Business analyst offers warning over Seattle housing ‘market euphoria’
The Seattle housing market is competitive. Extremely competitive.
While the demand for Seattle housing is high, the supply is extremely low, which has been a primary driver in skyrocketing prices. Anxiety in the market has led to some risky moves by bidders eager to jump out of the equally expensive rental market.
One of those moves includes a willingness to sweeten the pot by skipping a home inspection in order to jump in front of the other bidders. CBS senior business analyst Jill Schlesinger told KIRO Radio’s Dave Ross that move is playing with fire.
“Yeah, I would never do that, especially because my brother in law is a civil engineer and he would be killing me,” she said.
Schlesinger’s website Jillonmoney.com lists the home inspection as a number of must do’s when buying a home, but is such advice is realistic when the real-estate market is so cutthroat?
Seattle-based real estate company Zillow predicts the Seattle metropolitan area will be the No. 2 hottest housing market in the U.S. this year. Real estate experts have predicted another hot King County housing market in 2017, but that home values will appreciate at a slightly slower pace.
Schlesinger said you have to be willing to let go of your dream home in the current real-estate climate.
“Do you want to buy a problem? That’s my question to you,” she said. “Without a home inspection, you are flying blind. Do you want to get into an airplane where the pilot’s like, ‘You know what, we’ve got 30 steps to check through here but we’re really late, let’s just go.’ Do you feel good about that? I don’t.
“My mother’s been a realtor for many years, OK. Hot markets, down markets, and her favorite line is: A house is like a man. There’s more than one for you in the world. You’re going to have to be patient.”
Seattle is also not the country’s only scorching housing market and Schlesinger said buying in at all costs begs for a major regret later on.
“What I’m telling you is those are the times when you look back and you say, ‘It was just 10 years ago where people were losing their minds — they did things like that,” she said. “And did that work out for them? For some of them, sure. For others, no. So you know what, if it means you have to walk away, then walk away.
“You could find out that that house is structurally unsafe. Do you want that? … It’s all yours to fix afterward. You want to have a contingency of having like 100-grand floating around in the background to fix a problem that could occur? Because that’s what you might need.”
Why are banks financing homes that aren’t being inspected? Schlesinger said that they usually won’t do that.
“Maybe they will out there (in Seattle), but that’s very rare, very rare,” she said. “If you need a mortgage and those are parts of your process, boy, you better get on it. Because in a competitive market, what I think is most important is that people have their I’s dotted and T’s crossed. And what does that mean? It means you do everything you can in your power but you do not fall into this huge bucket of risk of getting swept up into a market euphoria and doing something dopey that you can’t undo later. This is so important. I know you feel like, Oh my God I have to get into a house. But have you actually run the numbers to see what it means to actually rent for a while? Maybe it’s better for you.”