Buying a townhome vs renting

[SteelCityRising]

I'm surprised to hear that selling prices continue to drop in the Winchester area while the region continues to grow steadily in terms of population. That certainly throws a wrench into those on this forum who have told me that the high housing prices in Fairfax County are on account of limited supply vs. increasing demand. In Winchester it seems that there is increasing demand vs. a flat supply, yet prices have declined in recent years. Bizarre.

I'd gamble to say prices will increase in Winchester in the coming years. The community is becoming more built-up (I believe the new Best Buy will be opening soon, as a prime example). The schools are strong. Shenandoah University continues to grow. If and when Leesburg becomes a more concentrated employment center you'll see an influx of people into Frederick County who want a taste of small-town life while being able to do a 40-minute commute or so each way to Leesburg.

[preetij22]

Yes, I understand realtors have their interest in promoting a sale. I've asked some realtors and plan to ask some more so that I can see if I can get a majority of similar opinions. It is hard to find someone unbiased!

[claremarie]

Sometimes the best way to make these decisions is to consider the worst-case scenario for each possibility.

What is the worst thing that could happen if you rent? Well, you might have to move if your landlord does not renew your lease, or if you end up not liking your rental, or if you change jobs, or if you need more space for a family. If property values in that area appreciate sharply, your rent could go up over four years. And you would have missed out on any appreciation in the townhouse that you didn't buy, and possibly the benefit of the mortgage interest and property tax deductions (depending on your tax situation).

The worst thing that could happen if you buy? Property values could hold or decline, leaving you with no appreciation and a loss when you sell in four years. Even if property values appreciate, new townhouse developments in your area might depress the price for your older unit, which will be competing with the new shiny models for entry-level buyers. You could lose your job(s), or be transferred, or be offered an attractive position in another city, and be unable to sell your house quickly.

If you don't like the idea of "throwing away money" on rent, consider that "throwing money away" on interest isn't much different over the short term.

[South Jersey Styx]

Originally Posted by CaliTerp07

Is It Better to Buy or Rent? - Interactive Graphic - NYTimes.com

This is an excellent tool and I am going to pass it along to others. Thanks for sharing CaliTerp07!

[South Jersey Styx]

Originally Posted by preetij22

Southjerseystyx - the townhome is in the Wakeland manor subdivision in Stephens City

I'm not that familiar with that area since I live in downtown Winchester. But isn't there still alot of new building still going on around there? I understand that prices stabilize once things are built and there's no more land left in the surrounding area? If that were the case, as a previous poster mentioned, someone looking to buy in that area would most likely choose to have a a new house that can be built instead of buying a used one.

From what I asked real estate agents, they said values would go up in 3-4 years. They would not go lower from where they are now. I'm confused!!

If you have a good Realtor you can trust, then consider it. When I was buying in Winchester, my Realtor used to forward news articles/real estate articles with helpful information like prices going up or down, changes in the market, etc.

Originally Posted by RestonRunner86

I'd gamble to say prices will increase in Winchester in the coming years.

I believe they'll rise too, especially in 5 years. The downtown area has undergone ALOT of changes, even in the last year or so. Even now, the areas east of the historic district (where the new police HQ is) has added new trees (which looks like a park or something) and a new store is opening (somethign with seafood). The city bought the house right next to the park and is opening some kind of community center.

One of the next projects is going to be National Avenue, the main street that brings people in from Rte 7. There are some raggedy houses there which is too bad because many of the houses are really nice.

(I believe the new Best Buy will be opening soon, as a prime example).

Yup. They're store facade is up sans yellow and blue paint and logo. it's moving along quickly.

[preetij22]

Thanks for the advice everyone! At this time, we have decided to rent till we are certain of where we will settle. Claremarie, your advice makes sense... hopefully, renting should work out for us as of now!

[Tiger Beer]

Why are people suggesting renting?

I wonder if I'm missing something. But mortgage is cheaper than rent...plus you can sell when you leave. So, you basically get your money back.

Doesn't it basically mean that buying is a win-win situation, and renting is simply a losing situation?

Even if you sold it for less than you paid for (the worst case scenario), you still saved a ton of money by buying over renting. Renting for 4 years is around $50K+ directly in someone else's pocket. Am I missing something?

[FindingZen]

Originally Posted by Tiger Beer

Why are people suggesting renting?

I wonder if I'm missing something. But mortgage is cheaper than rent...plus you can sell when you leave. So, you basically get your money back.

Doesn't it basically mean that buying is a win-win situation, and renting is simply a losing situation?

Even if you sold it for less than you paid for (the worst case scenario), you still saved a ton of money by buying over renting. Renting for 4 years is around $50K+ directly in someone else's pocket. Am I missing something?

Renting in NOVA has its advantages for some, one particularly being the worst case scenario you point out. While I don't have any idea about how the real estate market is doing in where you are in Japan, even in a high-demand housing market such as NOVA, homes can sometimes languish on the market for weeks and months. That would complicate things for the would-be sellers in a lot of ways, including buying that next home.

Also, the days of $0 downpayment are essentially over (infomercial enticements notwithstanding) so it can be difficult to save for a home while living in NOVA, let alone when moving from the majority of US metros that have a lower cost of living. You may have already noted that a moderately appointed 1BR condo in Alexandria or Arlington can cost more than an entire SFH in many other places across the country.