Seattle area "sticker shock" is a matter of perception
When Ivan Barron and his wife, Kim Lopez, began looking for a home in Seattle's Laurelhurst neighborhood, they thought they'd find a three-bedroom...
Special to The Seattle Times
When Ivan Barron and his wife, Kim Lopez, began looking for a home in Seattle's Laurelhurst neighborhood, they thought they'd find a three-bedroom, two-bath, 1,500-or-so-square-foot house for about $400,000. But prices on the sort of home they want start at $475,000 and run up to $600,000. Now they plan to spend $450,000 on a fixer.
Their hunt for a home might sound like just another scary tale from local homebuyers, but Barron, 29, and Lopez, 26, are more accustomed to high prices than the typical local buyer: They're moving here from Las Vegas, ranked as the second fastest-appreciating housing market in the U.S., according to data released this spring by the National Association of Home Builders.
Like locals, newcomers are finding that they have to pay more than they thought to own property in Seattle. Even buyers from pricey markets on the East Coast or fast-appreciating Southwestern cities are raising their eyebrows at prices in Seattle, once considered reasonably priced for a city.
John Cameron, an associate broker for Century 21 North Homes Realty in Seattle, is used to delivering bad news to out-of-town clients about the cost of housing.
"The sticker shock usually starts on the phone," Cameron said.
"A crazy market"
David Bell, an agent with Re/Max Metro in Seattle, said the dozen or more relocating clients he works with each year are often disappointed to learn what their money will buy in this area.
But because real estate has appreciated around the nation, he said, Seattle still compares with the same cities as before, including Boston and Chicago. It remains much pricier than metro areas in Texas and most of the Midwest but less costly than San Diego or the Bay Area.
"Seattle's expensive," he said. "There's also a lot of information out there about prices that's very misleading."
Still, there's no mistake that buyers are paying more than they used to.
"Right now Seattle is a crazy market," Barron said, noting that many of the two dozen or so homes he and Lopez had considered were sold the day their "For Sale" signs appeared. "It's like San Diego was two years ago or Las Vegas was 18 months ago. I've seen (escalating) prices moving up the coast."
Barron and Lopez were prepared to compete for housing here. Both of them grew up in Washington — he, in Seattle; she, in Spokane. Both work in the mortgage industry and have lived and invested in properties in hot markets, including San Diego and Las Vegas. Still, Barron said buyers must really want the lifestyle here to justify the prices he's starting to see — about $100,000 shy of what he saw in San Diego.
"We've started to think about Seattle as more like a San Francisco," he said. "This is my hometown, so that's why I'm willing to pay a premium."
Bay Area alternative
Rima Kulikauskas, 39, and her husband, Jim Alumbaugh, 38, recently moved to Seattle from Chapel Hill, N.C. Kulikauskas and Alumbaugh are from California and decided to leave Chapel Hill to return to the West Coast. However, Kulikauskas said their first choice — the Bay Area — had become too expensive. Seattle, she said, was a good alternative.
"We didn't feel we could afford to return to Northern California and maintain our lifestyle," Kulikauskas said. "We would've needed another $100,000 for a home. We also would've faced long commutes."
In Seattle, the family was able to buy a home in a desirable neighborhood, Ravenna. While Kulikauskas said the home cost more than they had planned — the high $400,000s, instead of the high $300,000s — she and her husband decided to spend more to buy a home they could grow into rather than spend their original budget on a home they might outgrow.
They closed on their 1929 three-bedroom house in early August and will move in next month, she said.
"We bought it thinking we won't move again," she said. "We can't move again."
Still, while Seattle was a good alternative to the Bay Area for a family that wanted to live in a West Coast city, Kulikauskas said it's expensive compared with Chapel Hill. There, the family had a home with a garage and bigger lot that sold for $300,000.
A change of mind
Cameron, who does half his brokerage business with people moving to the area from another state, said his clients' opinions differ, depending on where they're from.
"About half of them would say it's rough here, and the other half would say it's comparable to where they came from," Cameron said. "Then there are a number of people who look at housing here and decide not to come."
One who changed his mind was a doctor from the Midwest who toured homes with Cameron while considering a Snohomish County hospital job. The doctor told Cameron he could pay up to $500,000 for a home, but when he saw what that bought in the Puget Sound region, he stayed where he was.
Still, Cameron said, he hears fewer complaints about Seattle housing prices than he used to. Many of the relocating professionals he's worked with come from states such as California or Massachusetts and are accustomed to competition. They aren't afraid to make offers the day a home lists and to skip contingencies and add escalator clauses, he said.
"People from major metro areas don't have sticker shock," he said. "There are a lot of areas of the country that are appreciating faster than here — Nevada, Arizona, Florida."
Melissa Aagesen, 37, and her husband, Larry Aagesen, 30, lived in Seattle for three years before moving to Chicago last summer. There, they bought a two-bedroom condominium in suburban Evanston, home of Northwestern University, where Larry Aagesen is a physics graduate student. Melissa Aagesen works remotely for Microsoft, among other business clients, and comes back to Seattle frequently.
The couple's search for a two-bedroom condo led to Seattle-like prices, she said, and the only bargains they found were in unsafe areas.
"It's no bargain [in Chicago]," she said, as least compared with Seattle.
In June, Kate Chynoweth, 32, moved to Pittsburgh with her husband, Dave Griffith, also 32. Now she sees Seattle as "really expensive."
Chynoweth and Griffith had hoped to remain in Seattle after Griffith finished medical school at the University of Washington, but his three-year residency required the couple to move.
Once they began house shopping in Pittsburgh, Chynoweth realized that they'd gotten lucky, at least with respect to home prices.
"The housing factor was a huge positive," she said. "We can afford a quality of life here we could never have in Seattle."
The couple paid $210,000 in June for a 1,800-square-foot brick house built in 1930. The three-bedroom house, on a corner lot in a historic neighborhood with cobblestone streets, is a short walk to parks and cafes. In Seattle, she figures, their new home would cost $500,000 in a neighborhood like Columbia City and $600,000 to $700,000 in north Capitol Hill.
Over the five years she and Griffith lived in Seattle, Chynoweth said, prices crept up to unaffordable levels.
In terms of how expensive the West Coast has become, Chynoweth said the Puget Sound-area market is second only to the Bay Area, where the couple met and lived before moving to Seattle.
She and Griffith shopped for a home in Seattle briefly in 2002 but backed off, partly because they didn't like what they could find in their sub-$325,000 price range and because they were uncertain whether they'd have to move because of Griffith's job.
"We didn't find anything that was right," she said of Seattle. "Here [in Pittsburgh] there were hundreds of options."
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