Depressing (rent, loan, taxes)

[ariadel]

I have a question: is there a reason you're married to the idea of a Single Family Home rather than a Townhome? The price difference between SFHs and Townhomes is noticeable. Edit: Hmm, but not as drastic as I was thinking! There seem to be over a dozen SFHs for sale in Reston/Herndon for under 300k as we speak!

I've seen 4br Townhouses with 2-4 baths sell in Herndon for 165-190 over and over in the past four months. I think you could get an impressive square footage end unit townhouse with a finished basement if you have a 300k budget.

That said, I don't know if THIS YEAR is the time to do it. I am not an economist, but as someone in a similar situation to you (I've been living in FFX county for four years, renting) I've been reading economic information and forecasts voraciously.

The only things I've learned for sure are these:
1. No one REALLY knows what is going to happen.
2. In the housing market there is a huge risk of losing a lot of money no matter what you do.

Other than that, things are all over the map. I've been doing a lot of thinking, and this is the assumption I'm currently operating under (again, just hunching based on a lot of research).

There's a 30% chance that houses in FFX county will reach their cheapest this summer and autumn, and that by 2009 prices will have started to steadily increase - meaning that a house will cost you 5-10% more if you buy in 2009 than 2008.

There's a 30% chance the houses in FFX will continue to decline slowly, reaching their cheapest in 2009 or 2010. This will mean that your house will be worth 5-10% less in 2009-2010 if you buy now.

There's a 15% chance that the market is still in for some sort of MAJOR correction, and that all the houses around here will lose another 20-30% of their value in the next couple years. Note: Currently a lot of the townhouses I'm looking at are selling for LESS THAN HALF what they sold for in 2004-2006.

There's a 5% chance that the government will intervene directly, causing something no one can predict.

Right now buying a house is a serious gamble. I'd say that it's smart to spend the next year or so getting your finances in perfect condition, so that when it is time to pounce, you are ready. You may end up paying 5% more for your house, but I think that's worth it, given the alternatives.

[Fairfax Mom]

Why not move out to Fairfax or Burke? - very close to Arlington and You can get a nice home for 400k - but then you would have to be happy without a McMansion.
400k is not too out-of-this-world - most homes around the country cost that much.

[stacylee926]

Originally Posted by sunnyisland

Stacy thanks for the advice. To actually hear it from someone who has gone through that situation is very enlightening. I thank everyone for their insights and would think perhaps we should just focus on getting better with own finances before taking in more responsibilities.

Your welcome . I was glad I bought my TH, but homeownership is not all that it is cracked up to be - IMHO. I did sell at the begining of the housing boom and I made 80K in that time I owned, but 20k went to my real estate agent! Nevermind the 10k I put into the house to get it ready to sell (in order to make some money). I had no intention of selling, but the economy forced me out of the area - and for that I will be eternally GRATEFUL!!!! You can get so much more for your money in other cities and regions. I worked 2 jobs, was always tired, was always running and fighting traffic and felt like I was getting nowhere. Anyway..... Continue to pay off your bills and I would try to save too. You never know what other opportunities are waiting for you in the future.

[sunnyisland]

RESPONSE TO ARIADEL

The only reason we prefer a SFH is because we have a child and would be nice to have backyard for a change. Townhomes are less expensive but usually they don't come with backyards just a small deck or none. But for now I think we are just going to stick to our guns and pay off our debt first and plan later when everything's more stable. Anyway with the uncertainty in the economy, the credit and real estate markets perhaps its not advisable to make any major purchases like a home this year.

[dkf747]

Originally Posted by sunnyisland

Plus my husband is very much against moving into MD or DC cause he mentioned that the crime rate over those areas are significantly alot higher than in Herndon or northern VA.

I'm thinking that by believing this, you are missing out on some good options. For example, I live in Gaithersburg now. I'll bet that the crime rate is similar to Herndon's. I've heard bad things about both, but the reality is quite different from what people say. I'm just saying this. If you prefer NOVA then more power to you.

[Blondie4now]

To the original poster: Guess what? You're no different than anyone else...so...you're going to have to find a way to make it work. Prices are very very high here. We had no debt when we arrived, and then I wasn't able to go back to work full time like we had planned because of a little unplanned family issue, and VOILA magically, we are in debt. Overnight.

Why do you have to live in Arlington? Because thats an "in" place? There are many nice places... Fairfax, Burke, Springfield, Lake Ridge...with good schools. Also why not look in Maryland? And what about a townhouse? Trust me, a single family home takes A LOT OF WORK & $$ to maintiain. If you are cutting it close, all it takes is one little thing, like new furnace or some other household problem to send you into debt. Think a little smaller and you will have peace of mind.

[HEATHER72]

I have to agree with Blondie... a bit of tough love. This area is a very expensive place to live. However, making $120K a year and renting... you should be able to pay off a $30K debt in no time. Unless you have like 2x $600 a month car payments and all that jazz. Housing will always be expensive here... it's the capital of the US. People want to live in the city and that will drive up prices. Just look at the sprawl.

[scimitar12]

[quote. Yes, it is supply and demand...but the area you are in is where people want to be so the prices WILL be higher. My husband works in Tysons and in order for us to have a single family home we had to purchase in Ashburn. For the price you are looking at, you cold have a nice townhome in this area for that amount.quote]

Prices are continuing to drop a lot for townhomes in Sterling. When we moved here last September most decent three bedroom townhomes with a one car garage went for no less than $310-$320. Now many are priced at $220-$250. Granted some of these are foreclosures but they well worth a look. The commute to Tysons is not real bad either. Good luck with your search.

[Bigbluelandrover]

Hubby and I are in a similar position as the OP. However, I am risk adverse and I told him I did not want to go out and spend over $400k for our first home. We also decided to find a TH that has some room and is a corner unit. IMO a TH is not a bad deal, there are many that are in areas with walking paths and park-like tot-lots. We live in MD and there are plenty of areas here (esp in Moco) that have safe areas and good schools.

We are going to pay off debts and save some money before we buy. I would advise you to read a Suze Orman book on finances. Rent does not = throwing money away, you are getting a place to live in--except with a mortgage you are paying "rent" to the mortgage co. Despite what everyone thinks you NEVER own a home --skip paying property taxes and see what the result will be!.

Home ownership is great but don't rush out and do it because you are tired of renting. Owning can be a complete nightmare if you need to sell in a market like this where values are dropping. The other problem is now actually getting approved for a loan.

[5stones]

don't discount TH's. ALOT have have quite nice yards and will have pools and playgounds too. our SFH had a smaller yard than alot of the TH we looked at.

I too agree that your 30k debt on 120k should be easily paid off. BUT you have to stick with a very tight budget. If you have big carpayments maybe reconsider and sell for older smaller cars.

as other have said...homeownership esp in this market doesn't always pay off for the tax break. esp if the market is declining and you are LOSING equity instead of building equity.

But cutting down on the commute miles would be a better option than moving out for the bigger newer house. Gas prices will hit 4 bucks a gallon and driving from Herdon to DC isn't getting any better.

SO really if you are really interested in homeownership...start with a good realator, and look for end unit TH with yards. maybe in the falls church area (metro!!) you have ALL the time in the world in a slow market to really look at the properties and find one that needs a little TLC, but has waht you need.

Also remember when figuring your finances...your monthy payment will not be just your loan. yOu have taxes, insurance, and propbably PMI insurance, trash, sewar, all utilites etc... and maintence costs.

Good luck.