Tuesday, October 27, 2009

Seattle is Hot (& Hip)!

This is a bit of old news (article came out about a month ago), but I came across it again so I thought I would mention it. According to a panel at the Wall Street Journal (WSJ), Seattle (tied with D.C.) is the hottest, hippest city to live in for young, highly mobile people. The type of industries that call Seattle home as well as the culture and the easy access to nature put Seattle at number one. It was also pointed out at the bottom of the article, where you can click through to each city, that a newcomer to Seattle could rent an apartment for less than $1,000 implying, at least for renting, that housing is affordable here. This is certainly the case when comparing NYC (#3 on the list) - read my previous blog on average prices in Manhattan.

Read WSJ article for more details.

Friday, October 16, 2009

Average two bedroom apartments only $3,381....in Manhattan

The average rent for two bedroom apartment in Manhattan fell 8.9% from the previous year making the average price $3,381. The main culprit is the lack of work in the New York City. Unemployment in NYC was 10.3% in August the worst it has been since 1993.

Bloomberg News

Wednesday, August 19, 2009

Quick Look at Seattle Rental Numbers

I did a quick look at the rental numbers in the Northwest Multiple Service (NWMLS) at the Seattle rental numbers. Same disclosure as always: NWMLS only has a fraction of all the city's rentals because it only includes rentals by real estate agents that are members of the NWMLS. For example, there was 62 units rented by NWMLS members in Seattle for the first half of August 20009, but this is up from 49 units rented in the first half of August 2008. Anyway, at least for the first half of August when I compare the mean for 2009 with 2008, the price per square foot is up over 2%. The mean price per unit is down 16.5%, but the size of the units are down over 18% which keeps the price per square foot relatively high. It is interesting that presumably the units are lesser quality because in 2009 the mean unit is 2 bedrooms and 1.5 bathrooms, when a year ago they were 2 bedrooms and 1.75 baths. So the amenities are less while the price per square foot is up. It does take 6 more days in 2009 (29 versus 23 days) to rent the units.

Monday, August 3, 2009

King County Residential Rental Data - July 2009 & 2008

The data from the Northwest Multiple Service (NWMLS) shows the following for King County:

In July 2009, there was 396 units rented with the median price of $1,795 or $1.15 per square foot. The median days on the market was 38 days.

In July 2008, there was 292 units rented with the median price of $1,963 or $1.12 per square foot. The median days on the market was 23 days.

(Note: See my June blog regarding the limitation of the NWMLS rental data.)

When comparing July this year with last year, you see there is over a 35% increase in the number of units rented which has been a trend the last three months (both June and May 2009 were both about 30% more than the similar month of the previous year). The MAJOR twist is the price increased over last July (July '09 = $1.15/ft versus July '08 = $1.12/ft). In fact the price per square foot in July jumped significantly from June ($1.01/ft) and May ($1.04/ft) of this year and reverses the trend of the price being significantly less than the previous year! This news should be tempered by the days on the market which continue to be significantly higher than in 2008, but the pricing news seems significant. We will have to wait and see if the pricing will continue to increase or at least hold to see if this was just a blip.

Tuesday, July 21, 2009

Hot New Rental

Hey I just listed a 2br/2.5bth condo in the Madison Tower/Hotel 1000 for $3,995/mo. Beautiful hardwood floors, slab granite counters, and active city and Sound views. Enjoy the Resort-style amenities of Hotel 1000 including the spa, room service, virtual golf, library, conference rooms, valet parking, exercise facility, 24-hour concierge & roof top terrace with incredible views. Check it out!

Tuesday, July 7, 2009

King County Residential Rental Date - June 2009 & 2008

Just as I did in May, I reviewed the data for the residential rentals in King County on the Northwest Multiple Service (NWMLS). As I pointed out in my blog on the May numbers, the NWMLS has its limits when analyzing the number of units rented. The most significant limit is the NWMLS only has information on rentals that are represented by a licensed agent who is affiliated with the NWMLS. Thus it does not include large apartment complexes that tend to have their own in-house sales team nor does it include owners who rent their units without any one's assistance. Nonetheless, I find the numbers are interesting and informative.

In June 2009, there were 387 units rented and the median price was $1,850 or $1.01 a square foot. The median days on the market were 33 days.

In June 2008, there were 285 units rented and the median price was $1,875 or $1.24 a square foot. The median days on the market were 24 days.

At a glance this seems similar to the numbers reported in my blog on the May numbers (328 units rented/$1,795 per month/$1.04 sq. ft./38 days on market), but one can see some changes. While the price dropped a little less than 3% per square foot, the number of units that rented jumped 18% (in a month with one less day) and the days on the market decreased about 13%. When comparing June of this year versus June of last year, one can notice that the number of units rented were much higher in the current year (35.5% higher), but the price per square foot was lower (-18.5%) and days on the market were longer (37.5%).

Thursday, July 2, 2009

Googled: "Rent versus Own"

So I googled "rent versus own" and it came up with a bunch of calculators to help someone decide which to do. I decided to try each of them using the following factors: paying rent at $1,500/mo. versus buying something for $300,000 with 10% down (along with other assumptions).

The first calculator I tried was http://www.vlender.com/cgi-bin/calc/rent_vs_buy.cgi because it came up first on the search. I spent the most time playing with this calculator since I was fresh and not easily bored. The thing I like about this calculator is that information is entered on the same page as the results, making it easy to go back and forth and see how certain numbers change the result. But there were some drawbacks. For example, I was trying to figure out how it calculated everything (which is a drawback in and of itself as the answer is not very intuitive). I learned very quickly that many of the fields did not effect the calculation at all. So don't waste your time putting taxes, maintenance, insurance, or loan cost into the calculator since, as far as I could tell, none of these changed the results. For comparison purposes, therefore, you should not factor in rental insurance since home owner's insurance was not considered in the calculation. Another issue I had was that I could not determine how 'equity appreciation' was calculated.

Next I tried http://realestate.yahoo.com/calculators/rent_vs_own.html. I liked this one better. Unlike the previous site, I could determine how 'equity appreciation' was calculated and all the levers seemed to work if I changed them. It also considers inflation which the other calculator does not. In addition, the answer is laid out so you can see how each number you input influences the outcome. Finally, it has a simple graphic comparison and information on a year by year basis.

http://www.eloan.com/s/rentvsown/input was the next site I tried which I liked, mainly because it was simple. Unlike the previous two calculators, this one only asked for five inputs and then made assumptions on the rest (all which seemed reasonable to me). While I thought this was beneficial, I could see some people disliking it since if you disagreed with the assumptions you would be powerless to change them. The answer was laid out well so you could easily determine how everything was calculated.

Other useful information was found on Ginnie Mae's website, http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy.asp?subtitle=ypth. While I did not review the calculator, I liked the simple table that compared paying $800/month in rent versus a $1,000/month mortgage.

A weakness I see in all these calculators, including the table on Ginnie Mae’s website, is the reliability of the tax savings figures. Without going into too much detail (full disclosure: I was a tax consultant in a former life), the determination of whether the renter/buyer is single or married greatly effects the tax savings calculation, especially on a lower end purchase. This is simply because Itemized Deductions only save on taxes for the amount that they exceed the Standard Deduction, which in 2008 were $5,450 if you were single and $10,900 if you were married.

After reviewing all these calculators, it made one thing clear: assuming the decision between renting and owning comes down to dollar and cents (as oppose to other factors as ease of moving, control of decor, etc.), the major difference in the cost or renting versus owning is the possibility of appreciation/depreciation. In other words, assuming that there is no appreciation or depreciation, then it basically comes down to what your monthly payment is. Thus, in that scenario if you pay $1,500 to rent, then that is better than paying $1,501 to own. As I am saying this, I realize this is a vast simplification and I should stress that I am not suggesting one should rent or one should buy, all I am doing is reiterating that when it comes down to purely money without appreciation renting and owning are on pretty even ground.

Monday, June 29, 2009

Exceptional View from Queen Anne Condo

We have a large 2 bedroom 3 bath condo unit for rent on Queen Anne. This unit overlooks Lake Union all the way to Gas Works Park. Hurry and lease before the 4th of July and you will have a front row view of the fireworks. Unit has its own private rooftop deck to enjoy all the festivities. Master bedroom has walk in closet and soaking tub. Washer and dryer in unit. 2 secured parking spaces included in the rent.


Thursday, June 25, 2009

Now Available: Beautiful West Seattle Bluff Unit

I just brought to market a 1,200 square foot unit in a brand new triplex. The unit has 2 bedrooms, 2 bath with an unobstructed view of Puget Sound. It features a gourmet kitchen, high ceilings, and wood floors. It also includes garage parking. Another plus is all the utilities are included in the rent which is $2,445.

Check it out: http://www.ewingandclark.com/properties/details/677595-6626_sw_admiral_way_seattle_wa_98116

Friday, June 19, 2009

King County Residential Rental Data - May 2009 & 2008

I was just looking at the rental data for King County on the Northwest Multiple Service (NWMLS). The Northwest Multiple only shows rental information for units that were represented by a licensed agent who is a member of the NWMLS. Thus the data only represents a portion of the rentals in King County. Saying all this, I will point out the data and let you make your own conclusions.

In May 2009, 328 units were rented, with a median list rent price of $1,795 or $1.04 per square foot, and median days on the market of 38 days.

In May 2008, 256 units were rented, with a median list rent price of $1,850 or $1.15 per square foot, and median days on the market of 27 days.