...and people wonder why Snohomish County is one of the fastest growing in the state:
A worker would have to earn $57 an hour -- about $119,000 a year -- to afford that Seattle home, according to the Seattle chapter of the Urban Land Institute.And on the Eastside, a worker needs to earn nearly $152,000 a year to afford a house with the $643,750 median price there in August.
Land of the working man (and woman!) that is not.
Posted by Eric Earling at September 11, 2007 07:22 AM | Email This$400,000s signs are morphing into $300,000s signs and some into "high 200s".
It's still egregious compared to the beautiful homes that $150,000 can buy you in many parts of the country today -- but we in Southeastern King seem to be floating down to Earth.
The idea that you should only spend 30% of your income on real estate is silly when the other 70% is to be spent on non-investment spending. If a person can function making 40k a year then they can function making 70k a year and only living on 40k a year.
Posted by: Giffy on September 11, 2007 07:53 AM70k take home corresponds to about 90-100k salary without home deductions.
Posted by: swatter on September 11, 2007 07:59 AMNow you have 70k-11k(after interest deduction)=59k. Not to bad an income with a 2k housing payment and a lot of equity. Once could probably do a 15 year mortgage in that circumstance.
Not even mentioning that one could by a cheap condo, or be skillful in using Roth IRA's and other tax avoidance means to keep that prehouse burden down.
Perhapses its not ideal, but I would rather live in an area with a median family income of over 60k and have to save, then live in say Spokane were housing may be cheaper, but family income is only 40k a year.
Posted by: Giffy on September 11, 2007 08:45 AMIn Downtown Tacoma, you can now buy a 750 sq. ft. "Artists Loft" with a view of the Methadone Treatment Facility... next to a Department of Corrections Half-Way House for level 3 Sex Offenders...across the street from a 100 unit HUD Housing "Low Income Project"... 7 different Bails Bondsmen to choose from...an DOC Alcohol Assessment Center...Crack Ho's on the corner...Rescue Mission within walking distant...in the heart of the S.O.A.P. & S.O.A.D. districts...far away from the unsafe" Hill Top" neighborhood... for $350K...a liberals dream home...and friends wonder why I left???
If you think I' am kidding, check out 6th. and Tacoma Ave. area!!!
With houses appreciating at a clip of 9-10% per year, it would take only 7 or 8 years to double in value.
With wages increasing more slowly than real estate, one plays a losing game with respect to the market when trying to "catch up" to the market and be able to buy. So, that 30k per year becomes on 25% down on that 1 million dollar bungalow. Saving another 8 years gets you 500k down on a 2 million dollar house.
See how this works? people who want a real chance at real estate start out buying where the prices are low, and build up equity and THEN maybe they can afford to move back into the city when they can "trade up" from a 4 bedroom, 2000 sq ft home with a big yard for a 2 bedroom 950 sq ft closet with just enough yard to plant 3 rose bushes and a row of tulips.
This is only one reason why families move out of the city and then drive back in to work. To own property means to go where it is affordable. That's what I had to do 15 years ago. My apartment was going condo and I had to move because I could not qualify for the financing to buy it, not the payments it would entail. I ended up buying my first home in Shorline when it was still reasonable, a 1000 sq ft with a decent yard that cost about 60% of what the condo went for. A few years later I upgraded to a house twice the size with acreage a few years later with the equity I had built. I still can't afford Seattle, and I wouldn't want to trade in my 2.5 acres anyway.
Posted by: eyago on September 11, 2007 09:00 AMCheck out this beauty for $200,000
http://yahoo.idx.prunorthwest.com/details.aspx?firstrecord=1&VIP=Yahoo!+IDX&cc=realestate&fclose=n&newhome=n&za=and&searchgeo=Algona%2c+WA&searchtype=2&propertytype=1%2c2&sort=5&sortacdc=desc&searchmaxprice=200000
I just took my bike down there from Kent on Saturday riding the Interurban trail all the way there. It's one of the best bikeways in the county.
Posted by: John Bailo on September 11, 2007 09:09 AM70k is also not that hard of an income in Seattle. A starting job that pays 35k is pretty common and if two people each make it your at 70k and thats just to start.
I agree though the best option is to buy where you can. I started with condos and now have a nice house not far from Downtown and can walk to both work and school. The great thing about real estate is that it is one of the few leveraged investments available to the average person. Put 40k down on a 200k condo and reap gain off of a 200k asset.
The trick is to be financially savvy and fiscally frugal. Delaying children and other money sinks :) helps too.
Posted by: Giffy on September 11, 2007 09:16 AMThe big-government types (in BOTH big parties) WANT housing to be unafordable. Renters are less empowered, and more easy to control. The Ownership Society is their foe, with it's self-reliance and independance.
They achieve this through zoning and growth management, building codes, regulations, affordable housing laws and through under-spending on roads. They hate the automobile because it gives us freedom and autonomy.
They want dependance and collectivism so they can control us. The wish the people had one neck, so they could yoke it.
But home ownership is almost at 70% in this country. The American dream lives, partially because people tend to persue their own self-interest.
Posted by: Bruce Guthrie on September 11, 2007 09:23 AMPresumably the latter can only continue until the market collapses for alck of buyers. In the meantime, the effect will be to class segregate our society.
To make that much worse, the old idea of cheap suburban housing is also disappearing because of the costs of commuting.
Assuming we alos stop the importation of illegals, we are headed for something like South Africa where the city will need to run dorms for the teachers, nannies, burger flippers, janitors, cops, professors, beauticians, and others of the servitor classes.
Now when this happened in South Africa there was convenient labeling system for the classes, race. If we do not have this, we may need some other way to denote servitors from the served. I suppose we could have residence badges?
Another issue is who will be allowed to live in the dorms? Is it the responsibility of the City to support domiciles for families? Will servitor children be allowed to go to the same schools as children of the served?
Posted by: SeattleJew on September 11, 2007 09:24 AMGiffy, it has been a long time since I did the normal IRS stuff, but when I pay taxes (as a sole proprietor) I have to deduct 15% off the top for Social Security benefits- with employees, I pay about 8% of theirs. So, when I gave my figure, I added the 7-8% the employee or wage earner has to pay. Did you include that in rebuttal of my comment?
And Giffy, congrats on being savvy and buying when you are/were young. I remember buying my first house as a single 25 year old in a residential community. After a few years, the neighbors told me when I moved in they thought the neighborhood would go to pot, so they were pleased it didn't. 25 years old and single was a normal purchase or accepted by in the early 70s.
Posted by: swatter on September 11, 2007 09:52 AMMaybe in 9 months when I get the next notice from the assesor, I might be lucky to see a less than 10% increase. The last three years, the annual increase has been over 15%, two of the years being over 17%.
Posted by: SouthernRoots on September 11, 2007 10:33 AMExpenses:
Rent about $900
Food for four about $800
Daycare and after school care about $400
Car payments, two cars, they each need to get to work, drop off kids, pick up, etc., about $500
Insurance on both cars, about $300
Gas for the month, about $300
Oops, we're already around $3,200 in just basic expenses, and we have't even started on utilities, phone, cable, school supplies, clothes, etc.
Gosh, it sure is easy to save up, isn't it?
Posted by: katomar on September 11, 2007 11:01 AMI also think your a bit off on the monthly income, assuming 40 hours a week, 50 weeks a year you get a combined income of 40k, or 3333 a month. At that income level with 2 kids, income tax is not going to be an issue, leaving the 10-12% payroll taxes which get them down to around 3000 a month.
swatter, thanks and I did take that into account. The numbers I gave are the average rates for the third and fourth quintiles of income nationwide for all federal taxes.
Cato, I think you have a point on the risk of condos. The thing in Seattle is that height restrictions and some other factors created pent up demand, especially at the top end of the market. My hunch is that the shear lack of space is going to keep prices reasonable, except that high end condos may experience stagnation or even a bit of a drop.
Posted by: Giffy on September 11, 2007 12:19 PMSeattle can't hold up.
Posted by: john bailo on September 11, 2007 12:22 PMHell I'm the liberal here and I'm the one arguing for personal responsibility.
Posted by: Giffy on September 11, 2007 12:28 PMThe thing is I wouldn't want to live in Indianapolis. The weather alone is a huge turnoff for me personally (not to mention the poor air quality). I prefer this much more scenic area of the states. Plus I can pop over to visit another country in a mere 3 hour drive. Can't really do that in Indy.
Not trying to judge anybody here, but why would a couple making $10/hour each be having kids? Condoms are much cheaper.
Posted by: Reggie on September 11, 2007 12:50 PMI would rather provide the education, infrastructure, and environment necessary to bring good jobs to the City and train people for them. We did it with aviation, and software, and are starting to do the same with biotech.
Posted by: Giffy on September 11, 2007 12:52 PMInteresting comments, if a bit over the top.
Some counterpoint:
"Income classes" are not individuals, and pointing to a divergence of same can be very misleading, unless individual progress is taken into account.
For example, each year, the class comprised of new college graduates has a median income of perhaps $25-30K, roughly half the overall median income posited by Giffy @20. But, 15-20 years later, the median income of the class will have risen to match the overall median income.
Also, isn't divergence a good thing? Having low wages for entry-level jobs makes it worthwhile for employers to hire unskilled workers and train them. And having high-wage jobs makes it possible to progress as experience increases.
Posted by: ewaggin on September 11, 2007 12:56 PMIn the past, cities had a rule that employees had to live in the city. I assume that has changed.
Posted by: swatter on September 11, 2007 01:00 PMEric,
Where in the heck in Eastern Washington (Eastside) is the median price of a home $643,750 ?????
It looks like you didn't pass the WASL...You must retake Washington Geography 101 again.
In fact, the correction has already begun. You're not going to read about it in the papers, but 11 out of the 30 regions throughout King County that are tracked by the NWMLS actually had median prices last month that were lower than a year ago. See for yourself. Go here, then click "August 2007 King County Breakouts."
For a more realistic take on the local housing market than you'll find in the Times and P-I, check out Seattle Bubble. Here's my post on these latest figures: Supply Soars, Demand Drops Like a Rock
We move here, I get a full-time job, and we're making double what we made in Illinois. We're in our 20s, have already owned a home, and therefore don't qualify for any first-time homeowner benefits :( And there's no way we'll be able to buy a house within a decent drive of our jobs (he's downtown, I'm in Bellevue) for at least... 3-5 years. And we're not big spenders. He'll be well over 30 before we can buy our first house here. And let me tell you- as someone who bought a house, and then had to sell it, and am now priced out of the market? I'm *so* ready for these weirdly inflated prices to come down. Yay bubble burst- bring it on!!
If it doesn't burst soon... we'll move back to the Midwest (or somewhere else cheaper than here) and buy a much nicer home with all the money we've saved trying to get enough for a down payment here. We're fortunately both in fairly marketable fields, and could easily do that. We love Seattle tons, but if we can't buy a house before *I'm* 30? We're outta here.
Posted by: JadeEJF on September 11, 2007 01:34 PMReal life and fun comes from having the artists, the students, the young couples that create, and make town life.
Seattle has hardened its arteries and now is a retirement home for people who will add ever more wings to the art museum....rather than making art.
Kent still has life.
If nobody can afford these homes, then who is buying them all?
Posted by: John Galt on September 11, 2007 01:41 PMYou said: ...for a conservative the free market is not something you really understand all that well.
People want to live in Seattle, we don't have that many houses, ergo prices are high.
I didn't bother to go back and research, but on transportation posts, did you argue that people should live where their jobs are so that we don't have the traffic problem?
This housing issue does point out WHY many young families move out of the city and HAVE to commute to the job if they want to get in on that leveraged equity gravy train that is part of home ownership.
The question is, is it a true free market or are other forces in play that FORCE prices higher than they would otherwise be? The high cost of city dwellings coupled with the purposeful choking off of transportation choices and you have the lower middle class caught in a vice of either choosing to sacrifice housing choices or trading away time and money on commuting. These are not very middle-class friendly circumstances.
The high priced homes and condos in Seattle are nice for metro singles and childless couples who like that environment and have nothing better to spend their money on.
When we tried to buy our first house, we worked from the center out until we could find a home that we could afford that also was big enough and decent enough that we were willing to own. That turned out to be Shoreline and 15 or so years ago. It would be even worse today. At our current income we could not buy that home today if it were our first.
Housing costs and transportation are rather strongly linked I should think.
Posted by: Eyago on September 11, 2007 01:53 PMI don't follow your response, though.
Posted by: swatter on September 11, 2007 02:29 PMNot quite sure what this has to do with anything, especially in regards to Ron Sims being a black man.
Gentrification is happening in my neighborhood. Were surrounded on three of the four sides by houses that re bigger and more expensive. People who have lived there for 20, 30, 40 years are dying, retiring, moving on, cashing in. This is leading to gentrification because the people who can't afford the houses in the surrounding neighborhoods or don't feel like moving into the 'bad' neighborhood are snatching up the houses in our neighborhood.
The nice old lady who's lived in the same run down house since the 1940's is even thinking about moving on. Her land is more valuable than the house she lives in. I suspect it's going to be torn down and gentrified because people don't build affordable single family houses in the Seattle anymore, the land is worth too much money. Why build a single family house when you can cram four townhouses into the same space for the less money. Thats anywhere from four to sixteen people who will occupy the land thats currently occupied one little old lady.
It has nothing to do with Sim's being black and has everything to do with perceived land value and the desire to make a profit.
Cato, I was one of those people who bought in the 'bad' neighborhood. These sorts of changes are part of city life. My neighborhood began in the late 18, early 1900's as an Italian neighborhood, it then became one of the more expensive neighborhoods in Seattle, later it became the black neighborhood which it still is to an extent. The nice thing is that most of the poor minority families that moved here when it was cheap bought their own homes. They now have a nice sum of equity to either sit on, or cash out and move someplace cheaper.
The thing that I find cool is that my house was here through almost all of that being build in 1908. Its kind of great to live in a house thats 4 times older then you, in a neighborhood with lots of history.
Posted by: Giffy on September 11, 2007 04:09 PMIf wasn't for the TRUE Eastern Washington Dino Rossi would not have been elected Governor TWICE...It was your eastside the elected the current governor the third time.
I love them old houses. They have such character that you don't get in the new ones.
Posted by: swatter on September 11, 2007 04:27 PMDon't forget the lead paint and asbestos insulation, too!
Posted by: Raoul Ortega on September 11, 2007 05:18 PMLet's see, built in 1908, that would make it almost 100 years old. If the house is "4 times older than you", that would make you 20. Or did you mean "4 times as old", which would make you 25? :=)
Posted by: Bill H on September 11, 2007 07:00 PMswatter, it actually pretty good. The lath and plaster walls are great insulators. The house lacks central air though so all my heat comes from a gas fireplace. Its centrally located and does a good job.
I love the charm of old houses too and they really don't make em like they used to unless you want to spend a ton.
Cato, maybe I've seen you around the neighborhood then. I am not far from the Red Apple.
Bill, sorry for the poor word choice. I am 25.
Posted by: Giffy on September 11, 2007 08:02 PMLook, people don't like it, but change happens. You can never go home again. Neighborhoods change and their character is in some ways worse, and some ways better.
But stopping this change is as pointless and self-destructive as trying to stop globalization.
Seattle real estate has a small bubble on top of fundamentally positive and solid growth. There will be a small correction, but the overall trend is good. It's all about the people getting richer. That is a good thing.
The poor will always have to find the cheap places to live. Some of the poor will get richer and move into the middle class. There is too little of this movement in this country, but there is still more such movement in the US than in any other country in the world. This is because we are one of the top free market economies in the world. Movement between the economic classes is MUCH lower in socialized countries like Germany and France.
Gentrification is change for the better. We should welcome it, even as we mourn the loss of the neighborhoods we grew up in. The neighborhood is dead. Long live the neighborhood.
People hate change, but it is inevitable. And the older we get, the more ossified our brains get and the more painful change is for us to accept.
Embrace the change you can not avoid. Make the positive change you can. Seek the wisdom to know the difference.
Posted by: Bruce Guthrie on September 11, 2007 08:10 PMIsland county took in 10 million more last year then the year before.
And it looks like they want an extra 10 million this year too.
Must be nice.
It is why I am voting Hell no on all their massive tax hikes coming up.
classism vs opportunity
I meant to be over the top .. call it humor.
No divergence is only a good thing IF the opportunity is there, as it has been, historically in the US. In contrast, England stratified into classes a hundred years ago and we are in danger of that. A "class" .. as I use the term .. is not just a momentary income group. It is a group of people who inherit status in society. In England that occurred partly because of hereditary aristocracy but more dangerous is when a class become fixed because of opportunity.
I agree strongly with Russel that some on the left are as classist as most on the right. On reason I support Obama is his strong stand on opportunity.
@33 The Tim
I hope yu are right that the market will correct itself but I am not convinced. Seattle could turn itself into Manhattan, with rich folks and servitors living in the burroughs.
@39 John Bailo
I agree with you about the creative class. How does one preserve that w/o fucking with the free market?
Posted by: SeattleJew on September 11, 2007 10:24 PMIt was? You got some sort of evidence of forced gentrification to back up your claim?
Ranier Valley is being gentrified because it's close to downtown and still has quasi-affordable housing. Once Fremont, Ballard, and Capitol Hill got trendy and less affordable people decided to look elsewhere. What's left? CD, Othello, Rainer Valley, etc. It's called Free Market Publicbulls**t, people move to the city, there is a demand for housing, people look for housing they can afford. I know lots of first time home buyers who are now moving to Greenwood and Shoreline because they can't afford to buy in the neighborhoods they used to rent in.
More people are coming, creating more demand, creating more high-occupancy zones. See the example of my neighbors house, the land is perceived as valuable, it makes more sense to build for 4 - 12 people who will each pay $300 - $650k each for a townhouse than build one single family home that goes for $700k - 800k. It's simple math, you get a better return for your investment with the townhouses than you would with the new single family residence. It keeps on giving if you do a mixed use conversion where you rent out the bottom floor (ie the least desirable for living) to small businesses who generate revenue and pay you rent. Can't do that with a single family home.
Giffy, I live a two blocks north of the Arco station that's kitty corner to the HS.
Maybe you should check your Seattle history before opening your mouth because it's clear you have no clue what your talking about.
Feb. 13 1968:
Voters approve $40 million of "Forward Thrust" bonds to build the Kingdome, the Aquarium, youth centers and highways. But voters reject a $385 million mass-transit proposal.
May 19, 1970:
King County voters reject four Forward Thrust bond issues for a regional rail transit system, storm water control, community centers, and new County public health and safety facilities.
...within two years, and win voter approval of an all-bus Metro Transit system
Now explain to me how the Govt. is at fault if the people of King County vote against mass transit? Looks like the Govt. wanted to invest in it but the voters rejected the idea. I doubt people in the '68 and '70 thought that Seattle would expand as rapidly as it did in the mid to late '90's.
You can read any of the 20 year planning documents from Seattle, The County,The State,even the Feds,and they all say they planned to get people to drive fewer lane miles by coercing them to fill in the urban centers
You make this point which I believe, not all cities are like Seattle with a strong downtown core. Look at the Midwest where downtown is full of half-empty to abandoned buildings and all the business happens in the burbs. Cities like Louisville & Detroit where the sprawl goes on forever. No one lives or wants to live downtown in those cities.
Sound transit by design created mass gentrification ,and mass relocation.
Ummm yeah, you keep telling yourself that.
I am sorry that you don't agree,and the truth bothers you so much.
I'm not sorry about anything, you can't even get your argument straight. Is it roads or gentrification? You make bad and arguably racist poems about Ron Sims. Then you start in with the sandwich thing which doesn't relate to anything and makes no sense whatsoever.
The D's have ruined our profitable business concepts,now they have no choice but to raise property taxes to compensate.
There are plenty of profitable business in Seattle both big and small. Look at the downtown core, it keeps expanding. In fact they just raised the height limits in other areas of the city to accommodate all the demand for growth.
"There are plenty of profitable business in Seattle both big and small. Look at the downtown core, it keeps expanding. In fact they just raised the height limits in other areas of the city to accommodate all the demand for growth".
Small business either has lost all profitability,or has very little profitability.
Fact in 1980 I sold 30,000 dollars worth of Sandwiches at 3.50.
Government overhead increases forced price increases to 5.50 a sandwich and I sold 15,000 dollars worth of sandwiches.
There are empty buildings all over seattle waiting to be converted into high rise condo's.
That is where the money is at,Not business.
We can argue about this all day long but figures dont lie and liars cant figure.
If you think selling 8 dollar sandwiches is a money making proposition then Like I said Knock yourself out.
Me I am off the hamster wheel ,and I plan to stay off.
You could not pay me to get back on.
There has to be incentive to buy and sell,There has to be profitable business concepts that can sign long term leases to get loans to rebuild with,That was the way to do it.
Know there are not enough profitable business concepts under long term leases to get loans with,now seattle's only game is Condo ville.
I can show you a loctaion for lease right now.
I would like to see you sign a triple net lease for 25 dollars a square foot and have at it,see how many 8 dollar sanwiches you can sell..
Whats that you want to sell them cheaper..Don't forget about minimum wage and overhead.
Until youhave been on the hamster wheel you have no idea what a small busines is like here.
If you don't think Small business is a hamster wheel then obviously you have not tried to run one.
Refering to others that are doing it does not refute my economic formula.
I suspect you would rather open up a condo.
That is where the money really is for Seattle.
The climate is right the seattle centrics have made it clear that is what they want. Why try and pretend that the economic formula for anything else is good.
That would be a lie.
If you insist on taking this stance I will have no choice but to refer to you as Mule skinner.
Mule skinner everything you say is a lie,therefore you are a liar.
I hear Starbucks sells sandwiches now, Subway & Quiznos also moved in. Maybe your completion increased as your sandwich sales fell. Maybe you had to increase your advertising budget to promote your store, so you passed these costs along to the customer via increased prices. I hardly think the Govt. had everything to do with inflation and the price of the bread you make your sandwiches with.
If you think selling 8 dollar sandwiches is a money making proposition
I don't make/sell sandwiches, nor do I have a desire too. Maybe you should sell them as gourmet sandwiches to all those gentrified condo owners downtown. They might be willing to pay $8 a sandwich if you market it correctly. I would blame your inferior business model and not the Govt. or Sound Transit.
Know there are not enough profitable business concepts under long term leases to get loans with
There are plenty of profitable business concepts, they just deal with virtual businesses that appear on the internet. In case you haven't noticed Seattle is home to Amazon.com, Real Networks, WaMu, etc. All these companies have huge online components, two of these companies operates without actual physical storefronts, one of these companies doesn't even sell a physical product. These are the types of business people are creating in those $25/sq ft locations.
Like I said, you should do the Starbucks route and call your crap gourmet and charge more money for it. Those gentrified condo folks will lap it up even if your selling the same sandwiches as the guy down the street.
I will have no choice but to refer to you as Mule skinner.
Mule skinner?? Now I'm starting to wonder if you are seriously mental instead of just slightly deranged.
I wasn't trying to...I say good riddance. Seems to me it would be very hard to run a successful business while housed in the mental institution that you are writing from.
The Golden goose for retail sales taxes was lost long ago
With the internet sales tax now being enforced statewide those $25/sq ft business will be paying sales tax on their virtual products just like their retail counterparts. While physical retail declines, virtual retail seems to be picking up the slack. Too early to tell if it will last.
Finally, you should have the nurses check your med's again. I don't think you are getting the proper amount of mental help that you obviously need.
Living wage is good but when you raise criminal justice from 59 to 74 percent the other taxes had to go up to compensate for the other services,and that is the biggest single increase in government that helped kill the golden goose.
So lust for property taxes,since the D's did not know when to say when,and killed the golden goose.
Enjoy your 10 dollar cornish game hen mule skinner you draconian visionary.
I have told each of my kids to forgo the temptations for cars, expensive purchases, etc. and to become a home owner as soon as they can. Hopefully they will listen.
Posted by: whole lotta rosie on September 12, 2007 11:12 PM