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How can I build real estate equity in a tight market?


Seattle (and Portland), this one’s for you.

It’s no great secret that the Seattle real estate market remains one of the hottest in the country. While lack of inventory and low mortgage rates have led to a competitive marketplace throughout the nation, especially for first-time buyers, things are even more brutal here in Puget Sound. 

How aggressive is the area’s home-buying environment? This spring, Seattle held the top spot for home price growth in the nation for the seventh straight month, resulting in the highest rate of bidding wars for would-be buyers. 

House hunters are feeling the crunch. Real estate company Redfin found that 90% of houses for sale in Seattle over the last two months wound up in a bidding war. That’s the most since records began at the start of this decade. ( Information courtesy of Seattle Times.)

While perspectives vary greatly as to why there’s such a housing crunch (likely due to the lack of single-family homes and an influx of well-qualified buyers) and what, if anything, should be done about it (More affordable housing? More micro apartments? More regulation?), the fact remains that buying a piece of real estate is still one of the best ways for many people to build wealth and grow equity. 

But in a market where 20% of all homes are purchased in cash and the average home price is over $720,000, what’s a first-time or lower-income buyer to do? We’re so glad you asked…

Think outside your box.

If you’re unsure as to whether your 15 or 20-year plan involves you staying in the tight real estate market, then you may want to consider purchasing an investment property or lot in another area where the market is less competitive.

Photo of a lot of land for sale

Financing for non-primary residencies is typically structured differently than owner-occupied, so, as always, be sure you do your research in order to determine if owning a lot or rental home in a different city is right for your situation.

 If you’re thinking about an investment property, one of our local loan officers will be happy to walk you through some financing options.

Stay put.

If you’re a current homeowner, then it may be a better value for you to stay in your current home, and update or remodel the aspects of your existing house that are prompting you to want to move – versus entering in the housing market.

Photo of a couple remodeling their house

Instead of searching for that hidden home in a low-inventory market and entering a bidding war, we’ve seen a lot of homeowners use our home equity line of credit (HELOC) to add another bedroom, update the kitchen or finish the basement. This approach helps current homeowners avoid overpaying for a new home, and, at the same time, improves the home’s resale when you do decide to sell. 

Contact your neighborhood loan officer to find out how a HELOC could help you improve your home’s value.

Research community organizations.

Many local nonprofits and governmental groups offer programs designed to help low or middle-income earners achieve home ownership. These can include down payment assistance, programs with gradual mortgages or payment deferred options. Visit’s Office of Housing page to find out more about Seattle-based opportunities for housing help.

Happy hunting!