Westneat Clues In—Seattle Wildly Unaffordable
Ever since I started (so long ago, I know) this blog I've been wondering—what does it take to get "mainstream" reporters in Seattle to sit up and realize that housing has gotten out of control around here? Well it looks like I finally got my answer. For Seattle Times columnist Danny Westneat, it takes a big round number like $400,000 to finally get his attention.
Welcome to reality, Mr. Westneat. For once we are on the same page. First time buyers have been priced out for a while now. Of course the problem is, many of them don't realize that they're priced out, and happily take on "exotic," "creative," or as I like to call it, "suicidal" financing. How someone making $50,000 is able to convince themselves that a "starter house" is worth $300,000 I'll never understand.My first house, which I bought in Seattle back in 1995, seemed impossibly expensive at the time.
THOMAS JAMES HURST / THE SEATTLE TIMES
...
The price? $98,000.
This month, the median Seattle home price passed $400,000. It got me wondering: What does that number mean? What if I were 30 today, and just setting out to tap my roots into Seattle? Would I be able to?
Adjusted for inflation, $98,000 in 1995 is about $130,000 today. So I began a search for the $130,000 Seattle house — the same house I barely afforded eleven years ago.
I found it. There was only one. It's shown in the photograph above.
It's no charming bungalow, that's for sure. The city has barred anyone from entering the property.
What's left of the burned-out shell sits on a car-strewn lot in one of the Seattle area's most crime-ridden neighborhoods, near Roxbury in White Center.
It sold recently for $125,500, making it the cheapest house with a Seattle address in at least a year.
"We had six or seven offers," recalls Ken Knoke, the agent who sold it for Prudential Northwest Realty. "They were buying it for the dirt. You can't usually get dirt around here for that price."
He added that my search for anything resembling 1995 Seattle, even adjusted for inflation, was futile. No way I'd find even a mobile home parked on a postage-stamp patch for $130,000.
He was right. A dingy, single-wide manufactured home in Boulevard Park with no street frontage goes for $160,000. A double-wide near the charred house is $177,000.
There is a three-bedroom for $125,000 on the plateau east of Renton. But it comes with a warning: "Please stay out! This home is unsafe to enter. Call agent for help."
(Danny Westneat, Seattle Times, 04.16.2006)
2 comments:
OK, How can property increase at 15%/year while incomes go up, at most, 3%?
WTF?
If the median income on Bainbridge Isl. is $75K in 2004, with home prices at $525K, that would take 55% of your gross income to afford the house with 6% interest rates.
In 5 years, the median income will be $86K and the median home will be $1.056M, and 90% income will be consumed on the house payment with interest rates at 4%.
2 years later, $92K incomes will have to spend 100% of income to buy the $1.397M at 4% interest rates.
3 years later the $2.124M home will eat up 100% of the $100K income in an interest free environment.
WTF?
People have to eat, drive, botox, pay taxes, internet, and even pay mortgage interest, etc. Tell me how we can keep this up.
Nope. Historical ratios will reassert themselves at higher interest rates. Home prices will have to come down in order for this to occur. At 8.5% interest rates, and 25% ratios for housing/gross, that $525K house is now worth, $200K. That is without a reduction in income.
Foreclosures are starting in-city.
I've been checking the craigslist RE list for a few months now, just to notice trends.
The foreclosed listings started outside of the city back in the Fall. I was wondering when they'd start in -city.
They started this week. Ballard and Fremont. Nice looking places but the prices still have a ways to fall. Condos and single family homes.
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