Bubble-icious
Interesting article from the Wall Street Journal about housing prices in the Emerald City. With prices seemingly impervious to gravity — houses on my block have risen $100,000 in 18 months — the article examines the increasing gap between the cost to buy and the underlying value as determined by rents:
…a duplex in Seattle’s Queen Anne neighborhood with an asking price of $799,000. To bring in enough to cover monthly expenses plus make a profit, he would have to rent units for nearly $3,000 a month — which makes sense in New York or San Francisco, but not in Seattle. He later found out that the sellers were hoping an out-of-state bidder unfamiliar with Seattle rents would bite.
Are rental prices steady or falling all over the city? They certainly seem to have declined a bit in North Seattle, but I’m not familiar with the current rates on Capitol Hill, Belltown, etc…
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They’re still overpriced, but rents in my neighborhood (First Hill) have stayed about the same for a while now.
Rumour has it that rental rates are on the rise again, as people are being pushed out of the buying market. A few friends have moved around the Hill because of their apartments raising the rent, and mine has been threatening to do so (and the minute they do, I’m out of here…)…
I remember living in Seattle when suddenly everything crashed and all the graduating college students (like myself) suddenly could afford to rent apartments in Queen Anne and Capitol Hill. It was exciting. Or maybe we were just making more money. But it really did seem like rents went down in 2002-ish.
Interesting what you say about rents rising as people are pushed out of the buying market–a friend whose father owns several buildings here in Brooklyn just decided to rent a (gorgeous) apartment for less than he could get for it now becuase he think the rental market is going to crash.