I’ve been looking for a two bedroom to rent or buy in Belltown for the last couple months and I’ve noticed that rents have steadily been climbing. I’d guess that most buildings in Belltown have raised their prices about five hundred dollars per month. Even a lot of the less desirable buildings seem to be flush with demand and have jacked up their rates in a new found confidence.
Considering how the rental rates have steadily climbed, I’ve been doing some comparative analysis between renting vs buying. I came across this listing at the Parc on Western. It’s an awesome little condo, but check out the troubled sales history;
|Jan 21, 2011||Price Changed||$475,000||—||NWMLS #144825|
|Dec 09, 2010||Price Changed||$525,000||—||NWMLS #144825|
|Oct 19, 2010||Listed (Active)||$599,000||—||NWMLS #144825|
|May 29, 2009||Delisted||—||—||Inactive NWMLS #1|
|Mar 14, 2009||Listed||*||—||Inactive NWMLS #1|
|Feb 11, 2008||Sold (Public Records)||$759,000||—||Public Records|
Unbelievable right? Bought in 2008 for $759k and now on the market for $475k? That’s nearly a 40% drop in value – blows my mind.
The NYT created a useful rent vs. buy calculator where you can plug in scenarios to determine, from a financial perspective, the wisest decision. Let us assume, for the sake of example, that the hemorrhage in property values has completely stopped and home prices are optimistically holding steady. Lets also be aggressive and say that rents are going to increase 4% a year.
Unreal to see that it would take 14 years for buying to be a better financial move than renting isn’t it? Of course, a lot of variables go into this decision besides money – but I think it’s safe to say that the allure of the “American” dream of home ownership might be a costly decision for the next couple of years.
Tough times, tough decisions.