Can You Afford A Home In Today’s Market?

Even though I keep reading that the economy is getting better, how are things going in your neighborhood?

When I talk to my brother in Florida, he thinks we still have a long road ahead of us before things have fully turned around.

Can You Afford A Home in Today's Market?
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When I tell him how great things are going where I live, it’s a complete 180. How is that possible?

When I left Florida almost two years ago, the economy was still in bad shape. There was a high rate of unemployment and jobs hadn’t returned. There were still numerous foreclosures on the market and the value of homes had dropped considerably thank to the recession.

When I moved to Seattle, I was completely astounded. The economy was thriving, new construction was happening all over the city and homes were climbing in value.

What is even more shocking is that Seattle is still exploding for job growth and the economy is still showing no signs of slowing down.


What’s for sale in my neighborhood?

I live in a mixed housing neighborhood full of apartments, houses and townhouses. It’s a 15 minute drive from downtown Seattle and is a thriving little community full of restaurants and bars, shops, a movie theatre, parks and the beach.

Every day when I walk my dogs through my ‘hood, I pass an occasional For Sale sign. To be honest, For Sale signs are few and far between, so it’s always surprising to see one in somebody’s yard. Since I’m nosy curious, I read flyer the flyer to see what the townhouse was all about.

Well my eyes about popped out of my head when I saw the townhouse was a 2/2, 1300 square feet….and listed at $518,000. For this price, you get to share your home with three other townhouses on the same lot and have a patio; no yard included.

As I continued my walk, I had an entire conversation in my head.

  • Are homes really that expensive? But it’s so tiny!
  • There’s no garage? I have to park on the street after shelling out over $500,000?!
  • I have to share a wall with my neighbors! But what if the walls are thin? 

While I know I live in a hot market – rentals aren’t cheap either – I was pretty surprised about how much homes are going for these days.

Unless you are moving into a large apartment complex, home and condo rentals are pretty much non-existent. I’m pretty sure people keep moving here, but no one is leaving.

After doing a quick real estate check, I found less than 30 homes for sale in my zip code.

Can you afford a home?Here are a few statistics about my neighborhood per Redfin

Average price:

1 bedroom: $353K

2 bedroom: $599K

3 bedroom: $610K

4+ bedroom: $973K

Apartment Rent: $1,826

So who can afford these home prices?

Pretty much anyone and everyone in the tech industry.

My housing situation

My brother and I have had long talks about the home we currently own and what we want to do with it.

We purchased the home back in 2004 and my brother currently lives there with a roommate. Fortunately we purchased our home before the bubble, but our neighborhood still has foreclosures in it which is lowering the value of our home.

Bottom line is we have no plans on selling it in the near future. Most likely, the home will become a rental if my brother ever moves out and we’ll become slumlords landlords.

Can I afford a home in today’s market?

While our Florida home was an affordable purchase at $130,000 (this was back when I was only 23!), there is absolutely no chance I would ever be able to purchase a home where I presently live based on my salary.

Housing continues to raise in price and there is no signs of leveling out or slowing down. I cannot afford a home in my market and the thought of purchasing an apartment is ridiculous. For now, it looks like I will continue to rent!

Related reading:

Depending on where you live, can you afford a home in today’s market? Has housing recovered or is it out of your reach?

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  1. I live in Florida right now and the rents for a nice sized one bedroom are just about the same as the monthly payment for a 3 bedroom home. After living here for a year I’ve decided to buy. If I still lived in NC, where I’m from, I’d probably rent for another year or two because I was able to rent a nice 2 bed/2 bath condo in a desirable neighborhood for less than $1000.

    1. Florida has always had great prices, which is something I notice now that I no longer live there. I have a house there (it’s rented out) and it’s a steal compared to almost anywhere else. How exciting you are buying!!

  2. Definitely a big difference in housing prices across the country. You can buy nice homes that need a little updating for around $80k pretty consistently in our home town. But there aren’t a ton of high income jobs.

    1. Oh wow! That seems to be a theme – high income, high cost of living and expensive homes or vice versa. I’d love to find a place in the middle!

  3. Yep, if we had stayed in Seattle Tim and I couldn’t have afforded a house. Granted, your neighborhood’s prices are bound to be insane if it’s that close to downtown. (I’m guessing Broadway or Queen Anne.)

    But I remember that 15+ years ago the price for a 2/2 up near the northern city limits was around $200k. Can’t imagine what it is now.

    Thriving cities will always be expensive. The bubble burst probably just made prices less insane, but that was awhile ago. Things creep back up. Even here in Phoenix.

    Our house appreciated around $40k in 3 years and that’s when we had a major cosmetic issue. I imagine it’s worth another $3-4k now that the glaring issue is fixed.

    1. Hey! I’m up in Ballard, which is somehow costing more than apartments downtown, which is crazy. Wow, the appreciation in just 3 years is pretty amazing! That’s a huge increase in equity, yippee!

  4. Yup, it’s the tech boom for you.

    If I stayed in the town where I am now, I could buy a house for $60,000-$100,000 — really! And the $100000 house would be big. (Both would probably need work, because almost every place here needs work.) The only thing holding me back from buying is the currently temporary nature of my work. But, it’s also pretty likely that I’ll move on at some point, and most likely it would be to Chicago, LA, DC, or Philadelphia, all of which are really expensive and likely to remain out of my price range basically forever.

    1. Oh wow, those are incredible prices! I have a hard time committing to purchasing a home – I’m not ready to put roots in Seattle, so it’s probably best that I’m priced out anyway 🙂 Where do you think you will move to?!

  5. Wow! My gut reaction is always to lament the cost, but the economist in me smiles to see the law of supply and demand working in those areas. It’s a bummer that people that might want to live in your area can’t, but at least the good news is that there are a gazillion other affordable areas in the U.S.

    1. There is definitely a shortage in housing, so it’s a great time to be a seller in Seattle!

  6. I live near Chonce in Chicagoland and it is really pretty expensive around here. It’s hard to find anything truly affordable in a thriving neighborhood. That being said, we live in a great town because we bought in 2012 when rates and prices were still incredibly low. We recently got our house appraised to refinance and it went up $65,000 in value since we purchased. We wouldn’t even be able to afford our current home if we were buying right now! It’s a good thing for when we sell, but we’d be in trouble if we were looking to only buy right now.

    1. I didn’t know you guys lived near each other! Oh wow, that’s a huge increase in only a few years, good for you! It seems like you are in a good part of town if your home is going up so much in value.

  7. Wow at the housing prices in your neighborhood in Seattle! We haven’t even tried to look into home prices here, so I don’t know the exact figures. But I know rents are crazy expensive for even rather small apartments, and I have heard that home prices in the area are astronomical. Houses are constructed a bit differently, and the materials are costly, though I’m sure there are other factors. Apparently a considerably smaller portion of the Swiss population own homes, particularly in cities, where it seems like almost everyone rents.

    1. I would love to hear more about this – I am always curious how affordable (or not affordable) it is to live overseas. Do most people prefer to rent or would they rather own their home in Switzerland?

  8. Gosh those prices are nuts. I think most people recognize the fact that we are likely seeing another bubble due to prolonged low interest rates. I think prices will dip back down within the next few years, assuming the Fed raises rates. And that’s a big “if.”

    1. I have no idea what to expect. I hope prices will start to level out here, but with more and more tech companies coming to this area, who knows!

  9. It’s so location-specific. Seattle is definitely a super hot market, because of the Amazon boom, so that’s keeping you priced out. Some places are just like that. But most of the country is much more affordable! We left a super pricy city for a smaller town which is still expensive, but where we were comfortable paying the price for a house. Thankfully, though, we bought four years ago when the market was low — now it’s not nearly back to the peak, but it’s for sure heating up again!

    1. Amazon, Expedia, Microsoft…it’s crazy! I definitely won’t be here for the long term and will probably do something similar to you – move to a smaller town that has the right size house for the right kind of house. I don’t mind paying for a home, but just can’t justify these prices!

  10. Wow those are crazy high prices! I definitely can’t afford that either currently. Illinois has high housing prices but luckily some suburbs have reasonably priced homes as well. I think the closer to Chicago you are, the more expensive housing is. If I stay in this state and choose to buy I’d be looking for a 3-4 bedroom home around $200K or less which is very possible.

    1. I’ve heard Chicago is so expensive! $200K seems much more realistic for a family home. Do you think you will stay in the area?

      1. I would never try to buy in the actual city of Chicago. But the suburbs are pretty cheap the further you get away from the city and I’m about 45 minutes away. Sometimes I play around with the idea of moving but I’m sure I’d miss my family wayyyy to much.

        1. Family is so important! You are so lucky to be near them!

  11. I see you live in Ballard? That was the last place I lived before I moved to LA in 2003. Ballard was just up and coming then (I lived across the street from the locks and LOVED it), but when I went back to visit a couple years ago, I could not believe my eyes and how built up the whole area got, and all the traffic. And how “South Lake Union” was now a neighborhood instead of shady warehouses. Yes, Seattle was once sleepy but got really really expensive. My apt there was $750. I doubt I could get that anymore. And to answer your question, I live in LA, so I’m not even close to affording a home here. 🙂

    1. Ballard is outta control! I signed a 1 year lease and have already been warned they are raising the rent price if I renew…so that’s something to stress about. My brother has started thinking about purchasing a home in LA and it’s nuts. The downpayment alone would be ridiculous!

  12. I live in Central Indiana and housing is cheap here. Our 4-bedroom house with 2,000ish square feet was only 187K. We did spend around $12,000 remodeling it.

    1. Wow, that’s unreal! I don’t even know what I would do in a home that big lol.

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