Puget Sound a seller's market? Not for everyone

All the talk about the real estate market these days seems to center around how hard it is for people to buy a new home in the Puget Sound area. Prices are up. Inventory is down.

Real estate website Redfin just reported that nearly one-quarter of homes sold in March were completely paid for in cash. There was also only 1 ½ months of inventory on the market in March. In a buyer's market, the inventory would be 4-to-6 months.

It's a seller's market to be sure. But not all sellers are celebrating. That includes sellers like me.

I bought my one bedroom, 800-square-foot townhome -- what the market calls a condo – in a nice community in Kent in May 2008. The housing market had already fallen quite a bit due to the recession. I thought I was getting in on the ground floor.

That was mistake No. 1.

I should have held out for prices to go down more and bought a two-bedroom place. If I ever decided to sell it, two bedrooms would sell faster than one bedroom. But I had been single for quite a while and, at 35 years old, had pretty much given up on getting married. One bedroom would do me fine.

That was mistake No. 2.

In September 2009, I met the woman who would become my wife.

We started thinking about the future. We thought about kids. We thought about how our one-bedroom condo wasn't going to cut it.

Looking at similar one-bedroom units in our area up for sale, we saw a huge hill ahead of us. They were on the market for less than half of what I paid.

Now, 5 ½ years later, we're married and ready to start a family. That means we're looking to sell.

But, while home prices in Seattle and around Puget Sound are going up, condo prices are not.

The price for single-family residential homes have gone up 19% in Seattle between March 2014 and March of this year, according to the Northwest Multiple Listing Service. Across all of King County, it's up 6.1%. For southwest King County, where I live, it's up 8%.

Prices for Condos in King County are only up 0.07% year-over-year. For Southwest King County, they're down 0.06% at a median price of $111,000.

We're not looking to make a profit. We just want to break even or take a small loss. But after checking in with our realtor a month ago, my wife and I discovered that we're still $24,000 underwater including closing costs.

We're doing a few things to try and add to the value while trying to not spend too much money. New interior paint. New granite countertops in the kitchen and bathroom. A new kitchen sink and faucet. But it's not likely to make enough of a dent for us to put it on the market soon.

We could rent it out, I suppose.

That brings me to mistake No. 3.

This condo is part of a homeowners association. In order for the HOA to stay FHA-approved, no more than 20% of the units may be rented out. We're third on the waiting list to be approved to rent, but the property manager says the people who are renting now have done so for several years and there's no sign of that changing.

So while many buyers are getting frustrated over the lack of places to buy, there are some of us who are frustrated over lack of ability to sell.

Follow Travis Pittman on Twitter @tpittman5


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