Whether it’s best to rent or buy depends on your personal goals first and foremost, but environmental factors play a part too. We turned to area experts Nancy Glover and Carese Busby of Caliber Home Loans for the inside scoop on the Seattle market. Here’s what we learned:
1. Downtown Seattle’s housing market is hot, hot hot!
Carese notes that many of the patterns that contributed to rising property values in San Francisco can be observed today in Seattle. As in San Francisco, a thriving job market starring tech companies has been driving demand for real estate. Both cities also offer a great quality of life and diverse opportunities, which is attractive to workers considering putting down roots.
According to Carese, “Trying to get a place in downtown Seattle if your budget is under $700,000 is like threading a needle, it’s not uncommon for a property to get ten or more offers as soon as it hits the market because demand is so high.”
The numbers agree, with the median price point for a condo in downtown Seattle reaching a new benchmark of $668,000 this past January. This makes the pre-sales at the NEXUS building, for instance, very exciting because the opening price point is in the $300s and the amenities are so attractive.
Nancy points out that buyers can find more options at more affordable prices if they look outside the heart of downtown, but those set on city living are often hesitant to compromise on location.
2. Appreciation is high
In 2016, the Seattle metro area won the honor of having the nation’s fastest-growing home prices, an accolade with implications for renters and buyers alike.
For buyers, high appreciation rates position property ownership as a potentially lucrative investment option. In the case of the Denny Triangle’s 698 Insignia Condominiums, where construction began in 2013, resales are already averaging 18-percent increases over pre-sale prices.
For renters, prices are steadily rising. Some are having trouble keeping pace, while others worry that landlords looking to cash in on rising home values will ask them to move out. Nancy notes that stability is one of the major benefits of buying, that “If you get a fixed rate mortgage, you can control what your expenses will be for the long term.” You also know you won’t be displaced suddenly, which is a comfortable thought.
In some situations, buying can even leave more money in your pocket. Many buyers can write 100% of mortgage interest payments off their total taxable income, which can lead to sweet refunds. You have to consult your CPA to determine your eligibility, but if you are eligible then buying could help you come out ahead.
3. You might qualify for a mortgage and not even know it
Carese says that many people don’t realize the diversity of available loan programs. Some loans require as little as 3.5% down, and the source of down payment money also allows for variety. “Your down payment can come from a number of places – it can be a gift, and you can even borrow from your 401K or an IRA in some cases.”
Furthermore, just because something in your application disqualifies you for one loan doesn’t mean you’re not eligible for any loan at all.
“Caliber Home Loans is a direct lender, which means we’re not going through a single third party with a strict set of rules to secure funding for loans,” Nancy explains. “We underwrite the loans ourselves so we can offer a wide range of opportunities to people in different situations.”
4. If you’re going to buy soon, the time to meet with a loan consultant is NOW
A mortgage loan consultant can help you examine your assets, goals and options, and they can also help you position yourself advantageously before you seek pre-approval. Best of all, they’ll help you run the numbers to determine what your monthly payment could be in a variety of situations.
Their recommendations can help you improve your credit score to secure a more favorable interest rate and guide you through other steps that will help you prepare for a purchase.
If you have questions about your options or general trends in the Seattle real estate market, the experts at Caliber Home Loans can help. To learn more, visit caliberhomeloans.com or reach out to Carese (firstname.lastname@example.org; NMLS ID # 619429) or Nancy (Nancy.Glover@caliberhomeloans.com; NMLS ID # #107826).