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"Flotation, flotation, flotation". Frank Michael Russell, Puget Sound Business Journal, July 12-18, 1996. (with permission)

More empty nesters are abandoning suburbia for the pricey romance of Seattle houseboats

It helps to be something of a hopeless romantic.

Seattle houseboat owners will talk at length about the lure of living on the water. They might describe their home as a floating oasis in the middle of the city. They'll speak of breathtaking views, a spirit of community among their neighbors, and the wildlife and water craft of all sizes that pass by on the lake.

"We have an ongoing parade out our front windows that is constantly changing, constantly interesting," said William Sutherland - who, with his wife, Jane, traded a sprawling house on Mercer Island for an 1,800-square-foot Lake Union floating home.

The Sutherlands are among a wave of empty nesters who have sold large homes in the suburbs, bought waterborne residences on Lake Union or Portage Bay, and brought a new stability to Seattle's eccentric floating-home community.

It's a trend that mirrors a greater interest in city living among couples who used to own family homes in Seattle's suburbs, real estate professionals say.

"There has been an increase of affluent buyers desiring to live in the city and having the money to do it," said Rick Miner, a real estate agenr with Coldwell Banker Bain's Westlake office who bills himself as a "creative lifestyle specialist."

Elaine Eigeman, a real estate agent with Re/Max Metro Realty who has been selling floating homes for more than a decade, agreed that empty nesters are now her biggest group of clients.

"They typically choke at the idea of going into a condo," she said.

But the market also includes young professionals in fields such as software - couples and singles who have cash reserves or can tap into stock options to afford the large upfront costs of buying a floating home, she said.

"When they leave their car and walk down the dock, they separate themselves from their workaday stress," Eigeman said.

Small Market

About 20 floating homes may be put on the market in a year. There are less than 450 in Seattle, and they can cost several hundred thousand dollars. A home in the prestigious Roanoke Reef community has an asking price of $888,000. More expensive floating homes are located on docks with co-op or condominium ownership, which gives residents control of the underwater land beneath thir homes.

"The stability comes from owning the land and the value that comes from it," Eigiman said.

In Seattle, floating homes - unlike smaller house barges - are hooked up to sewers and city utilities.

Bargains still can be found closer to $100,000 - but only on docks where residents pay moorage owners monthly rents that run about $450 to $500.

Owners tend to downplay what they've given up for their waterborne lifestyles - lawns, garages, extra rooms and closet space that owners of most single-family homes in the Seattle area take for granted.

"I had to downsize," said Norman Turgeon, co-owner of Turgeon-Raine Jewelers, who bought an end-of-the-dock floating home three months ago after selling a large house on Capitol Hill's Federal Avenue. "I really had to get rid of a lot of things I don't miss."

And in most cases, floating homes aren't even legally considered real estate - the law treats them something like mobile homes on the water, the structure itself taxed as personal property.

"The floating ome is very appealing - but not for everybody," Miner said.

About a year ago, the Sutherlands sold their 4,000-square-foot Mercer Island house for about $425,000.

"We had a very large home requiring a lot of maintenance. The kids were all gone. It was time for a change," said William Sutherland, owner of Island Building Products in Bellevue.

The Sutherlands had been looking at houses on golf courses and condominiums for about two years.

The couple wanted to live on the water, but a waterfront condominium with the features they wanted would have cost as much as $1 million. Their floating home off Fairview Avenue cost about $325,000, Sutherland said.

Close to culture

The Sutherlands also enjoy being close to the culture of the city.

"We like the opera and the symphony," he said. "The downtown life has appeal."

Alan and Wendy Higginson, with their two sons now in college, traded a 3,500-square-foot suburban house in Woodinville about two years ago for a 1,700-square-foot floating home on Seattle's Mallard Cove dock.

"It was a big shock," said Wendy Higginson, who commutes to her job as a school psychologist in Everett. "It's a bigger shock to us now that we don't miss anything."

Friends more used to suburban living are befuddled by the close quarters, or perhaps consider houseboat life too funky, she said.

"I could gush on about how much we love it," she said. "It's really soothing. The mornings are gorgeous."

Her husband, who is president of XactLabs Corp., enjoys being close to his downtown Seattle office.

"We kayak out of our front door," she said.

She likes the nearby Eastlake neighborhood, and the couple are both Sonics fans.

"Everything we like to do is within minutes," she said.

Houseboat life in Seattle used to be considered bohemian. It was cheap, but owners of houseboats rented their moorage space and could be easily evicted by dock owners.

Nowadays, real estate professionals say, just like buying any residence, purchasing a floating home is not without some risk - but nothing to lose any sleep over.

On Lake Union, most of the submerged land within about 150 feet of the shore is privately owned, said Phil Miller, an attorney with Ogden Murphy Wallace P.L.L.C. who handles much of the floating-home business in Seattle.

Residents who don't control their own docks are protected from massive rent increases by the city's floating-home equity ordinance, which also prevents certain types of evictions, he said.

City zoning and the state's Shoreline Management Act make it impractical for moorage owners to convert their property to other uses. "They're a lousy commercial investment," Miller said.

The city equity ordinance also gives floating-home owners the first chance to buy their docks. Most moorages eventually are sold to co-ops controlled by the homeowners.

"That's by far the most popular and prevalent way that floating-home property has changed hands," Miner said.

    Potential buyers have four types of moorages to consider:

  • Month-to-month tenancies."The month-to-month is the least secure legally," Miller said.
  • Leases.They provide additional security, but possibly at the cost of higher rent increases than would be allowed under month-to-month tenancy, according to Miller.
  • Cooperatives.Homeowners form a nonpropfit corporation which owns the dock. "There you're fully protected," Miller said.
  • Condominiums.Moorage ownership is legally more complicated than with a co-op, but "it feels the same," Miller said.

Co-op and condo ownership give the homeowner the most protection, Miller said. "Those tend to be obviously more desirable, and you pay more for them," he said.

Control docks

In 1984, about a quarter of Seattle's floating-home owners controlled their own docks, Eigeman said. Now, she estimated, between two-thirds and three-quarters do.

The biggest obstacle for most floating-home buyers is the large down payment that is required.

"The typical down payment is 25 percent," said Jack Myles, vice president of Fremont First National Bank, which has entered the market over the past year with about $2 million in loans on 20 floating homes.

The larger down payment is necessary because there's no secondary market for floating-home loans, Myles said. The bank that makes the loan must keep it on its own books.

For that reason, interest rates are also higher - about 1 to 1½ percentage points over conventional home loans.

"You can't shop for interest rates because there aren't that many places that give loans," said Wendy Higginson.

Many larger banks are reluctant to enter the small floating-home loan market, Myles said. "There's a lot of little quirks out there. It's not worth their time to understand."

But Fremont First National - a small, one-office bank with assets of about $18 million - has found floating homes a worthy business, Myles said, pointing out that bad loans are rare among homeowners on the lake.

"The last thing someone is going to default on is their home," he said.

The large down payment required can block entry-level buyers looking for a bargain on the lake, Myles said.

"It's a little tougher for them at the lower end of the market," he said. Even a buyer interested in a $100,000 fixer-upper would need at least $25,000 in available cash.

"That's the harshest reality about houseboats," Eigeman said. "Not everybody who wants to buy a floating home can do it."

Call Rick Miner (206) 940-1180
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Contact Rick Miner:

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(206) 295-9000


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