Today there is nearly an even split between Seattleites who rent and Seattleites who buy. It’s a personal decision, one driven by factors such as your career stability, family plans, and, of course, your savings. To help you figure out what to do, we’ve put together this guide, which details both the positive and negative sides to either route.
The best place to start if you’re considering buying is with some questions about your financial stability, according to Matthew Gardner, chief economist for Windermere Real Estate in Seattle. First, he suggests asking yourself: Are you comfortable in your job? (i.e.: Do you feel like it’s a stable position that you can potentially count on for years to come?)
Second, ask yourself: Do you feel comfortable with the debt and mortgage payments you would need to take on if you made this purchase?
Both the New York Times and Zillow have valuable online tools that you can tailor to your personal financial situation to help you better understand the specific factors at play for determining if renting or buying is a better decision for you, but here’s a broad idea of what both cost.
Seattle has some of the highest housing costs in the country for both renters and buyers. The median rent price for a one-bedroom apartment is $1,945, while the median home value for a three-bedroom home is $751,000, according to Zillow.
If you’re going to rent, you’ll need to pay a lot less up front. You’ll likely be asked to pay a security deposit and some non-refundable fees, such as a cleaning fee. In Seattle, these cannot cost more than one month’s rent, and all tenants have the option of setting up a 6-month payment plan with their landlord in order to cover these costs.
There are a lot of new apartments being built right now in Seattle, which means prospective renters are seeing more options for housing popping up. That also means that while rental prices are still fairly steep, some landlords have started offering perks, such as a free month of rent or free electronics, in the hopes of enticing tenants.
If you’re going to buy, the standard down payment in Seattle is 13.6 percent, according to Gardner. So, the down payment for an average-priced home would be around $100,000. However, you might be able to save on property taxes—they’re going down by 1.2 percent. The Seattle Times reports that if you have a median value house, your property taxes last year were $5,709, and this year they will be $5,642.
Plus, overall, home prices appear to be on their way down. Over the past year, Seattle’s home values have declined by 4.5 percent, according to Zillow. The online real estate database predicts that over the next year prices will fall an additional 3.8 percent. So if you are looking to buy, now might be a good time.
Finally Gardner says to ask yourself: Are you comfortable with the idea of living in a house for the next seven years (A number he said he considers a sweet spot when it comes to buying a home)?
Buying a home means taking on repair and maintenance responsibilities that, in a rental property, would be handled by the management company. If your toilet clogs or your oven stops working, you’re the one who has to find and pay for a plumber or electrician. It also means handling noise complaints and other issues that may arise with your neighbors yourself.
In a city as pricey as Seattle, buying a home you can afford may also require living far away from where you work. Gardner explains that the closer you get to the area’s job centers, the more expensive prices become (this can be true for rentals too, but financial outlay is much greater when you’re buying a home). Depending on your budget, you may need to ultimately choose between avoiding the congestion by renting a place close to where you work, or buying a home but having to spend potentially hours commuting each day.
“For some people, that proximity is important and because of that they might end up choosing to rent just to stay closer to their office,” he says.
Deal-seekers are looking to neighborhoods and cities outside of the center of Seattle or even in surrounding cities where new Link Light Rail stations and routes will be installed over the next decade. For example, a light rail station is under construction in Northgate, a neighborhood in north Seattle. It’s set to open in 2021, and home prices in the area are still fairly reasonable. The median home value in the neighborhood is just under $400,000, according to Zillow.
“When you have light rail then you can be farther out because you know how long your commute is going to be,” said Gardner. “A lot of people are now being thoughtful about that, about moving out to somewhere that is in the path of mass transit areas.”
Tim Thomas, a postdoctoral fellow at the University of Washington who researches neighborhood change and housing inequality, said there is a lot of hassle that comes with finding and buying a house. But once you do, you will be able to enjoy a lot more stability compared to renting.
“If you can afford buying, that definitely provides security, and you don’t have to be at the behest of a landlord,” he says. “It definitely solidifies your housing opportunities, which allows you to start improving circumstances, building community; it allows you to stay in one area, and that has a lot of social and economic benefits.”