High rents prompt renters to become homeowners

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by JOE FRYER / KING 5 News

KING5.com

Posted on November 27, 2012 at 11:56 PM

Updated Wednesday, Nov 28 at 6:47 AM

SEATTLE – The increasing cost of renting an apartment in Seattle is prompting more people to consider home ownership.

After renting for seven years, Michael Jouver got sick of increasing rents and decided to buy a place in Capitol Hill this summer. 

“Every month I was just watching that $800 to $900 disappear,” he said.  “So now at least I know this is doing somewhere that will benefit me in the future.”

His monthly mortgage payment is only slightly more than what he paid for rent at his last place, yet his new home is two to three times bigger than the studio he used to lease. 

Plus, he is earning equity, hopes to get money back on his taxes and finally has his own dishwasher. 

“I can see myself staying here for 10 years or more,” Jouver said. 

His realtors, Team Diva Real Estate on Capitol Hill, said at least 50 percent of their first-time buyers have decided to purchase because rents were too high. 

Apartment construction slowed during the recession, which means demand today is high, but supply is low, prompting higher rents.  In Capitol Hill, the real-estate service Zillow said rents are up about 15 percent in the last year; the median rent in that neighborhood is now $1500.

First Hill saw a 10.7 percent rent hike in the past year, according to Zillow.  Rents are also going up in Queen Anne and South Lake Union. 

Jane Hodges, who wrote the book “Rent vs. Buy,” said buying might be a good option for many renters frustrated by high rents, but it is not for everyone. 

She does not recommend ownership for people who are not able to put down much money or put a lot of money toward paying down the mortgage, earning equity.  She also only recommends ownership for people who plan to spend some time in the home – perhaps five years or more. 

Hodges also reminds potential homebuyers that the costs go well beyond the mortgage.  Maintenance costs – including association dues for condo buildings – can quickly add up.

“I just think a lot of people aren’t aware until they’re already owners what the true expenses can be,” she said. 

Jouver, who plans to spend a decade or more in his new home, believes ownership was the perfect choice for him.

“I don’t anticipate there ever being a downfall,” he said.

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