Housing Hell

I recently got a note on my door saying that my apartment complex is raising my rent by almost $150 per month when my lease is up in mid-June. This is the second time in as many years - it looks like apartment rents are finally catching up to the recent Seattle housing boom. When I moved in 2 years ago the rent was already high, but now it's verging on the ridiculous. So I think I need to move, but where to?

Thanks to the Invisible Hand, similar apartments are going to cost about the same, so my options for reducing my rent payment are somewhat limited:

  • Move into a lower-quality apartment (smaller, no attached garage, more neighbors, bad neighborhood, etc.)
  • Move farther away from work (worse traffic/commute)
  • Find a roommate

Finding a roommate to split the rent with might be my best option, especially considering that one of my friends is looking for a new roommate in about the same timeframe.

My other main option is to buy a condo (a house is out of the picture unless I want to move 40 miles out of town). Of course the housing market in Seattle has gone ballistic over the last couple of years - some of my friends who purchased 2 or 3 years ago have seen their condos increase in value by almost 50% (!!). Now everything is priced ridiculously high.

Many other parts of the country are seeing housing prices actually fall now, but the Seattle market is bucking the trend and is still going up a bit, or at worst leveling off.

Example: Riverwalk at Redmond is a recent condo conversion (highly visible from 520) at W Lake Sammamish & Leary Way near Redmond Town Center. They've been selling almost as fast as they get on the market. Here's a representative unit:

15825 Leary Way NE #E1 - Redmond - $325,000 for a 758 square foot 1 bedroom/1 bathroom condo, which is a conversion from an apartment (not new construction), and doesn't have a garage. One thing it does have though is a really great location.

As a comparison, the nearby Cleveland condos are new and go for about $390,000 for a similar unit, or $500,000 for a 2 bedroom/2 bathroom condo.

Being from Colorado where housing prices are far, far lower, this just blows my mind that people are eagerly paying this much for tiny little condos. Where I'm from these prices would get you a huge McMansion. But, I guess this is the reality of living on the West coast - it's even worse in California. I'm glad I didn't end up living in Silicon Valley, which is the other main market for software engineers.

l guess the big question at this point is: what's the future hold for the Seattle housing market? Will the bubble pop like in a lot of the rest of the country? Or will it keep going up? Obviously nobody knows for certain, and anybody who knows more than we do is better off keeping it to themselves and making a killing on the side.

My feeling, given the recent Seattle immigration numbers and Microsoft expansion plans, is that recent trends will continue and that the market will continue to rise, though at a slower rate than it has been. At worst, things might level off for a while.

So I'm actually giving serious consideration to buying one of these overpriced things. Of course, $350,000 is a huge amount of money to bet and be wrong :).

Lots to think about..

Posted on April 18, 2007
Comments (2) Trackbacks (0)
  1. $150 is a ridiculous amount to raise rent by. What kind of lease are you on – 6 or 12 month? As a condition of renewing your lease, tell them you will only pay (say) $50 extra a month, or you’ll be forced to move out. If housing over there is anything like Colorado, they won’t be able to fill it for a number of months, which will lose them money.

    I wouldn’t move into lower quality housing, since you are already used to your current amenities, such as a garage. Imagine if your car got broken into and you ended up paying for repairs.

    Since you are probably planning on staying in Seattle for a while, I would suggest buying a condo and building some equity. I’m not sure whether or not to suggest living with a roommate, but it might be difficult to make the transition since you have been living alone for a long time.

  2. $325K for a 1 bedroom that is under 800 sq/ft? Yikes that’s tiny. I wonder how much a condo in downtown Bellevue is going for. I would love to move there. How about you buy my townhouse and I move to downtown Bellevue? 🙂

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