Is Sequim real estate a good investment now? Is this a good time for retirees to buy Sequim real estate? What does the future hold? In this article I will debug two myths making the rounds.
Sequim Real Estate – Myth No. 1 Now is not a good time to buy a retirement home.
Wrong. Now is a good time to buy a retirement home in the Sequim area. Not just any home, because 95% of the inventory would not be the best investment for the long term. We have homes that are not in premium areas, that have defects, such as architectural obsolescence, outdated heating and circulation systems, excessive moisture, and my favorite, a weird floor plan no one wants. Among the homes that get past these big defects, we still have Sequim real estate that is overpriced, even in this market. None of these homes would make a good investment.
If you drill down to a great house in a great neighborhood, and you negotiate a good price with built in equity right now in this market, which you can do because it is a buyer’s market, you will find some of the best investment real estate you will ever own. If you are planning to retire in Sequim, there will most likely never be a better time than now. But you’ll have to be discerning and wise in your purchase. All of my clients negotiate the best prices and the best terms for homes that are within the 5% category.
Sequim Real Estate – Myth No. 2 Real estate was a good investment in the past, but those days are gone.
Wrong. I believe that the real estate market will be flat for three to five years, and only then will we again begin to see slow appreciation in Sequim real estate. Appreciation will not be the hyper appreciation we saw in some years past, but appreciation at 3% to 5% a year will result in a solid and nice cumulative long term investment over the following decade.
But you don’t have to wait three to five years to gain equity in your investment. For retirees looking at Sequim real estate, if you buy a home as described in the paragraph above in a great area at a great price with built-in equity now, in three to five years you already will have a good start on an appreciating asset that is much more stable than the stock market or other speculative investments. Many of my clients are buying at $20,000 to $50,000 below current fair market value, which instantly creates equity that can grow in the years ahead.
Cash is king, especially in this market, but interest rates are floating around their all-time lows at 4.5% for a 30 year fixed. When you start putting together all the variables that make a good mathematical investment, you find yourself saying that now is a good time to buy the right home in the right location at the right price.
For most retirees, the plan is to buy a home in Sequim and retire here for the long term, perhaps the rest of their lives. Short term appreciation is not a concern, but buying a home at a great price now is. Beyond five years, that home will begin the steady appreciation that real estate has known here for decades. The Olympic Peninsula is not like Phoenix or Las Vegas with millions of homes. We have a small inventory and a relatively small population. The potential for growth here is not only good, but highly probable. Sequim real estate appeals to retirees from all over the country, and that is not about to change. [Read Is a Double Dip Recession on the Horizon]
For a discerning buyer, Sequim real estate is a wise investment now and for the long term.
Last Updated on July 27, 2012 by Chuck Marunde