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...which could probably now go for around $600-$700k. My point is that you aren't going to see DC real estate values ascend nearly that significantly over the next 20 years. You were correct earlier when you stated that the recent nationwide decline is basically unprecedented, but then again so was the five year boom that preceeded it.
I don't think you can say that. I believe it's fair to say that DuPont Circle may not appreciate as fast as in the past, but there is no analytical support for your assertion that great deals don't abound. I'll give you my 20 year pick -- waterfront property on the Anacostia River.
Quote:
Originally Posted by 14thandYou
I'd 10x rather be in Arlington, Bethesda, Alexandria or another close-in burb than Brightwood, but those locales are beyond our realm of affordability. Commute times are a factor, but only one of many.
I find most of the suburbs very sterile. Old Town is an exception.
Me too. Money I could have put in for a down payment has been invested and will allow me to take a couple years off if I choose.
While you don't get the tax benefit, if you really like owning you can buy a property to rent it out. That way you get the benefit of the appreciation and generate decent income in the meanwhile.
and a full townhome goes for well over $1 million. It's hard to make a good return when you're entering at that level
a friend of mine bought a place in Georgetown for close to 1 mil 10 years ago, and her comps have her place pushing 2 mil now, same thing could definitely happen in Logan
a friend of mine bought a place in Georgetown for close to 1 mil 10 years ago, and her comps have her place pushing 2 mil now, same thing could definitely happen in Logan
Sure, it might. There are probably certain neighborhoods in DC that will continue to increase (although perhaps not at the extreme rate of ascendency seen during 2000-2008)...it's more the speculative/transitioning neighborhoods that would concern me. There's still money to be made in the DC real estate market, but the era when every Tom, Dick and Harry could flip a house in 3 months for 200% profit is done. And good riddance.
There's still money to be made in the DC real estate market, but the era when every Tom, Dick and Armondo could flip a house in 3 months for 200% profit is done. And good riddance.
Fixed that for you. Can't believe that guy still has a TV show.
Wanted to give the experience of someone who has lived here for ~20 years that started out as a renter then became a homeowner. I arrived in DC in my 20s and rented for about 5 years. My wife and I bought a townhome by the vienna metro. We paid about $175K, which was alot back then. We sold the townhome during the housing boom for about $400K. After paying off that mortgage we had about $230K as 'profit'.
We ended up buying a SFH in arlington and used $150K of our "profit" for a 20% downpayment on that home. So far, boom or not, this is working out for us. The homes in arlington have dropped in value, but we are not in a negative equity situation.
We saw a lot of people flipping homes back and forth, but we never participated in any of that. We probably paid too much for our SFH, but we'd have to have rented for a year or so then bought last winter (?) when the market appeared to have bottomed out to have really made out like bandits.
Interesting discussion. Just signed a contract for a studio condo a couple of blocks away from the Waterfront. Even though this thread is over a year old, based on what I went through the last 2 months, now is a great time to buy if you can afford it. I rented for 3 years, probably spent $52000 in rent over that span. That's about 1/3 of the mortgage I'm about to get into. There are no benefits to renting, yeah, you have the freedom to pack up and leave after a certain time, but think about it, how many times can people move from one rental to another?
We're talking like this area is rural Idaho. It's DC, constant influx of new people every year and the real estate market will always be ripe. I think if you can afford a) the down payment and most importantly b) the mortgage, you should buy. Otherwise, you're cutting a check every month for $1500 a month or whatever the going rate is for a 1 bedroom in this city, and you're never going to see that money again. I sound like a realtor, I'm not...but I learned a lot these last 7 weeks about the benefits and risks of buying. I did that NY Times buying vs. renting calculator, and according to that, I'll come out ahead in 2 years. I can live with that. I'm 26, single, I have no plans to have any children in the next 3-4 years. I think for me it's a wise investment.
I think condos are bad investments, period. Unless, that is, you can get a 3BR-2BA condo near U Street for $300K. Otherwise, they're bad deals, imo. Especially the one bedrooms. At the end of the day, people value space. And privacy. And that's why condos are often so hard to move.
That said, I think you should buy if you think DC will be your home. By your early 30s, once you've been at a job for a while, chances are you'll be in that city for a while. At the rate rent is increasing, I think buying actually protects you. Your mortgage payment will never leap the way a rent payment will (unless your condo fees shoot up, which is yet another reason why condos are a bad deal).
Some people like condos because of the sheer convenience. They want to paint, move some furniture around, and call it day. My advice, if you're looking to buy, is to go somewhere like Petworth or Eckington, and buy a house where you can convert the basement into a rental unit. This takes a lot of pressure off having to make a large payment. I mean, a 2BR condo near U Street will probably cost you $450K, but you could buy a whole house in Eckington (plus basement unit) for the same amount (if not less). It just flat out doesn't make sense to me to buy a condo (in a currently desirable neighborhood) when you can buy a house for the same price or less (in a neighborhood that may be as desirable in 10 to 15 years).
In fact, here's my short quiz to determine whether you should buy or not:
1. Do you work in a quintessential Washington industry (lobbying, think tank, DoD) that has a virtual zero probability of evaporating during an economic downturn?
2. Can you see yourself staying in DC for the long term? You may not know for sure, but does this seem like a place that you're comfortable with, that you enjoy, and that you could see yourself raising a family in?
3. Would a mortage payment be within $300 -$400 of your current rent payment?
4. Are you comfortable with your current rent payment? This doesn't mean "Are you happy with your current rent payment?" We all think THE RENT IS TOO DAMN HIGH, but there's a difference between not liking how high the rent is and not being able to buy toothpaste because THE RENT IS TOO DAMN HIGH. So, basically, if you feel like you might have to sell one of your children to make next month's rent, you're not comfortable with your payment.
If the answer to all of these questions is "Yes," then I think you should buy, provided that the neighborhood and the property are of reasonable quality. "Reasonable quality" does not mean a busted up shack off Kenilworth Avenue. I know a lot of people who buy just for the sake of buying. I think you should only buy a house if you really like it, or you could see yourself reaaaly liking it with the right work, even if the neighborhood is not yet where you want it to be.
I think you should shoot for a mortgage payment that's no more than $300-$400 more than what you currently pay. I think this because: (1) you pay mostly interest in the first 5 years of your note anyway, so you get more back than what you give up and (2) your rent is likely to increase by that amount in 5 years anyway. The only difference is that you'll never see that money again. Four years paying $2,000 per month in an apartment is $96,000.
I don't think huge downpayments are a good idea. They help the banks; I don't see how they help you. I just think your focus should be on the payment. "Am I comfortable with this payment?" is always the first question, I think. If you can get away with putting 3-5% down, and have a note you're cool with, then why plop down more cash that will make very little difference in your monthly note? 20% downpayments were not so bad in our parents' day when they bought a house for $70K (if that). But throwing down $80K-100K on a downpayment is downright stupid to me. If worst comes to worst, you could always negotiate a short sale with the bank (that's what my neighbor did). And if they don't accept the short sale, at least you're not short 100 grand. That's just the way I'm looking at it.
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Can't believe that guy still has a TV show.
