Seattle Residential: I Do That: The Seattle Buyer Mentality/Ability

The Seattle Buyer Mentality/Ability

The Seattle Buyer Mentality/Ability

I've been thinking about the mentality of the current Seattle buyer and the buyer from 2007. I tend to agree with everyone when it is said that a buyer wants a good deal. Of course they do, but then I look at the figures I wonder if they know one when they see one.

Date
Median $
Interest Rate
Down payment
Principle and Interest/mo
Total over 30 yrs
July 2007
$465,000
6.5%
20% ($93,000)
$2,351
$846,360
Jan 2011
$352,000
4.25
20% ($70,400)
$1,385
$498,600


Granted, there may be differences between the actual home that represented the median price in 2007 verses the median priced home sold today, but I think they would have more similarities than differences. I've read articles that claim wages here have not kept up with the cost of living here, but has anyone with a secure job taken a pay cut of over 25%. And I know from personal experience that rents have not gone down significantly in the past 4 years to accommodate lost wages.

Recently, there was an article in the Seattle Times which I wrote about and it claimed builders are going gaga about developing apartments because the current 20-35 year olds are not interested in buying homes. They don't see the up-side, so they will opt to rent. I look at the chart above and see an upside of $350,000 with the added benefit of a home interest tax deduction. Add in to that the fact that rents will go up while the above 30 year fixed rate will not. What are they thinking?

I can't imagine that they feel they don't have the ability to buy now. These are the same people that were buying 4 years ago, screaming to buy, had to buy, had to get in the market. Yes, I know. The big factor was that they could get the 80% loan coupled with a 20% second and get into the house for no-money-down. Your friends did that and now they're suffering the consequences. You don't want to go there? Where then, my young friend, do you want to go? Where do you want to be when you are 60?

3 Homes that sold in 2007 for the median price of $465,00

sold 2007 $465,000  sold 2007 for $465,000  sold 2007 for $465,000

 

3 Homes in Dec 2010 that sold for the median price of $352,000

sold 2010 for $352,000  sold 2010 for $352,000  sold 2010 for $352,000

 

 

 

 

Glenn Roberts
Retired

 

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Comment balloon 9 commentsGlenn Roberts • January 14 2011 11:24AM

Comments

Looking at those statistics really make you think.  I wonder what the stats are in my area for that time.  Interesting comparison.  Thanks.

Posted by Kimberly A Norgard (Devlin McNiff Halstead Real Estate) over 7 years ago

Glenn, you can lead a horse to water but you can't make them drink...

Posted by Gerry Michaels, GettysburgGerry Social Meida (Glasswork Media Arts) over 7 years ago

Glenn ~  This really speaks volumes and is couched in plain old English -- what's not to understand!  Seems to me it would make an excellent mailing to higher-end apartments!  Hmmm,  recon' I'll put one together for my market and git 'er in the mail; thanks.  Leaning, leaning, leaning . . .

Posted by Tish Lloyd, Broker - Wilmington NC and Surrounding Beaches (BlueCoast Realty Corporation) over 7 years ago

Glenn - good point on the numbers there - very cool to lay them out like that:)

Posted by Courtney Cooper, 206-850-8841 (Team Leader/ Investor for Brand New Keller Williams North Seattle Office) over 7 years ago

Kim - I was surprised when I saw the disparity

Gerry - And that ain't hay.

Tish - some how the communication will be effective.

Courtney - It came to me in my sleep. Up again at 5AM.

David - some buildings are advertised as being built like condos...but they have the same standards here as apartments. The age group will buy when they marry and/or have children.

Posted by Glenn Roberts (Retired) over 7 years ago

What a simple explanation and call to action - BUY NOW if you have any common sense (and ability to get a mortgage).

Posted by Georgie Hunter R(S) 58089, Maui Real Estate sales and lifestyle info (Hawai'i Life Real Estate Brokers) over 7 years ago

Georgina - I wonder why they aren't out in droves. Abitlity?

Posted by Glenn Roberts (Retired) over 7 years ago

Glenn - nicely shown and explained. People in my neck of the woods seem to be feeling more secure in their jobs now than in the past couple of tumultuous years; buyers are readyd to step back into the market, at least that's what I seeing.

Posted by Lottie Kendall, Serving San Francisco and the Silicon Valley (Pacific Union International) over 7 years ago

Lottie, I'm bullish on 2011. There is pent up desire (not necessarily demand) on the part of many qualified home buyers and sellers ready to move.

Posted by Glenn Roberts (Retired) over 7 years ago

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