If I have your snail mail address, you may get my November update soon. The theme is money in the Seattle housing market. While taking one last look before sending it to the printer, I couldn’t help noticing that the 11.46% annualized return offered by Pyatt Broadmark (in the “flippers” column below) is much higher than the average home sales ROI (65% over a 10.2-year average holding period). According to the Seattle Times, that’s the highest profit in the US next to San Francisco and San Jose.
Of course “average” does not describe everyone’s experience. 10.2 years ago, the housing market was awful. Many sellers who bought their homes in more recent years enjoyed far higher returns within much shorter time frames. But as Pyatt Broadmark says in their prospectus, past performance doesn’t guarantee future ROI, “which may be affected by changes in market or economic conditions and in legal, regulatory and tax requirements”. So it is with house purchases.
For instance, both the House and Senate have proposed lengthening the residency requirement from 2 out of 5 years to 5 out of 8 before the first $250,000 ($500,000 for couples) of home sale profits are tax exempt. The Wall Street Journal suggests that “affected home sellers should complete sales before year-end.” As if it were that easy!