should I buy or rent at age 64

[haha]

Quote:

Originally Posted by ontap55 great discussion and much appreciated!!! here are some more assumptions: 400k profit on existing house 350K potential new house cost in Everett wa or arlington wa 2000 dollars to rent/month if we don't buy should we buy and pay off house? buy and take out mortgage ? or simply rent...? I know some have answered but brucethebroker asked for more assumptions and wanted to provide that and also appreciate the other insights that have been offered. this is a great community of wisdom that we appreciate!!!!! hope this extra assumption data helps...

Before buying in Everett, talk to your relatives about neighborhoods. Everett has become kind of tricky in some areas.

Also, I haven't kept up with property trends in Snohomish County, but if it has more or less followed Seattle, I would be concerned that you might be buying just in time to get your butts kicked. Historically, when central Seattle or high quality eastside properties get a cold, more distant parts of the metro get pneumonia.

Boeing has had recent layoffs locally, but I am not sure if the Mukilteo plant is affected or just Renton. Whoops, looks like Mukilteo is affected. https://www.heraldnet.com/business/c...ayoff-notices/

Overall, I would likely side with the "just rent" fans. Even though I am a very long term Seattle resident, and never plan to take my carcass anywhere else for any time, if I did not already own my condo, I would rent, not buy on this recent crazy market. An anecdote: We all tend to have at least one reliable contra-timing friend on real estate matters. My friend reliably zigs when he should zag. So he recently got laid off and decided to tide himself over by buying some ground and a yurt farm which he will administer. Well, almost anything is possible, but some things are not very probable, and some things are downright get out of Dodge asap warnings. I see this as one of these leave now type things.

I believe that timing is key in any transaction, so if you do not see things this way, do whatever, but I would avoid deteriorating Everett and some other Snohomish county neighborhoods. I have no recent reliable information, as I have lived in Central Seattle for quite a time now, and I don't see much Snohomish County news. Penetration of opioids into formerly ok neighborhoods has been profound.

I have sometimes managed to get cops to talk to me about areas I might want to avoid.
Hard to imagine that you would get into much trouble in Arlington, other than perhaps landslides on slopes around the river. Still, seek local counsel, not realtors some of whom will lie their heads off.

Ha

[ontap55]

Good advice haha and had heard of the Everett situation so we will try to avoid those areas. Marysville and lake Stevens are also under our consideration, any thoughts on those areas? With the real estate market being bonkers due to Amazon hiring etc.,, renting for a while and waiting for the calm is weighing heavy in the decision process. Thanks!!!

[brucethebroker]

Quote:

Originally Posted by ontap55 great discussion and much appreciated!!! here are some more assumptions: 400k profit on existing house 350K potential new house cost in Everett wa or arlington wa 2000 dollars to rent/month if we don't buy should we buy and pay off house? buy and take out mortgage ? or simply rent...? I know some have answered but brucethebroker asked for more assumptions and wanted to provide that and also appreciate the other insights that have been offered. this is a great community of wisdom that we appreciate!!!!! hope this extra assumption data helps...

Here are two questions to consider: If you pay cash for a house (I am having a hard time with $24k a year in rent), would you be OK if the market crashed and your home devalued to $275K? If the kids moved, would you stay put (if so, find a house 20-30 min. to a major airport...). If you like that area, and don't care about your home future values, and aren't going to play the "follow the kids game" after one time, I think that paying cash for a home is a good idea.
Having said that, you can borrow $200k for around $955 a month (4%, 30 year fixed, P&I only) and much cheaper than rent. Why not put $150k down and finance? (Who cares if you die and still owe a mortgage?). Should interest rates jump up, laugh all the way to the bank (when getting 7% on your $200k in CD's). Should rates fall, refinance.
Just a few thoughts to add to the wisdom already revealed....

[haha]

Quote:

Originally Posted by ontap55 Good advice haha and had heard of the Everett situation so we will try to avoid those areas. Marysville and lake Stevens are also under our consideration, any thoughts on those areas? With the real estate market being bonkers due to Amazon hiring etc.,, renting for a while and waiting for the calm is weighing heavy in the decision process. Thanks!!!

I think you can read the Everett Herald free online. WWW. Heraldnet.com. It is a pretty decent paper. Also Seattle tv news- li
Komo tv, or KIRO. These will carry a lot of Snohomish County news, both real estate and crime. Try city data online, it may have an Everett area. I used to live in northern Snohomish County, and I really enjoyed coming down to Everett, a good working class industrial city. But investigate carefully.
Ha

[candrew]

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Originally Posted by Koolau +1 Our 2 grandkids have moved 3 times in 6 years. Trying to follow them around would have been a fool's errand. I would vote for renting if you must be close to the grand kids. For us, we went where we wanted to live and then we said "the planes fly both ways." YMMV

Following this line of thought, a poll could be created - "Should you live your life for the sake of your adult children and/or grandkids?"

I expect that question would elicit some very heated discussion!

[Koolau]

Quote:

Originally Posted by candrew Following this line of thought, a poll could be created - "Should you live your life for the sake of your adult children and/or grandkids?" I expect that question would elicit some very heated discussion!

That would indeed be an interesting discussion. I'm guessing we would be at the far end of the "living for ourselves - not for the grandkids" spectrum. We have some friends who are at the other end. We invited them to Paradise for a week or two (spare bedroom w/bath). All it would cost them would be airfare. They accepted, but then the grand kids were having an "event" that they just couldn't pass up. Not knocking it, just sayin... YMMV

[ontap55]

good points from brucethebroker in that perhaps a partial loan and the rest in CDs makes really a lot of sense as we had not thought of that. to answer your questions, if the house value falls then our thinking is that wherever we would move to (if we followed the kids) would also be in a decline (we hope!).

[Scuba]

Quote:

Originally Posted by ontap55 good points from brucethebroker in that perhaps a partial loan and the rest in CDs makes really a lot of sense as we had not thought of that. to answer your questions, if the house value falls then our thinking is that wherever we would move to (if we followed the kids) would also be in a decline (we hope!).

Not necessarily. "Hot" real estate markets usually decline a lot more than ho-hum markets. Also big declines can be related to specific industries that dominate a local economy. Unfortunately I speak from personal experience. Lived in Houston in the 80's and when the oil industry collapsed, so did home values. Have also been through major real estate market drops in So CA. Homes in inland So CA, FL, & Vegas dropped a lot more than many other markets, although they also rose a lot more in the good times. As long as you're willing to absorb a significant loss or wait it out for what could be 5+ years before values recover after a large drop, fine. But if not, renting is a much less volatile option.

[haha]

Quote:

Originally Posted by ontap55 good points from brucethebroker in that perhaps a partial loan and the rest in CDs makes really a lot of sense as we had not thought of that. to answer your questions, if the house value falls then our thinking is that wherever we would move to (if we followed the kids) would also be in a decline (we hope!).

This thread kind of interests me although I am not sure why. One thing I have noticed over that years is that everyone is an expert on Seattle, often because they lived somewhere around here years ago, or perhaps they came here some summer to take an Alaskan cruise.

I think your reasoning as expressed here may mislead you seriously. This recent house run-up is spotty, not everywhere like in the 00's. In Seattle anyway, it is based on relatively well paid young software developers and ancillary employees. This is a strong effect in maybe 10 metros. Also, here it is likely to cost you roughly 10% of your selling price all-in costs to get out. And, it may not really be possible to sell at anywhere close to what you paid going in. Or sometimes, even to sell at all.

I bought my condo within 1 mi of Pike Place Market for half of what it had sold for several years earlier. 30% of the units in this building were in foreclosure.

Also, you didn't say where your children live. Traffic is basically horrible on I-5 much of the time. Lake Stevens is much closer than most of Marysville, and Arlington is farther yet. Furthermore, no need to go onto I-5, just straight west over a bridge into Everett. Not sure, but there are likely quality apartments right in nicer parts of Everett as well as Lake Stevens. And of course houses for rent. Thank heavens for divorce, right?

Re noise-I live in a condo and I have never heard any neighbor, except occasional footsteps from above. A great deal depends on the layout and quality of the building. If you are moving from the middle of a cornfield and you have extreme aversion to sounds of other humans, then you understand this and anyway you ruled out discussion of this. Generally there is more neighbor noise in a suburb with radios, lawn mowers, leaf blowers and barking dogs than in a true urban environment.

Ha

[TeeRuh]

We just bought a new home (age 66). I looked at it purely from an asset allocation perspective. With the market run-up we've experienced over the past 10 years I felt under represented in real estate. (Some say 20-30% of net worth should be in real estate. I'm sure there is disagreement on this and I won't attempt to defend.) I also financed about 1/3 of the cost. Have made 8% on that money while paying 4% on the loan. YMMV

t.r.

[ontap55]

FYI- kids live in upper east Everett for 5years now in nice neighborhood which was considered bad 10 or so years ago but according to neighbors who have been there longer say it's really turned out to be a good quiet one which we also have observed when visiting.

[ontap55]

BTW-excellent post and thoughts from everyone and I welcome more thoughts if you have them as this will be a difficult decision but all comments have really helped and we have learned a lot!!!!

[Clone]

I would also want to rent for a year just to make sure that we are OK with the weather and the local culture.

[tulak]

Ha, I'm curious. Do you think the Seattle run-up is temporary and will self correct with time?

I've been here decades and this feels more permanent to me. Something along the lines of what occurred in the Bay area. Seattle is expensive, but compared to the Bay area we are still cheaper. That doesn't help, since we're seeing a lot of transplants, but at some point you'd think we'd hit a max?

[brucethebroker]

For real estate, the coastal regions are quite different from most of the rest of the country. Here in (most of) the Midwest, we have "always" had slower appreciation-until the black swan of 07 hit. None of my 30 years plus experienced RE broker friends had ever experienced that.

In our area, 2-3% a year appreciation, with very little downside risk, was common for as long as anyone could remember. Now, it is a little higher, but that is most likely from pent up demand from 5-6 years of no new construction.

Some nice areas to live with low COL and no housing sticker shock. Cincinnati, St. Louis, Indianapolis, Columbus, OH, Louisville, etc.

[Out of Steam]

To answer directly:

Should you buy a house at 64?

If you believe you'll be there 7 years or more, likely yes.

Should you buy a house as your first place to live in an unfamiliar metro area at 64?

Probably not.

[haha]

Quote:

Originally Posted by tulak Ha, I'm curious. Do you think the Seattle run-up is temporary and will self correct with time? I've been here decades and this feels more permanent to me. Something along the lines of what occurred in the Bay area. Seattle is expensive, but compared to the Bay area we are still cheaper. That doesn't help, since we're seeing a lot of transplants, but at some point you'd think we'd hit a max?

I truly wish I knew! Both my sons are software developers, one lives here in Ballard, and the other in SF. As you say, rents and sales prices are much greater in SF than Seattle or Bellevue/Redmond. The son who lives here says some of his co-workers have come from SF or San José and they really like the prices here. This has actually been going on for 50 years.

When I moved here ~50 years ago local people were amazed at the rent I had been paying in Kensington (East Bay). People coming here from coastal LA or Bay Area with pockets full of gains from housing down there always ruined prices here!

So I really do not know. I know most of the recent downtown or near-downtown development has been apartments, not condos. My RE lawyer friend says apartment developers have much less liability in WA and an easier exit (selling to REIT or similar) even before full lease-up.

Both Seattle has reached a point where unless we get much better rapid transit much faster than we have been doing so far, ground to build other than true high-rises is just too far away to commute to one's job. At peak quitting time it may take an hour to drive the roughly 6 miles from downtown to Ballard, and similar on the bus. Teleworking will help some, but I noticed recently a big tech company is cancelling teleworking after embracing it for quite some time. Sorry, can't remember who. ( It's IBM) Teleworking is for the most part just more Brave New World hype.

Here is a good article from Seattle Times about local real estate issues:

Condo prices climbing even faster than houses | The Seattle Times

Ha

[tulak]

Ha, thank you for your reply. I'm always interested in other opinions regarding the local RE market. I might be in a situation where I'll be buying into this market within the next few years. If that happens, I might have to get creative (unfortunately).

Regarding apartments vs condos, I've heard the same. My personal hope is that this will eventually lead to a glut of apartments, resulting in stable rent prices. Eventually this growth has to hit a ceiling.

I can relate to the commute times. My commute is less than 7 miles and it easily takes an hour during rush hour. I usually try to bike instead, which guarantees me a 30 min commute. That's really not an ideal solution, but so far it works.

I believe that a lot of people deal with the commute times for well paid jobs and employment stability. The tech sector is pretty flexible when it comes to work hours and the pay/job security can't be beat.

As for IBM, I know someone local who was affected by this change. He was offered a position in IBM's east coast offices or a package. He was close to retirement and took the package. I know a lot of tech companies don't allow full-time telecommuting on a regular basis (unless your special). Usually you can do a few days every now and then, but not regularly. Of course, this depends on the position. A salesperson is more likely allowed to telecommute than a software developer part of a team.

As a side note, I was driving through SLU recently and felt like I was transformed to another city. All of my points of reference were gone. That was an odd feeling. Personally though, and maybe that's unique for a local, I'm enjoying all the new development. I only wish that it would be more affordable!

[haha]

Quote:

Originally Posted by tulak As a side note, I was driving through SLU recently and felt like I was transformed to another city. All of my points of reference were gone. That was an odd feeling. Personally though, and maybe that's unique for a local, I'm enjoying all the new development. I only wish that it would be more affordable!

Tulak, I enjoyed your comments. Re: the new RE development, if only it were more affordable-I think it could not be more affordable without subsidies, and I can just imagine what Kshama Sawant might say about subsidized apts for software guys!! Sometimes one might think that young well paid developers were a social problem rather than a big help to the community.

Ha