My 2 cents as somebody who has lived in Seattle for a long time, owns my own non RE business and has had many adventures in the business world, has read WAY too much about business/economics in general over decades, and has lots of paper knowledge about RE, but is admittedly lacking in a ton of real world experience in that sphere... Also I'm a math/fundamentals always wins in the end kinda guy...
Seattle is close to the peak, if not past it already. Every time a bull market comes along people start thinking it will never end. Forget fundamentals, this thing is going to the moon! Every. Single. Time.
Yet it always does, because math says IT MUST. And math is correct, not the irrationally exuberant types. Look at the fundamentals that drive RE prices. Boring things like average purchase price to average income in an area ratios being one of the most stable and time tested. 5-6x income = average sale price is long term sustainable. Below that you should be buying! And above that it is overpriced, if not in an outright bubble. Seattle area was at 9ish before it cooled off in this last year... If the bubble isn't already in bursting mode, the reality is there is not much upside.
Even if it goes back to running up for another year or two, in 3 or 4 years that just means it will have to fall that much more (or go flat for longer) to get in line with sustainable math. Don't think fundies apply to world class cities? That's an argument people make... But they do. The above has held true for NYC, LA, London, you name it. They always fall into that range during corrections, before running back up again eventually. That's just one benchmark, but we're borked on all of them.
In short, buying now IS NOT buying in 2012. It is buying in 2007, or MAYBE 2004/2005 if you're lucky. There is simply no upside left in THIS cycle. Personally I think Seattle has long term, as in 30-50 years from now, upside. But in the short to mid term, there's not going to be muc/any appreciation, more likely it will drop. We're overdue for a recession at the national level, all fundamentals say Seattle (and many other trendy markets) are waaay overpriced, and you run negative cash flow. Where's the upside?
Again 2019 is not 2012. Which is why I plan to look into the Spokane market, where the RE values are not as over inflated compared to what fundamentals say is solid, RE positively cash flows, and there seems to be a lot more upside potential as that city is turning and seems to be on a good trajectory long term. Buying in Seattle area in 2019 is like buying into a record high stock market... All that means is most of the gains have already happened!
So I would look elsewhere. Whether that is Spokane, or even somewhere just slightly better math wise and in the Seattle area, like Everett, Tacoma, etc. If you buy now you'll be fine in 30 years. I'm almost positive about that. But it probably won't do as well at this part of the cycle as investing somewhere with more upside left in it.
Also, because it drives me nuts when people say this... The people above saying "Appreciation! Forget cash flow! Who wants a few hundred a month in your pocket when you can gain $50K a year!" You should read more... Multiple massive studies have been done that showed that overall returns in RE in "boring" cash flow markets, like the midwest or south, have averaged IDENTICAL returns to "hip" places over multiple decades.
Why? Because the hip places have huge run ups... And busts. The cash flow markets just chug along at a little above inflation rate. You also cannot double down on buying more properties as fast most of the time, as you're limited by the negative cash flow you can sustain. You're in the toilet during down markets as you lose your paper equity and cannot tap into the value, vs being able to continue to buy during market lows in cash flow markets. Hence, at the end of the day, the returns end up being within a fraction of a percent of each other. This is a fact, as proved by multiple studies, not to mention the opinion most big time experienced RE guys have. Google the studies, it's interesting stuff.
The thing is, your "risk adjusted" returns in cash flow markets are really better... Smaller/no booms and busts, AKA more stable. You put money in your pocket every month, hence almost never have to sell at the bottom of a market. If you have a job to support negative cash flow, losing it can tank you, not so with positive cash flow properties. In other words it's safer and more predictable, but you make the same returns. I know which one of those options appeals to me. The only caveat to this is if you're going to time the markets, and buy into trendy cities when there is a clear depression in prices, like the last recession. Seattle may be a good play in 2021 or something during the middle of our next recession, but not so much when it's still basically at its all time peak. In cash flow markets it ALMOST doesn't even matter where in the cycle it is.
Note: I'm not saying anybody can perfectly time the market... But I do feel it gets to be a little obvious at the extremes, like the lows of the recession, or the highs we're seeing now. You can't predict the exact movements or timing, but I would say 100% for sure we're CLOSE to the top in trendy cities, if not at/past it. We're surely not at the beginning of a massive run up anyway!
Okay, that was about $100.02, not 2 cents... But I hope some of that makes sense. Seriously though, google the studies on return rates, and also benchmarks used for RE. You will see what I say above is true, and buying at an obvious peak is probably not going to be that awesome. Yes, you'll make money over 30 years, but not as much as buying at an obvious low, or buying in a stable cash flow market.
