A new analysis suggests you should rent instead of buy a home in the Seattle area if you plan on living here for less than four years.
That’s the second-longest “break-even horizon” among major U.S. cities examined by Seattle-based Zillow.
The online real-estate database and marketplace calculates a break-even point of 3.7 years for the metro region and 4.3 years for Seattle proper.
The break-even horizon is the number of years after which buying an individual home becomes more financially attractive than renting it. Zillow says its model accounts for property taxes, utility costs and tax benefits of buying a home.
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“From a macroeconomic perspective, it’s true homes are more affordable than they ever have been in most markets in the U.S., but that doesn’t mean everyone should go out and buy a house,” said Stan Humphries, Zillow’s chief economist.
Both investors and consumers should think hard about how long they plan on being tied to a home — and can target their search according to the break-even horizon.
Among the large metro areas examined by Zillow, Seattle’s break-even horizon is longer than all except New York’s 5 years. In San Francisco it’s 3.7 and in Portland, 3.6. The ranking is based on data through the end of last September.
Even so, there’s a lot of variation within a region: Zillow estimates it would take 5.8 years to break even on a house in Yarrow Point on the Eastside, and only 2.3 years in Parkland in Pierce County.
Those who plan on staying put for longer than the break-even horizon should consider buying a home, Humphries said. Realtors’ rule of thumb was that this horizon was three to five years.
“The fact that 60 percent of markets are below three years tell you how affordable things are,” he said.
— Sanjay Bhatt
Sammamish man at center of SEC stock-fraud suit
The chain of chicanery allegedly led through British Columbia, Alberta, Mexico, the Bahamas and the Turks and Caicos Islands.
It ran from a law firm in San Diego, through boiler rooms in Canada, to a brokerage in the Caribbean.
The only address visible to investors, however, was on a cul-de-sac in Sammamish — the home of Lionel de Beer and the purported headquarters of a small, publicly traded company called Tradeshow Marketing.
De Beer and Tradeshow were part of an international penny-stock fraud that netted more than $11 million, according to a lawsuit filed by the Securities and Exchange Commission (SEC) this month.
Pursuing the whole troupe of players needed to put on such a production became a goal of the SEC in 2011. Its director of enforcement, Robert Khuzami, said it would go after the promoters and insiders involved in manipulating microcap stocks, and also the “Transfer agents, attorneys, auditors, broker-dealers and other ‘gatekeepers’ who flourish in the shadows of this less-than-transparent market.”
De Beer, ostensibly the president and CEO of Tradeshow, served merely as a puppet for John and Benjamin Kirk, the Canadian promoters who controlled its stock, according to the suit. De Beer, 41, also was the chairman of a second company whose shares they hyped, Pacific Blue Energy.
De Beer got more than $330,000 in 2009 in undisclosed “kickbacks” from the Kirks and other concealed insiders at Tradeshow following their stock sales, according to the suit. In return he issued “dozens of Tradeshow media releases” with misleading information about purported business developments and signed off on false corporate filings, the SEC claims.
Other players sued in the case include:
* Two San Diego lawyers, Luis Carrillo and Wade Huettel, helped the Kirks and other promoters conceal their controlling ownership, “Provided misleading legal opinions, and allowed the promoters to funnel sales proceeds through their firm’s attorney-client trust account,” says the suit. A subpoena for the financial records of Carrillo Huettel filed in federal court in San Diego two years ago alleged the firm “played a central role in and orchestrated or facilitated many of the ‘pump and dump’ schemes” conducted by the Kirks.
* The Kirks and several collaborators sent potential investors “False and misleading email blasts from two stock-touting websites they controlled — Skymark Research and Emerging Stock Report — … (and) hired a boiler room of individuals who called U.S. investors to tout the stocks, falsely claiming they were providing independent research.” They sold more than $11 million.
* Gibraltar Global Securities, a brokerage in the Bahamas, provided false information to brokerage firms in the United States “to conceal the beneficial ownership of millions of Tradeshow and Pacific Blue shares controlled by Ben Kirk” and other insiders.
De Beer did not respond to phone calls and email messages to his firm, De Beer Consulting. Carrillo and Huettell could not be reached for comment; the SEC suit says it is being wound down.
— Rami Grunbaum
Housing for artists coming to Mount Baker
Artspace broke ground earlier this month on 57 units of affordable housing for low-income artists and 9,000 square feet of commercial and community space near Sound Transit’s Mount Baker Station.
The Minneapolis-based nonprofit, which develops space for artists through reuse of historic buildings and new construction, says the Mount Baker Station Lofts live/work units will be its third project in Seattle and its first transit-oriented development.
In late February, Sound Transit sold the half-acre site, at Rainier Avenue South near South Forest Street, to Artspace after it secured financing and received permits. The property transfer restricts the new development to two on-site car-parking spots and requires bicycle storage inside for tenants.
SMR Architects designed the Mount Baker Station Lofts and Marpac Construction is the builder. The lofts will have studio, one- and three-bedroom units, as well as a roof deck with a “generous gardening area,” according to Artspace. There will be 12 commercial spaces ranging from 275 to 1,170 square feet.
When the Mount Baker Station Lofts opens in June 2014, Artspace will manage the four-story building and rent the apartments only to artists earning no more than 60 percent of the area’s median income, or $36,420 this year, said Cathryn Vandenbrink, Artspace’s vice president of properties.
“What’s really exciting about this project is it’s a game-changer for that community,” Vandenbrink said. Artspace hopes the project encourages new pedestrian-friendly development, she said.
The project also will address a shortage of affordable housing for artists’ families: Artspace says more than 1,000 artists are waiting to get into its two other Seattle projects, Tashiro Kaplan Artist Lofts (50 units) and Artspace Hiawatha Lofts (61 units).
And what about artists who left Seattle already for more affordable pastures? Vandenbrink, a jewelry artist herself, says Artspace is studying the feasibility of projects in Tacoma and Olympia.
— Sanjay Bhatt
Comments? Rami Grunbaum: firstname.lastname@example.org or 206-464-8541