Is it worth to buy a house in Seattle?
Short answer: no
Given a 30 years timeframe in Seattle it's better to be renting . To understand why, let's take a look at some of the factors.
Warning: these numbers are averages across the whole Seattle market. Individual cases can differ significantly so it's advised to make your own calculation.
- Avarage rent price in Seattle is 2,630.00
- Avarage home price is 755,613.00.
Tax and maintenance
Currently the property tax in Seattle is 0.96%. This means that every year you spend an extra 11,700.44 if you buy a house.
Further maintenance cost occurs when you own a house which add to the years cost as well. We tend to calculate with 1% of the value of the house / year. This usually gives a good enough estimate on long term.
Although renting won't build equity (ownership on the house) for you but many times you can save significant money which builds up quickly and using it properly can yield more over the years. Looking at Seattle this would be roughly 808,420.99 in total.
Putting this all together
When we decide if renting or buying would be more beneficial there are two main numbers we need to consider.
Total equity owned
Simply put this is how much you own. In case of buying this would be the value of the house at the end of the mortgage period. In case of renting this is how much you saved up during the same time and how much it yielded if it was invested.
This is the harder concept but we can think of it as how much it costed us to build that ownership. Talking about buying, this would be the sum of mortgage interest, tax and maintenance. In renting scenario it's just the total of the monthly rent price over the hypothetical period.
While common wisdom says it's always better to buy, in such a case like the average Seattle real estate market at its current state you can build up more equity by time by renting a home instead of buying.
To be more specific you can "earn" more than 2.9 times by renting for the 89% of cost of owning a house.
Do you want to learn more? We have the full calculations, graphs and more on the detailed calculation page.