When you are buying for appreciation, you need to know that is what you are doing and buy appropiately to the objective. I saw a property selling short in Kirkland. It was in the one place that was known to have a problem and the person overpaid for it and it was new.

Problem is that people think they can buy anything it it should appreciate, and that is not the case. Some will appreciate more than others, and you have to purchase wisely. Too many simply buy something that doesn’t need any work and then want it to appreciate regardless.

Rhonda, I can afford no more than $20 k down

Your logic is correct. But all too often people just don’t save it or invest it wisely. So it just doesn’t work that way in reality. But those who bought something first did do better than those who thought they were going to save. Another reason it works is because most people who buy a condo or small home first are young and their income increases by the time they buy the house, moreso than middle aged or older workers.

I don’t know where to get the income stats, but if you just got out of college, I would think maybe your income grows more in the next 8 years than it does after you are working 15 years. That was the case fore me and my husband. He got his master’s degree and switched jobs and tripled his income from the time we bought our starter home, to the time we bought our bigger home. My income doubled during that same period.

Not sure how you factor in the “starting salaries” of young people vs. incremental increases of most older people.

There are a lot of factors involved, many more than an excel spreadsheet will hold. We just know too many people who did this and for whom it worked. Just had a couple who did this. Bought a townhome, lived there for 3 years, took the net proceeds of $100,000 and bought a house. During that time they also finished more higher education and had higher incomes too.

Not sure how to factor in that higher incomes part. Personally I don’t feel secure in that method with new townhomes or new condos. Only ones that can be improved. Small houses even better, but not as doable.

Assuming you are single and have no pet issues, better to rent if you plan to leave Seattle in 2-3 years. Same as knowing you have to sell a stock in 2 years. Don’t buy it if you know you don’t have at least a 5 year timeframe to play with, unless you can afford to lose it.

If you have two big labs and 4 children…renting is not so easy. Better to buy a place than rent.

If you are coming knowing you are leaving…beter to rent if you are talking downtown Seattle. Eastside would be different.

You commented:
“If your rent and mortgage payment are the same, you’re probably better off with the mortgage payment. At least then you’re paying yourself equity (even though it’s small) and you have appreciation.”

The point was that if you buy a starter to gain equity for another purchase you will have to sell at an apreciating market to realize that gain. In an apreciating market your goal home has likely apreciated more than your starter putting your goal further away than when you started. If you do the transaction in a depraciating market you can have a major issue with your mortgage. If you instead invest your own money in a balanced investment portfolio that grows independent on the housing market you can time your purchase of your goal home when the housing market is cool and thereby narrowing the gap. And you can sleep soundly when your investment grows instead of worrying about your mortgage, unexpected income changes or maintenance costs.

would you advise that I get on the equity train now, or just pocket what would be the down payment and the $900 per month delta between my $975 a month and the $1875 a month mortgage/HOA/insurance that I would be paying for a similar place