SEATTLE — Competition is still fierce to own a home in Seattle, and according to a new report by Redfin, it is largely because there just are not enough homes on the market. Redfin reported that the total number of homes for sale dropped nearly 20% from the year before
Now, with home prices as high as they are, some Seattleites are thinking outside the box.
A new listing advertises a luxury home for only $200,000 in Crown Hill, a few blocks north of Seattle's Ballard neighborhood. It's undoubtedly a sweet deal when you consider how, this summer, Seattle homes sold for a median price of $800,000.
But there is one caveat: you would own only 25% of the home.
"If we're really looking at, 'How do we make housing affordable?' We had to get creative," said Katrina Eileen, founder of Katrina Eileen Real Estate.
A constant stream of people flowed through her Open House event on Sunday.
"I have not seen this before," said Stacie Hayworth, who toured the home.
Eileen said the idea is to get somebody a piece of the ownership pie for less. It's an idea that seemed to resonate with many of the people who came to visit the home.
"The barrier to entry for a lot of people in this market is just the straight-up cost of buying property," Hayworth said.
Eileen said you would technically own a private room and bathroom for $200,000, and then across the hallway on the same floor, somebody else would own the home's other bedroom and bathroom for $200,000. You would have to be okay with sharing the whole downstairs, which comes furnished with the other occupant.
"We've got dining space, living space... this is what everyone would have access to as co-owners," Eileen said.
It’s called tenancy in common ownership.
An investor would own 50% of the home. In Eileen's case, records show her husband's LLC owns the parcel.
"The people who would have been tenants each own a percentage of the property," Eileen said.
Each new owner would own 25% of the home.
In the long run, Eileen argued there is the added advantage of flexibility, versus co-buying a home with a friend. She said co-buying can come with more complications.
"You don’t have the ability to buy and sell your interest separate from one another," Eilen said.
After her tour, Hayworth said she feels it is a "neat" idea, and added, "I think there’s a lot of questions people will have.”
Eileen said there will be restrictions on behaviors, such as smoking or making loud noise during "quiet hours," as is written on an agreement the owner would need to sign.
Another real estate expert not affiliated with the listing, Adriano Tori, CEO of Rexmont Real Estate, said buyers in these types of models should do “a lot of homework upfront.”
Tori supported the idea, calling it a "temporary solution" to the affordable housing crisis. He said he feels it is of the utmost importance the buyer asks the right questions and reads the fine print.
"If there were any conflicts that rise out of it, who ultimately would have a deciding factor?” Tori said.
Eileen said she is marketing toward tenants who already know each other; perhaps even Seattle's many hybrid workers.
"You live remote and you have to come back to the office now, two, three days a week, now you have a crash pad," Eileen said.
Tori told KING 5 he feels this is probably not a good fit for someone looking to resell their portion quickly, because they may have trouble finding a buyer interested in this type of alternative arrangement. However, he said he feels it will likely be profitable in the long term, because he said the property value will appreciate, especially in Crown Hill.
It is worth mentioning they are charging more than $700 in HOA fees per month to keep the place clean and operating and to maintain its resell value as well. According to Today's Homeowner, the average HOA monthly fee in Washington is $388.