Which house would you buy?
1. 860 sq foot turn key house in Arbor Heights for 289,950. 2 bedrooms, 1 bath, no eating area, 1 car garage.
OR
2. 1040 sq foot house that needs cosmetics updating (cabinets, appliances, flooring) but is structurally sound in Highland Park for 235,000. 3 bedrooms, 2 full bath, dining area, 1 car garage.
Any advice would be helpful thanks in advance!
angelescrest
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I pm'd you.
CarolPB
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I would think the HP location would appreciate faster, but you know what they say-location location, location. How long do you plan to stay? You can always improve cosmetics over time and shop for bargains. Myself, I would go for Highland Park just for the fact of bedroom/bathroom count. But does the Arbor Heights home have a view of the water? Have you spoken with a trusted real estate agent?
alki_2008
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Assuming neither has a better view and the commuting is comparable, than I'd probably go with Highland Park. It's much more affordable to do cosmetic updates than to add square footage, and having more than 1 bathroom is highly helpful in resale.
I have a real estate agent and we may put in a bid on friday. No views for either. I do like the fact that the Highland Park home is on a dead end too.
I plan on living there for a quite awhile definitely the next 5-10 years.
Something to consider:
Do a "walkability" score on both houses.
http://www.walkscore.com/
We live down in Arbor Heights 104th and 34th. I so so so wish there was more we could walk to. Didn't really think about it when we bought the house - tho' we really like the house itself and the neighborhood has been very quiet.
beachdrivegirl
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My vote is for HP. The walkability score (at least as of last fall) wasnt accurate...at least for my location! good luck and congrats!!
lazybeard
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Color me basis, but I vote for HP as a new resident of the area.
The lower up front cost of the HP property sounds like will allow you to take care of the some of the immediate (if there are any) needs now than later.
JenV
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I am moving to Arbor Heights in a few weeks, and am excited about it because it's quiet and a great neighborhood. I am with MargL, though, I wish there were more places to walk to nearby. I don't have any experience with HP, so no help there.
The HP house you can update for less money than you would buy the AH house for. And if you needed to live with outdated cabinets, etc - you probably could live with it for awhile, right? I would always go for more space...
WSMom
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I lived in a house with no eating area and found it very annoying. We ended up putting a small table in what was the living room and tried to eat without anyone spilling on the light beige wall to wall carpeting (with a newborn & 2 1/2 year old!!!) I would never recommend anyone buy a house with no eating space!
Just a general word of advice to anyone looking to buy in "West Seattle" .. be very careful what you buy and where.
maplesyrup
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I'm not an expert in this but my hunch is that- especially in the short run- your property is more likely to appreciate in Highland Park.
And if you have or plan on having kids, in each case make sure you're comfortable with the reference schools because in the future it's probably going to be a lot harder to attend schools outside of your neighborhood.
Not planning on having little ones. And WSratsinacage thanks for the great advice-perhaps a little elaboration....
guidosmom
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Also get a very careful inspection done. We thought we had found the perfect house in HP this past winter, only to find out it was full of problems, about 90K worth of series problems. We also ran into the problem of a lot of the properties having liens against them! Good luck!
beachdrivegirl
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Guidosmom great advice! I also would suggest to ask your real estate agent what they would recommend. When, we worked with Scott Monroe, in the past he was able to go into detail a bit more on the pros/cons of each house we considered so that we were able to see the houses without rose colored glasses on.
Ashley, if you don't mind, I will PM you.
For my inspection (if the bid is mutually accepted) I will either use Reis at Inside Out Inspectins(from West Seattle) or my realtor recommended Mike from Northwest Building Inspections.
lazybeard
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I used Northwest Building Inspections for our place. Fantastic 2-man shop. Most of their work is commercial real estate but they do a thorough job on residential as well.
A friend gave me his their information originally and after looking at his sample report online, and comparing it to what my agent originally provided me, Northwest's blew it out of the water hands down.
I'll let others suggest which is a more desirable location or layout. But I do want to warn you about those prices.
The 860SF house is asking $337 per SF.
The 1040SF house is asking $225 per SF.
Keep in mind that new house construction runs about $150 per SF in this area. So both of these houses are priced too high. The 1040 SF house is more reasonable, for sure, depending on how much "updating" it needs.
Also:
- Housing prices will continue to decline for at least another three years. After that, they'll just move sideways barring any increase in overall wages (not very likely.)
- West Seattle has over a year of inventory.
- Banks are sitting on their REO's.
- There will be a boatload of foreclosures through the end of 2011 as "option ARM" (liar's) loans get recast.
I guess what I'm saying is that, in general, now is not a good time to buy. If possible, rent for another couple of years. Prices will be lower by then and certainly won't be going any higher than any "bottom" that's reached. And by deferring buying, you won't risk losing the value of your down payment due to decreasing values.
In any case, though, good luck!
maplesyrup
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I'd never use an inspector recommended by my realtor no matter how much I trusted the realtor.
Aside from the experience I had with a realtor and inspector colluding to downplay the flaws in a house we wanted to buy, the bottom line is that inspectors tend to rely too much on realtors for business referrals and therefore are beholden to them to not kill deals.
Of course that doesn't apply to everyone but it's true too often.
Even if home prices will continue to come down, I don’t agree that now is not a good time to buy. Interest rates are considerably lower than they have been in ages & there are some great bargains out there because inventory is high & many sellers are not in a good position to bargain. For buyers that are planning to keep their homes for awhile, getting a low interest rate would be more beneficial than paying somewhat less for the price of the home. Run some calculations & you’ll see what I mean.
With regard to buying a home versus renting, each person needs to factor many things in to that decision including long-term plans. I think buying is a great choice for many reasons. One is that homebuyers also have many tax advantages as compared to renters; so one should factor in those potential tax savings as you compare your options. Over time, home ownership has proved to be a better investment than many other types of investments. I’m not convinced that people should put off buying for several more years just in case the predictions above turn out to be accurate. Personally, I think it’s better to begin building equity sooner rather than later.
Not sure where the numbers cited above by PSPS are from, but I’ve heard much different numbers with regard to months of available inventory & also price per square foot on new construction.
guidosmom
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As disappointed as I was last year for not finding a house in time and buying (I was living in a duplex that was being demolished and converted to town homes so had to be out), I am now thankful. All the homes have gone down in value, and one was even advertised lower than our offer a few months ago.
alki_2008
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PSPS - do you have a crystal ball?
With rates as low they are...the Option ARM's that are resetting lately/soon will not be as dire as they were last year when rates were 100 bp's higher than now. AND...they're not all "liar" loans, by the way. Some folks CHOSE Option ARM's not because they were 'liars' but because they were betting that rates would decline.
I'm with homedk on hearing higher than $150/sf costs for new construction. Maybe it's $150/sf if all materials are low-end? Alos, consider that the cost of new construction doesn't include the cost for the parcel itself, so comparing the cost per square foot of new construction with the price per square foot of an established structure doesn't work.
beachdrivegirl
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Arent most first time home buyers eligble for up tot an $8000 tax credit if they purchase a home this year? I dont know about anyone else but that seems pretty amazing to me!
alki_2008
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It's not just first-time homebuyers, but also people that haven't owned a home in the past 3 years.
Unfortunately, there are some income limitations ($75k/singles, $150k married) and the credit is "up to" $8k (10% of purchase price up to $8k).
Still a nice bonus for those looking to buy this year though.
beachdrivegirl
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Very nice bonus! Thanks for the info, not that i qualify since I already own my home, but always good to know the facts!
PSPS... where are you getting your information/news?
alki_2008
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So, just took a look at the recent mortgage rates (which I haven't been paying attention to lately) and noticed that they've risen a considerable bit in recent weeks.
For those that focus solely on purchase prices...here's a quick summary of how rates affect affordability:
$300k purchase price - $60k (20% downpayment)
$240k loan amount
$1250/month (30yr-fixed at 4.75%, $1560/mo at 6.00%)
$260k purchase price - $52k (20% downpayment)
$208k loan amount
$1250/month (30yr-fixed at 6.00%)
If someone is budgeting $1250/mo for a mortgage, a house at $300k with a low rate would have to drop to $260k with higher rates. Right now, mortgage rates are LOW...especially considering what rates were like in the 80's (yikes!).
I've just got to add that the biggest mistake we made when buying our house was using the realtor recommended inspector. Nothing major is wrong, but in hindsight he was totally working with her to push the sale through.
As for location, I know Arbor Heights can be pretty nice, but unwalkable. I live in a slightly more walkable area, but would have maybe looked closer to civilization if I'd have thought about it.
lazybeard
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When we were working with our agent and came to choose the inspector, he gave me a couple of cards of people he recommended but I went with the party that I mentioned already.
How did I choose?
Recommendation from a friend. He showed me his report, it was highly informative & useful, with URLs to legit sites on how to fix issues. Where did he find the company? His previous agent, who dealt mostly in business real-estate. I also looked at sample reports online. Both recommendations from my agent had sample reports and they PALES in comparison to this company's.
At the end of the inspection, my agent took a handful of his cards, he was highly impressed with the work.
PM me if you'd like to see my report, there's also a sample online to.
lazybeard
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Since PMs were just recently disabled anyone can email me at lazybeard_at_gmail_dot_com
Yes i am eligible for the 8,000 tax credit which is quite nice!!! I think I am more inclined to go with Reis Pearson from Inside Out because I know her personally, she has all her credentials, BBBureau recommended, and comes highly recommended from others. But thanks everyone for your advice!!
With regard to the $8000 tax credit, be aware that it expires at the end of November & your transaction will need to have closed by then. To be on the safe side, you should allow 45 to 60 days from mutual acceptance until closing. Other considerations include King County furlough days (when transactions cannot be recorded), the Thanksgiving holiday, & potential backlogs because lots of people will be trying to take advantage of the tax credit.
This afternoon I looked up some data in the NWMLS regarding months of available housing inventory & price per square foot for new construction in West Seattle. Excess inventory has significantly decreased since last December. Here are the May ’09 stats for single family homes (not including condos), broken down by zip code: 98106 = 4.9 months, 98116 = 8.1 months, 98126 = 5.1 months, 98136 = 5.4 months. The average decrease in inventory since December is 38.3% (averaged across these 4 zip codes). With regard to the cost per square foot for new construction, the average cost in May ’09 for single family homes was $243 per square foot; breaking it down by the same zip codes as above, it ranged from $181 per square foot in 98106 to $283 per square foot in 98136. Granted, some builders are selling new construction at very low prices, but $150 per square foot is not the average price of new construction in this area.
Hope this is helpful. Good luck to you, Ashley!
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