It’s one of those statistics that inspires all sorts of fun fantasies, but ultimately promises more than it delivers. Seattle real estate can be more complex than simply pocketing your home’s rising value.
According to a report released by Zillow on Monday, home values in about half the country’s larger cities are appreciating at a rate per hour that’s actually higher than the local hourly minimum wage. In Seattle, the difference is even more pronounced. Seattle homeowners are gaining $54.24 of equity per hour, 3.5 times the minimum wage of $15 an hour. Though it’s not necessarily a contest any city’s looking to win, this places Seattle third in the country behind San Francisco at $60.13 and San Jose at $99.81.
“In 2009 I came home from work and my neighbor across the street – I won’t say his name – said, ‘Why’d you bother going to work today? Your house made more money than you did,'” KIRO Radio’s John Curley said.
“And then they just left the house,” he said. “They couldn’t afford it anymore. They put the keys on the table, they stole the dishwasher, and the refrigerator, and the washer and dryer, and left.”
Equity vs salary
Not every city is seeing such stark contrasts, however. In Portland, homeowners are gaining just $1.29 per hour in home equity, which lags far behind the $11.25 minimum wage.
It’s difficult not to fantasize about abandoning the cubicle life and simply putting your feet up at home, earning with your house doing all the work for you. The commute would certainly be much better. But if the life of the hypothetical stay-at-homeowner sounds a little too good to be true, that’s because it is.
Equity earnings are not at all like a salary that regularly gets deposited in an account. They are only available once a homeowner sells. It’s probably best to keep the cubicle. Taking advantage of these potential gains requires a long-term investment, and even then, the sale would be subject to numerous taxes, fees, and expenses, not to mention losing the very thing that was earning for you in the first place.
Seattle real estate and renters
The news is also not necessarily positive for those who haven’t purchased a home. Seattle saw rent prices grow 13.5 percent in 2017 according to an analysis by ABODO, an apartment rental site. Housing prices continue to rise as well, with Northwest Multiple Listing Service reporting a jump in median price to $777,000, up $20,000 from the January record.
With that in mind, Zillow noted that the uptick is nonetheless beneficial for homeowners, “particularly for homeowners that have already or are very close to paying off a mortgage, this supplemental “income” – especially if allowed to accumulate over several years – can essentially serve as a kind of second job that pays directly to a homeowner’s bottom line.”