My First House: Then and Now

“Cautious Buyer” asks this question on my post the other day when I referenced that my first house had a rate of 11% during the comments:

“Do you think a young couple with similar jobs could buy the same place in Tacoma today? How about 1 year ago today?”


My first house was a rambler in northeast Tacoma.  It’s a 3 bedroom with 1 bathroom and a galley kitchen. 

At barely 1000 square feet, it suited my boyfriend and I just fine.  We liked the 7,500 yard with fruit trees and two car garage with RV parking.  We purchased the home in the summer of 1988 for about $68,000 using minimum down FHA at 11%. 

  • 3% down = $2,040
  • Estimated mortgage payment (PITI) @ 11% = $765

At the time, we were both 21 years old.  I worked at in the title insurance industry as a “home equity title rep” and my boyfriend was a bagger/meat room cleaner for a large grocery store.   Our combined income at that time was about $34,000.

  • 34,000 /12 months = 2,833 monthly gross incomes x 28% = $793.  (We were barely below the recommend “front ratio”).  
  • 2,833 x 43% = 1218 less our mortgage payment of 765 = $453 for maximum allowed monthly debt.  

I didn’t have a company car yet and so I’m sure we were pretty close to using the maximum allowance when we qualified for this mortgage.  Plus, I began receiving offers for credit cards at 18 years old.  I think I was the first girl in school to get a Nordstroms card (I haven’t had a Nordie’s card in YEARS.   I was young and naive when it came to credit.  I managed to pay our bills on time but did learn the hard way…I digress).


Current guestimated value of my first house is around $220,000.  I verified this with ARDELL and it happens to be fairly close to what Zillow is zestimating as well (Zillow is a little higher).   This is assuming it has been updated along with the rest of the neighborhood.

  • 220,000 x 3% down payment = $6,600.  Assuming the seller is paying closing costs.
  • Base loan amount = $213,400 plus upfront mortgage insurance @ 1.75% = $217,134.
  • Interest rate of FHA 30 yr @ 6.500% (apr 7.191% per Friday’s rates) = $1,372.44.  Plus monthly mortgage insurance of 0.55% = 97.81.  2008 taxes = $2525/12 = $210.43.   Total payment (incl. estimated $40 per month home owners insurance) = $1,720.68.

I estimate incomes for both jobs at $67,000.  (I have close sources in both the title and grocery industries).

  • 67,000 /12 = $5,583 gross monthly income.  The total proposed payment of 1,720.68 divided by the monthly gross income = 31%.   This is an acceptable front ratio with FHA. 
  • $5583 x 43% = $2400.69.   2400 less the proposed payment of 1720 =  $680 of allowed monthly debt for FHA in order to stay within a 43% total debt ratio.

It’s been twenty years since I bought my first house.   The house has tripled in value while the incomes for our jobs have pretty much doubled.  I commuted 27 miles one way each day (not even factoring when I made calls on accounts, which at that time my territory was banks and credit unions in King County)…I was thankful once I was promoted to a real “title rep” and had a company car to clunk the miles onto instead of my personal one.  

The answer to your question, Cautious Buyer, is:  YES.  Someone could buy that home today with the same jobs that we had when we purchased it.  Last year’s value?  Since it’s in NE Tacoma, I would say that it hasn’t experienced the same degree of “appreciation” as the Seattle/Bellevue markets did.   According to Zillow, the home is worth 0.9% more now than a year ago and 0.4% less in the last 30 days…so we’re splitting hairs.  

What I wonder is how many first time home buyers would be willing to commute like I did or to buy a true starter home? 

Our agent for our first home did select our loan officer.  As I mentioned, we were 21 and were totally green.  Even though I had worked for a title company for a few years, it’s completely different to actually go through the process.  With our subsequent home purchases, we selected our loan officer first and then the home.

By the way, we did sell that house one year later.  There was a bit of a housing panic (at least I had one at the time) and we sold it for $90,000.  The proceeds was the down payment on our next home located in Federal Way’s “Affordable Street of Dreams“.  Yes, that’s how the new plat was marketed.  Affordable dreams (our “affordable dream” was $125k for 1500 square feet in 1990).   We were able to move just a little closer to family and jobs (and continued to do so with the next home we purchased together).   This photo is from our second home in Madrona Meadows.   We lived in my grandparent-in-laws (we were married at this point) basement for a few months until this home was finished since our first home sold in days with back up offers.

Improving Online Home Valuations?

This past week, Top Producer quietly rolled out a home valuation tool, called HomeInsight, for a few markets in California and Washington*. I was not part of developing the tool, but I like it enough to pass along the link to Rain City Guide readers before the local media picks it up.

What differentiates this product from others is that it not only includes sold data, but also real-time listing data. The result is a page of information for each home that includes:

  • an interactive map that gives details on ten similar nearby homes (5 that are for sale and 5 that have sold) and
  • dynamic charts that give the average/high/low listing price, the average/high/low selling time and the average difference between asking and selling price for the neighborhood of interest.


However, as with all things that sound too good to be true, there is a catch. In order to pull live listing information, the servers pulling this data have to go through an agent’s connection with their local MLS. (Don’t ask me to explain why, and definitely don’t ask Robbie, but anyone reading RCG for a while knows that the MLS’ have rules!) The result is it takes 5 to 15 minutes for the request to go to the local Realtor’s Top Producer account and then for the Realtor to initiate a report that pulls the data off the MLS servers (yes, a server call to the local MLS is necessary each and every time a request for a snapshot is made). Consequently, the only way to get your snapshop is from a link sent via email about 10 minutes after you complete the form.

So, how do you get a market snapshot for your home? Simply go to HomeInsight and fill in the required fields. (Remember it is only available in a few places right now!*)

If you don’t want to fill in the form, live in another part of the country, or feel guilty about sending people like Jim Reppond a “false” lead, then you can also check out this dummy snapshot filled with made up data.

And as much as I hate disclaimers, it is important to note that these are my opinions and my currently employer is not responsible for what I write on Rain City Guide.

* This tool is currently only available in parts of California (Hemet, Huntington Beach, Laguna Niguel, Long Beach, Los Angeles, Mission Viejo and Norwalk) and Washington (Bellevue/Eastside, Bremerton, Everett, Federal Way, Greater Seattle, Puyallup and Tacoma)