The Geography of Home: This article linked below from Realtor.com offers a balanced evaluation of the question to buy or invest in a 401K, which is particularly meaningful for those first time buyers on the fence. It challeges the conventional mantra voiced by the real estate industry and gives solid insights to keep in mind as you consider your choices.
Applying these insights to Seattle, in most cases, it really DOES make sense to buy rather than rent due to unique and well documented market conditions. Visit Realogics Sotheby's unique platform www.NoPlaceLikeOwn.com for an in-depth exploration of these factors, including low interest rates, good paying jobs in a robust economic environment and skyrocketing rents. Added to this Seattle portrait is the importance of timing; high demand, low inventory, a highly competitive real estate market in the in-city neighborhoods and solid year-over-year home values appreciation make it prudent to be decisive sooner rather than later. The main stumbling block for first time buyer is often the down payment and there are recent new options addressing that issue. Gift money from family members has been the solution for many of my first time buyers.
At this time, many sellers are realizing the opportunity to reap the equity that they have built over the years, including the added value of thoughtful remodeling and upgrades.
In addition to the significant tax benefits and the fact that you are building your own portfolio and not that of your landlord's, for those potential first time buyers who are planning to be in one location for 3 years or more, it makes a great deal of sense.
So, where do you put your savings?