To rent or to buy? That is the question when it comes to deciding where to live. We asked Eastside real estate experts to weigh in on the issue. Here is what they had to say:
How do you know when you are ready to buy?
The best time to buy is when your goal of homeownership or investment coincides with the opportunity to purchase. These goals are very situational and varied. For most people, it has to do with a combination of their lifestyle and economic factors. For example, the changing needs of their family, desire to lay down roots in a community, or commute times. Buyers should use a basic risk-benefit analysis that takes into account the potential for rising rents versus a fixed payment with a purchase, and the potential to build equity. This analysis should also include appreciation rates and approximate amount of time you’re planning to stay in the home. — Julia Nordby, office leader at John L. Scott Real Estate, Bellevue Main
How long will they stay in the house?
Buying tends to be better spread out over many years. If they are going to be relocating in a year or two, probably not the best bet to buy since there are upfront costs to homeownership as well as closing costs when selling. Do they have enough money for a down payment? How much more will their monthly payment be versus their rental payment? Property taxes, mortgage interest, insurance, and maintenance need to be factored in. What is their credit score? That will determine how good their interest rate and amount of down payment will be. Rental rates went up, on average, 10 percent last year, while housing values on the Eastside rose 14 percent in value. — Rick Franz, managing broker at Windermere Real Estate, Bellevue South
What about the down payment?
The gold standard for down payment has always been 20 percent. The Eastside is in a very competitive sellers’ market, so things like down payment definitely come into play. The more down payment, the more attractive your offer. With that said, there are some great low down payment options available right now through FHA and VA. I never discourage someone with less than 20 percent from entering the market. — Nordby
If the core Eastside cities are too expensive, where else should people look to buy?
Start by considering how far of a commute you would be willing to accept, and work your way out based on commute time vs. actual distance. It is always wise to stick within close proximity to mass transit options or freeway access. — Nordby
Renton is a good neighbor to the south — really still the Eastside price point — $427,975. Farther south to Kent or Maple Valley (is) $360,000. Heading up to Mill Creek/Everett $406,445, and out to Monroe, $360,500. The townhome or condominium market also may be more affordable alternatives to purchasing a single-family home on the Eastside. — Franz
Bothell and Renton are two Eastside communities that we are starting to see gain buyer traction because the homes are more affordable than their neighboring cities of Bellevue, Issaquah, Redmond, and Kirkland. — Brenda Nunes, managing broker at KW Nunes Group, Keller Williams Eastside
When is it best to rent?
Conventional real estate advice has always said that you should rent when you’re unlikely to stay put for several years (three to five). However, for the Eastside, we’ve seen enough appreciation year over year to turn that wisdom on its head. I would say it’s better to rent when a purchase would create a financial hardship or if you’re highly averse to risk. — Nordby
Certainly if one is not likely to stay in their home for two to three years, or if they need to save more, or they need to clean up their credit. — Franz
If you can afford it and have the credit, do it (buy)! Talk to a mortgage professional, and learn what steps you need to take to be ready to buy a home. If necessary, take action to repair credit. Make a conscious effort to do so, as good credit will help purchase a home, and help with other aspects of your life, too. — Nunes
Headshots: by Yuen Lui, by Common Thread Creative, by Kristi Waite Photos