Should You Buy or Rent in Downtown Seattle?
Many things have changed in 2020 including the Seattle rental and Seattle condo market. If your lease is coming to an end, you have probably surfed the internet trying to find your next home. Perhaps you have considered purchasing a condo but assumed it wasn’t an option. Conversely, how do you know if you should buy or rent in Downtown Seattle? The short answer is that it depends on you and your lifestyle. One thing is for sure, it can’t hurt to consider it as an option. We asked Kristine Losh, a Ewing & Clark Residential Broker, some of the most pressing questions when it comes to renting vs buying. Consequently, no matter your choice, you know you are well informed. But the first question to ask yourself is, does purchasing a Seattle condo make sense to you, or in other words, does it fit your lifestyle?
First A Question: Does purchasing a Seattle condo fit your lifestyle?
If you have been renting for a while you may be starting to consider purchasing a home or condo. Perhaps you want to stay close to work while not having to deal with fluctuating rent and re-signing a lease every year. Maybe you just want to call something your own. These are all good reasons to consider purchasing a condo. Perhaps you are considering moving in 12 months, your job isn’t stable, or you are not happy in your career, then it may be best to keep renting for a while. If you have concluded that property ownership may fit into your lifestyle then you probably have questions about what that entails. What expenses are there owning a Seattle condo? If buying, is it better to buy a home or a condo? Etc. Kristine is here to answer.
Understanding Condo Ownership: Q&A with Kristine Losh.
What expenses should I, a new condo owner, consider when buying a condo?
“Owning your own home doesn’t come without extra costs. One needs to consider the property taxes and interest rate on the loan. You should also consider that you can’t just call up the “Super” when something needs repair and those maintenance and repair costs come out of your own pocket. Although repair and maintenance are generally much less than a house. If you are buying into a condominium, you also need to consider monthly homeowners dues to cover maintenance and services of common interest amenities to the property. Finally, while I always recommend that renters get renter’s insurance, property insurance is not optional, especially if you have a loan, so that is a cost as well.
The benefit of owing is some of these expenses may be tax-deductible depending on your tax situation. You would have to talk to your tax advisor, but most, if not all, of the homeowners I deal with, can deduct their property taxes and mortgage interest. So you cannot just compare your overall rental costs to your homeownership cost to get a true picture.
In addition, if your mortgage has a fixed interest rate, then your monthly payments remain the same over the life of the loan. So while other costs may go up (property taxes, HOA dues, insurance) your main expense stays the same. If you have rented in Seattle the past 10 years, you know rent has not stayed the same.”
What are the short- and long-term benefits of purchasing over renting in Seattle?
“The benefits of purchasing a home really apply if you plan to stay there for at least 2 or more years. As an investment, real estate is rather conservative and the longer you hold onto the property generally the greater the equity you’ll realize. That said, I always tell my clients that if they sell and end up simply breaking even, they should keep in mind the difference of the rent they would be out of pocket for that time period vs. the likely smaller expenses of interest, HOA dues, insurance and taxes during that time. In general, anything above that is paying down your loan and creating higher equity in your home.”
What are the cons of purchasing a condo in Seattle?
“I don’t see any cons specifically related to purchasing a condo in Seattle, but there are things you should be mindful of. One thing to consider when purchasing a condo is that you are essentially going into business with all the other homeowners in the building. It’s important to thoroughly review the building’s Resale Certificate prior to purchasing. The Resale Certificate is a group of documents that will provide information about the financial health of the complex. For instance, it will show if the HOA is equipped to handle expected as well as unforeseen maintenance costs. Furthermore, the Resale Certificate will show meeting minutes from the association’s HOA meetings that should give an indication of how much dissension, if any, there is among the homeowners in priorities, along with a lot of other important things to consider.
Another possible con is timing can be an issue if you get in circumstances where you have to sell. Seattle condo prices tend to go up [see chart below], but there have been times when condo prices have dipped. This tends to be more of a danger if you only live in your condo for a couple of years, because over the long term prices have gone up.”
Why would someone purchase a condo over a home?
“There are lots of reasons one might choose a condo over a home. Condos typically have lower maintenance fees than single-family homes, and the larger expenses are shared with a larger group of homeowners (and, with a well-run association, covered by the monthly dues). Many condos offer more metropolitan and convenient locations that allow someone a different life experience and shorter commutes. Some condos even offer other amenities that add to the luxury of living or even save on further expenses, e.g. an in-house gym, pool, and even spa, as well as concierge services. For those that travel frequently for work or pleasure, a condo provides a simpler means to “lock & go” with less worry.”
Is it financially safer to buy or rent?
Once you have determined whether purchasing a condo fits with your lifestyle, you should consider the financial aspects of purchasing property over renting. Many people look at the “price-to-rent” ratio when considering whether to buy a home. This ratio is applicable to condos as well. We have provided a decision tree to help you along your decision-making process.
Should you buy the below condo?
Well, three similar apartments nearby are listed at an average of $2,442.66 per month or $29,312.00 per year. If we use the equation, 545,000 / 29,312 we get a price to rent ratio of 18.6 which falls between the “Some risk to purchase” categories. Ultimately, this condo is perfect for someone with the right lifestyle. Learn more about Belltown here. Reach out to Kristine Losh to learn more about this property and others.
2929 1st Ave Unit #507, Seattle, WA 98121
1 bed | 1 bath | 780sq | $545,000
Get More Info on Seattle Condo Market
For more information on the Seattle condo market feel free to contact us. To view some currently available condos in the Seattle area, click here. There are many Seattle real estate companies, but Ewing & Clark has been providing Seattle real estate service since 1900. We represent both buyers and sellers of condos throughout the Greater Seattle area. We are here to share our expertise with you.