New Advice Column: Dear South Seattle Realtor…

New Advice Column: Dear South Seattle Realtor…

“Dear South Seattle Realtor” is a new column hosted by a series of hyper-local realtors with deep experience and knowledge of the South Seattle community. Send your questions to gosouthseattle@gmail.com. This month’s answer is provided by Serena Heslop with Windermere Mount Baker.

Dear South Seattle Realtor,

What do you expect the market to look like in spring 2017? And where can one buy a house for less than $500,000?

Sincerely,
“South Seattle Renter”

Dear South Seattle Renter,

Your last question is an easy one. For something under $500,000, I encourage you to look in Upper Rainier Beach, Rainier Beach, Lakeridge and Brynmawr.

serenanohat21

Windermere Mount Baker Realtor Serena Heslop has been serving South Seattle for 20 years.

The first is a bit more complicated. If only I had a crystal ball and could look into the future! All I can do is look at future projections and also look at the hard facts of past appreciation.

The costs of waiting to buy is defined by the additional funds it would take to buy a home, if prices and interest rates were to increase over a period of time.

Freddie Mac predicts that interest rates may rise to 4.6% next year. And Core Logic predicts home prices will appreciate by 5.3% nationally. Seattle has tends to have higher appreciation rates, city wide it has been 11% this year.

If we take this projection let’s compare what you could get now versus a year down the road. Seattle is not cheap as we all know, so say you can buy a house for $425,000 putting 10% down with a current interest rate of 3.65% ( I am guestimating homeowners insurance and taxes).  Also, with less than 20% down, you would have to pay private mortgage insurance (a tall order for a lot of first time buyers).

So your monthly rate would be $2253.93′ PMI is $160.42.

If you waited a year and rates have increased to 4.6% as projected your mortgage would be $2,466.39, plus you would be buying less house if the price projection is correct so the house would be $403.750.

So waiting does not make a lot of sense if you can buy now.

Finally, if we look back to last year the median list price of pending sales in South Seattle was $416,238 and this year it is $485,462, so that is actually an over 15% price increase! So again it seems wise to look sooner rather than later, unless Donald Trump gets in and then I think a lot of folks will be leaving the country and Canada will have to build a wall to keep us out!

Sincerely,
Serena Heslop, Realtor

 

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