Comment by kory | Hacker News Reader

Comment by kory | Hacker News Reader

It’s really a challenge.

Do I love my 5br house in Seattle that I pay only $3200 a month for? Yes. Low rates and low prices made that possible for a brief moment in 2020.

Will we be here forever? No… I don’t think I want to raise kids in the city. Everything is densifying and that’s not for me. But as rates continue to rise, the financial cost of moving seems increasingly large. We might be stuck here for the entire mortgage term if prices drop below 2020 prices, which is feasible if rates continue to rise for the next few years. Payment a few thousand a month higher, purchase price a few hundred k lower.

I could always rent it out. I really do want to preserve this old house and it would need to go the right tenant that takes care of it, likely for a below market rent in exchange. However, given how absolutely unfriendly rental laws are in Seattle and how little choice I’ll really have in a tenant as a result, I’m very averse to that. Maybe I’ll just leave it empty once enough time passes for the payment to be inflated away to a negligible amount.

I suspect inventory will stay low for these reasons. People either can’t move, don’t have an incentive to rent out their place, or will rent and not sell to avoid catastrophic losses.

An empty house will turn bad faster than a rented out house. Give it to a property manager for the time it's rented, and when you move back in, do a remodel.

With tenants in the house, you'll be doing regular maintenance anyways, especially at turnover. You might find some damage once in a while and repair it over the years. This is damage you probably wouldn't find if you lived in there yourself, because you wouldn't have the "turnover" event triggering a deep check. But also, you might avoid the damage in the first place, who knows. Overall though, it's minuscule expense in comparison and it's not like the house will be ruined out of it. A decade or two later you'll want to do work on the house anyways before you move back in.

I think renting out is actually a lot better than you'd think. A good property manager will help you find good tenants and save you a whole lot of headache, save you from getting yourself into iffy legal situations, etc.

I don't think wear-and-tear (or even outright damage) from tenants is the big concern. The real danger is someone who truly wrecks your property, doesn't pay rent, in a legal environment where it takes you two years to evict such a person, all the while they might continue to do inflict more damage.

Additional legal protection for renters usually decreases the supply of rentals for this reason, and it's the exact same reason why unemployment rates are higher in countries where employees are very difficult to fire.

Seattle seems to have some affordable pockets now, back when we were in the market in 2018, the townhouse we were in skyrocketed in value and the rent kept going up. We finally bought a place in Renton, which was affordable.

Now it seems that Seattle prices dipped (ignoring Queen Anne) and all the neighboring suburban towns skyrocketed: Carnation is hitting >US$1M? Monroe pushing $700k-$800k? Homes in Kirkland have always been high, but looking at $2M-$3M. Insane. I want a quieter neighborhood for my family, but doesn't look like I can move, ever. I feel trapped in, and if I'm not alone in my situation, inventory will remain low, keeping these prices high and unaffordable.

Prices have rarely fallen even in bad times. It may happen again, but don’t let a loss prevent you from doing what you want.

And likely renting is a hell you don’t want to get into unless you can basically rent to family. Landlords are not loved.

Even if I do retain a profit when selling, we’re going to be trading down to a worse house. Payments for the same house now based on the Redfin estimate and current interest rates are more than double.

Given how bad the tech sector is doing now that the real world is back post lockdowns, I’m not comfortable taking on that much more of a payment.

Yeah, but don’t forget to take in all variables (total cost of ownership as it were) - the mortgage is one factor, taxes, schools, commute all play into it.

Moving to a more expensive monthly payment in a school district where you don’t need to send kids to private school to get a good education can save thousands of dollars, for example.

But I know how it is. I had an underwater house in CA for 10+ years before I could refinance.

The long term value of real estate tends to depend much more on location than interest rate.

A nice middle class suburban house in Detroit bought in 1965 may have seemed like a safe investement. Today it could be worth nothing.

Who knows where the next Detroit will be?

cough san fransi cough

Yup. In Seattle you'll be sent to prison if someone squats in your home while you fail to make them comfortable

So many people are in prison for this.

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