BiggerPockets Seattle/Bellevue! Thoughts about appreciation rate?

[Andres Pico]

What do you think the appreciation rates will look like in this area for the next 3-4 years? Personally I don't think they'll keep going as high as last few years, but who knows. I'm currently considering doing a single-payment PMI on a hold-and-wait property. Not planning to perform home upgrades that increase the property value any time soon. Thoughts?

[Adrian Chu]

Probably not as high as last few years but still an upward trend. Strong economics, lots of high paying jobs. Home prices are a fraction of what they are in the SF Bay Area.  Rent to price ratios are way more favorable here as well.  

It depends how much that one time fee is but when home values go up, it's generally not worth doing a single payment PMI. Chances are you can just refi later when the V in your LTV goes up thru appreciation.

See example for $500,000 purchase price.  

Percent Down	Appreciation Needed to Reach 80 LTV	Home needs to be worth this much
3.50%	20.63%	$603,125.00
5.00%	18.75%	$593,750.00
10.00%	12.50%	$562,500.00
15.00%	6.25%	$531,250.00

Also, when you refinance now, there is a decent chance of getting an appraisal waiver from Fannie Mae or Freddie Mac. 

Sure, there is a risk of interest rates going up.  But if rates stay the same or go down, it's almost the same as paying points right now to lock in a rate.