rent rent rent! The absorbtion rate in Kirkland is driven by short sales and pre-foreclosure buyouts. The usual suspects for buying custom homes, the relocating executive or tech person is still waiting for confidence in this market, and they will rent, min 6 month lease, before buying.
Do NOT try a lease purchase. They are failing on appraisal and make nothing but hard feelings between buyer and seller.
Finally, take a tour with your Realtor of all the similar homes on the market in Houghton, Bridal trails and Rose Hill, plus Juanita, to see if similar homes are on the market, and what their market history is....
No reason for indecision!

One year will not a difference make. In fact we expect to see a lot more foreclosures in the high end near you, which could drag prices down considerably. Like others, I am assuming by your description that the home would be priced in the $1.2M or above range. If that is not the case, let as know, as different price tiers will have different answers.

If the rent will not cover your carrying costs, you have to factor in the shortfall for that year, so selling next year at the same price would likely be a loss.

Also check the change in the capital gain tax as they are now prorating if you rent out the property. Used to be OK if you lived there for 2 out of the last five years, but there are new rules if you turn it into a rental for any of those 5 years.

Julia,

The most important question regarding whether to sell now or wait is based on where you want to move. For example, if you want to move up to a larger home or a better location, a property that is more expensive, when the market is a Buyer's market is the absolutely best time to do that.

Or, for example if you want to move to a home further out, maybe on the peninsula, now is a great time because, in many of the outlying areas prices have decreased more than they have in the city.

There are many indications nationally that we have "hit bottom". In the King county area, absorption is up to 19% and has two months in a row of year over year increase.

Interest rates will not stay as low as they are now and over time, prices will go back up. To accurately answer your question depends on your own personal situation and goals. I am always happy to visit with you for a consultation.

Warmly,
Karen

Hi Julia,
Several of my sellers have opted to rent their properties after they have been on the market during the turbulent times beginning Summer of 2008. They have rented and with great success. By renting they have had the opportunity to create revenue which allowed them to purchase a new home, and gave them the opportunity to take the home off the market for a while. By taking the home off the market, they will essentially start as a “new” listing when they put it back on the market again.

The rental market is traditionally hot during the summer, when people are moving into the market in time for new jobs and school to start in the fall. This year (2009) it is exceptionally busy while people are moving into the area, but reluctant to buy immediately. Either they are waiting to see if the new job is what they expected, they are waiting for the market to return, or they are waiting to recoup their losses in savings and investment vehicles. Rentals are hot right now and the good ones are being snapped up quickly.

That being said, pricing right and getting your home ready for the market, even the rental market, will command top dollar and get you home rented first. It is always about price, condition, and location.

Good luck, I hope this helped.

HI Julia,

While the local market seems to be stabilizing at the moment, I don't think the prices will increase in one year to warrant waiting. When you say custom home in Houghton, I am assuming you mean a home worth more than $1,000,000. The luxury market in Kirkland is still slow and may remain so until the inventory of homes presently on the market is absorbed. However, if you choose to rent out your home, I would suggest you consider it a long term rental because it will take longer than one year for the situation to improve. If your intention is to sell in the near future, I would go ahead and put your home on the market rather than rent it out.

I agree with James in that hated response "it depends." But I would add that you should rent it only if you can afford to rent it indefinitely. I don't see any reason to believe that the local real estate market will continue to stabilize or that prices will continue to fall. The messages are just too mixed, and the possibilities to numerous to interpret with any accuracy.

But to give you professional advise for your specific situation would require knowing much more about your specific financial situation.

First, ... no one can predict what could happen in a year. Sure the last few months have brought positive signals, but anything can happen in a year. What if Boeing announces it's moving assembly to South Carolina? That will stunt any hopes of the market turning around in this region ... at least in my opinion.

Second ... financing .. I've heard the commercials for the last several years...oh wow interest rates are so low, get in on it before they go up ...well, ..they're still in the 5's and 6's ... so who knows where they'll be in the next year.

To answer your question, ..it really depends on your individual circumstances. Could you rent it out for more than 1 year if the market does not recover enough for you? If you sold now, ..could you meet your financial goals for the house? Are you selling in order to buy another place? Do you ..financially...have to sell to buy that other place? Have you ever rented a house out before or dealt with tenants in some capacity? etc. etc. In general, the best time to sell is when it satisfies your goals to sell. It's a crummy market to sell homes... I'm going to guess yours is a higher end home (based on the "custom" description) and higher end homes are moving sluggishly. What about putting it up for sale and rent simultaneously and see which one bites first?

So to answer your question ... the hated response ... well, ..it depends!
Please post back some more details about your situation and the community can all chime in. Or msg me directly if you don't want to share that much info with the public.