[photopress:riley_in_SF.jpg,thumb,alignright]I just thought I would try to put the high prices of the Seattle market in perspective based on a story from a friend of mine from the Bay Area…
This friend (and his wife) moved from Texas to the Bay Area about four years ago. They began by renting, but really wanted to buy a home. After about a year, they were able to buy a home, but they had to move out about an hour away from San Francisco because it was the only way they afford a home due to the ridiculously high prices. Back then (four years ago), the talk of the town from turning from the recent dot-com bust to a coming real estate bust. Well, they purchased a 1,400 sf home in Bay Point (right outside of Pittsburg) for around $310K.
Fast forward to three years later… They are ready to move back to Dallas to be closer to their family. They put their home on the market and receive multiple offers, the best offer at $530K. Take out real estate fees and what-not, and they are poised to make almost $200K in less than three years… In addition, they’ve also bought a home in Dallas for $250K which means that they can use their profits to either lower their mortgage to near nothing, or have a lot of money in the bank to invest.
This young family (both are under 30) has a leg-up for life thanks to one good investment decision. They bought a house.
Of course, it is unlikely that home prices in other places (like Seattle) will continue to see the same time of appreciation, but as the article from the Seattle Times suggests, the lack of housing supply in Seattle is probably going to be around for a long time to come.