About three months ago a property I liked sold for a price I thought was fair. It was completely redone from the studs out. Everything was new, and the finishes were to the period of the house. I was told in an online chat that the property was way over priced.
During my market analysis it did seem that the price was reasonable, but for that price you could get more from comparable properties, like a view.
Since then I have spent much more time looking at property. What I am finding is that sales prices are all over the map. If it were just up to sales data everything would be over priced, and it starts in the lower tiers of pricing, and works it’s way up.
The other thing that has thrown the value of property is that low interest rates make CAP Rates, or rental income rates, seem higher than they should be. What a property will rent for used to indicate a rate of return. If a property is losing value while the rental income is paying a fixed mortgage, you would have to count those losses into the equation.
I don’t see a formula, or pattern yet, for getting to a fair purchase price. It only seems to me that 1998 may have been where we end up for today’s residential Real Estate prices.
About David Losh
In 1984 I got my Real Estate license and worked in a small company called Advance Properties. The owner was extremely interested in Real Estate, building, and land development. Most of his work was concentrated North of Seattle. Since the 1970s I had worked for Real Estate agents in Seattle as a contractor, mostly preparing properties for rent, and sale.
After a few years my skill level increased considerably concerning land use, building code, and development practices. Escrow, and lending offices were housed at the Advance Properties building so it was easy to get involved in all aspects of Real Estate. It was very much a family owned, and operated business.
Over the years my Real Estate license has been at a variety of Real Estate companies, and offices. Nothing compares to those early years, or that sense of family. Real Estate has gotten to be corporate owned.
My hope with this blog is to share with you some of the things I've learned. If you have Real Estate needs, or want contractor help, I refer freely to what best suits you. If you should choose to work with me you'll find a great resource.
My Real Estate license is at Skyline Properties in Northgate. Skyline is a locally owned company that is a desk fee office. There is a wide variety of diverse agents. It helps me with some of the other projects that I have, and mentoring that I do, to be able to work with people from other cultures.
Here in Seattle we are close to Vancouver BC and are the gateway to China. Boeing has a great trade relationship with China, as does Microsoft have with all of Asia. We are a culturally diverse community, and it helps me to be invlolved.
