Seattle area) is a pocket that won't be hit by a bubble...or not as much etc...
I would love to hear opinions on this pocket theory. I don't love living in fear, and I need to live somewhere. Costs for renting are not far off for what I have, and I doon't get the deduction of mortgage interest.
Anyways, please share.
The great thing is, most of my choices came out perfect, and I have prepared myself for the worst...but I would love some opinions on my choices.
I had owned a home in Ballard, and decided to cash out to pay off my loans, have a chunk of cash. I was going to go cash and wait, and rent. My wife had other opinions.
So we bought a home on Queen Anne where both her and I work. We cut all transportation costs, as well as having a MIL that supplies 12k/year.
My thinking was, I don't want things to go down, but if they do I have a bit of a buffer.
I came very close to selling my home a few months ago, just to get out of the way of the bubble, but continually heard that Queen Anne(downtown Seattle area) is a pocket that won't be hit by a bubble...or not as much etc...
I would love to hear opinions on this pocket theory. I don't love living in fear, and I need to live somewhere. Costs for renting are not far off for what I have, and I doon't get the deduction of mortgage interest.
Anyways, please share.
Comments
I don't want to get into a huge "limited space" "seattle is special" sort of thing...but there is something to be said for being so close to downdown, and locked in by water.
L.A. is a sprawling wasteland.
I hope those swings dont come hitting us too hard, but you never know. I was prepared for a 100k downturn, but also have the rental income.
Thanks for story.
The people that should really consider switching to renting are those whose financial livelihood critically depend on rapid house appreciation in order to refinance or sell. Also, people that were planning on moving anyways might want to consider renting for bit to see where the market goes.
For example Medina, some kind of plaque would have to break out in Seattle for the price to drop there. There's always people with money that want to move into that neighborhood, and supply is always lower than demand in highly sought after neighborhood. Unless of course they decided to demolish SFR and build condos, then that's another story.
And to reiterate, it sounds like you're dong fine with your decision to stay put, Moosejaw.
A house is a place to live, after all, and not an investment strategy. I'd also stop worrying about the possibility of losing some equity to bubble deflation, unless my family's income was dependent on the real estate market, or I didn't have enough liquid savings to weather 6-12 months of unemployment.
After reading all the doomsday predictions, I became pretty skeptical of this site...but like many still have concerns about the current state of housing prices and lending.
I have to be disciplined in the choices I made or I would/could be in similar situations as alot of others. The great thing is I was prepared for my choices, but still wouldn't like to see a huge decline i housing prices...but would love to see a steady 3-6% increase in values in Seattle proper over the next 5-10 years.
We will see.
I think all the comments shared with me are very rational, and wish there were more similar voices of reason in other posts.
Anyways, thanks again.
-G
I think the voices are all there, it's just the question that differs. Do I think pockets exist? HA! Do I think the 'sticker value' of your house will decline? Yes of course.
But that wasn't your question. Your question was should you sell. It's pretty clear from your post that you should not. You like where you live, it provides a quality lifestyle and you can afford that lifestyle. Why would you even consider selling?!?!?
Now, if you said you had a 2 hour daily commute, and were putting 50% of your income into mortgage payments you would have gotten a radically different response. And guess what, a lot of people do fall into that second category.
On the other hand, you might consider selling your rental property if it is not cash-flow positive. If it is just barely positive, you might do a little more research. It sounds like your fairly exposed to real-estate overall and getting out of that might reduce your risk. But if you are making money from rent payments, then keep doing that of course.
While we're writing letters to Santa, I personally would love to see 18-25% increase in share prices of the stocks and bonds I'm holding, too.
Don't worry. Bernake Claus will be happy to keep lowering rates ensuring that stocks continue to climb at least 15-25% a year along with inflation.