Just bought a rowhouse on H Street

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Ha, not me. I just got convinced by how many people started chiming in that they are renting out a place. Just soIndia like the 'everyone is investor' problem. I hope no bubble, we just paid a ton for a house we plan to live in for a decade.

given that there are a lot of young people eager to rent group homes in transitional neighborhoods - because on the one hand couples looking to raise kids do not want to buy them, because schools, and OTOH because despite the building boom there are not enough units in well located multifamily for the young millenials - there have to be a lot of rental properties. Somehow the market has to incent people who can to act as landlords.

Of course if the regional economy crashes and burns, that shortage of units in multfamily will disappear, apt rents will decline, and the kids in the group homes will either move to the apts, or bargain for lower rents.

Jobs are shrinking here now, so those millennials will not be coming in droves. Doesn't have to crash just stall, and marginal neighborhoods will tumble with it.

Renting out to group home, ugh talk about destroying your property.

There is some serious sky is falling doom on this site. Back in 2005 when the market crashed, there were serious signs something was wrong: Friends were buying houses with zero down and fudging their mortgage applications - it was all standard stuff. The washington post wrote articles in every Sunday paper back then that there were major concerns about the long term stability of the market.

This seems very different. I have no idea what you are talking about when you say jobs are shrinking. Job numbers are going up very well - better than economists expected. Wage growth has stalled, except for "professionals" who have done well on wages even during the recession (i.e. the population buying in DC).

And the reality is that despite the massive housing crash in 2008, DC weathered it quite nicely with the best close-in neighborhoods seeing gains during that period. We sold a home in Columbia Heights bought at the peak and sold 7 years later for 35% appreciation. Nothing spectacular, but we walked away with a six-figure gain.

As others have said, these close-in neighborhoods that are designated as the next "it" location see prices only go up after thousands of condos are built (opposite of basic economic principles) because filling in empty lots with condos makes the neighborhood more valuable, even if the housing stock is watered down. Row houses are always a good bet in DC because of their limited stock. Streetcar was always a dumb idea and you won't be making any money off that either way at this point, but the neighborhood's appreciation is based on a lot more than that.

Buying a house has always had a risky element so OP may not end up making money. But history and caution suggests she will be fine, and will be financially better off than if she had spent $40k a year on rent for the next 3 years for a similar house.

[Anonymous]

Thanks, pp.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Ha, not me. I just got convinced by how many people started chiming in that they are renting out a place. Just soIndia like the 'everyone is investor' problem. I hope no bubble, we just paid a ton for a house we plan to live in for a decade.

given that there are a lot of young people eager to rent group homes in transitional neighborhoods - because on the one hand couples looking to raise kids do not want to buy them, because schools, and OTOH because despite the building boom there are not enough units in well located multifamily for the young millenials - there have to be a lot of rental properties. Somehow the market has to incent people who can to act as landlords.

Of course if the regional economy crashes and burns, that shortage of units in multfamily will disappear, apt rents will decline, and the kids in the group homes will either move to the apts, or bargain for lower rents.

Jobs are shrinking here now, so those millennials will not be coming in droves. Doesn't have to crash just stall, and marginal neighborhoods will tumble with it.

Renting out to group home, ugh talk about destroying your property.

There is some serious sky is falling doom on this site. Back in 2005 when the market crashed, there were serious signs something was wrong: Friends were buying houses with zero down and fudging their mortgage applications - it was all standard stuff. The washington post wrote articles in every Sunday paper back then that there were major concerns about the long term stability of the market.

This seems very different. I have no idea what you are talking about when you say jobs are shrinking. Job numbers are going up very well - better than economists expected. Wage growth has stalled, except for "professionals" who have done well on wages even during the recession (i.e. the population buying in DC).

And the reality is that despite the massive housing crash in 2008, DC weathered it quite nicely with the best close-in neighborhoods seeing gains during that period. We sold a home in Columbia Heights bought at the peak and sold 7 years later for 35% appreciation. Nothing spectacular, but we walked away with a six-figure gain.

As others have said, these close-in neighborhoods that are designated as the next "it" location see prices only go up after thousands of condos are built (opposite of basic economic principles) because filling in empty lots with condos makes the neighborhood more valuable, even if the housing stock is watered down. Row houses are always a good bet in DC because of their limited stock. Streetcar was always a dumb idea and you won't be making any money off that either way at this point, but the neighborhood's appreciation is based on a lot more than that.

Buying a house has always had a risky element so OP may not end up making money. But history and caution suggests she will be fine, and will be financially better off than if she had spent $40k a year on rent for the next 3 years for a similar house.

The sputtering DC economy was discussed at length last month. http://fcnp.com/2014/12/17/federal-government-downsizing-sends-d-c-region-tailspining-fuller-reports/

Improving economics in rest of counteu actually hurt dc since the only real attraction is plentiful jobs; the high COL drives folks away of opportunities are elsewhere.

I am guessing the history you are referencing is te last 15 years in DC, which was a result of the wartime booms and flight to safety during financial crisis. The future will likely be different. And more condos don't always improve value, that is ludicrous. Huge swatches of FL would suggest otherwise. OP may be better off then renting assuming no near term crash, but she will be cash flow negative on just mortgage payment (not even considering taxes, maintenance, and vacancy) on an old house in DC (very landlord unfriendly); she would have been better off buying a home she planned to live in for the long term instead of taking a novice whack at Real Estate speculation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Ha, not me. I just got convinced by how many people started chiming in that they are renting out a place. Just soIndia like the 'everyone is investor' problem. I hope no bubble, we just paid a ton for a house we plan to live in for a decade.

given that there are a lot of young people eager to rent group homes in transitional neighborhoods - because on the one hand couples looking to raise kids do not want to buy them, because schools, and OTOH because despite the building boom there are not enough units in well located multifamily for the young millenials - there have to be a lot of rental properties. Somehow the market has to incent people who can to act as landlords.

Of course if the regional economy crashes and burns, that shortage of units in multfamily will disappear, apt rents will decline, and the kids in the group homes will either move to the apts, or bargain for lower rents.

Jobs are shrinking here now, so those millennials will not be coming in droves. Doesn't have to crash just stall, and marginal neighborhoods will tumble with it.

Renting out to group home, ugh talk about destroying your property.

There is some serious sky is falling doom on this site. Back in 2005 when the market crashed, there were serious signs something was wrong: Friends were buying houses with zero down and fudging their mortgage applications - it was all standard stuff. The washington post wrote articles in every Sunday paper back then that there were major concerns about the long term stability of the market.

This seems very different. I have no idea what you are talking about when you say jobs are shrinking. Job numbers are going up very well - better than economists expected. Wage growth has stalled, except for "professionals" who have done well on wages even during the recession (i.e. the population buying in DC).

And the reality is that despite the massive housing crash in 2008, DC weathered it quite nicely with the best close-in neighborhoods seeing gains during that period. We sold a home in Columbia Heights bought at the peak and sold 7 years later for 35% appreciation. Nothing spectacular, but we walked away with a six-figure gain.

As others have said, these close-in neighborhoods that are designated as the next "it" location see prices only go up after thousands of condos are built (opposite of basic economic principles) because filling in empty lots with condos makes the neighborhood more valuable, even if the housing stock is watered down. Row houses are always a good bet in DC because of their limited stock. Streetcar was always a dumb idea and you won't be making any money off that either way at this point, but the neighborhood's appreciation is based on a lot more than that.

Buying a house has always had a risky element so OP may not end up making money. But history and caution suggests she will be fine, and will be financially better off than if she had spent $40k a year on rent for the next 3 years for a similar house.

Not the pessimistic poster, but a three year timeline historically not a sound one. Typically, one needs at least five years of ownership to make make closing costs, etc . . Of course, recent years have had much better performance.

[Anonymous]

1. A decrease in federal spending will have some negative impact on the DC economy.

2. Even if the impact is mostly on jobs in DC (not at all obvious, if impact is heavily on DoD and contractors) that will likely be offset by continued shift in demand from suburbs to DC, as DC continues upward spiral effects

3. Neighborhood transition effects can dwarf region or district wide ups and downs. OTOH is H Street market not already past transition point now?

4. One would think large numbers of apts (not condos - total number of new condos is not that big) in H Street would drive down rents for groups homes, basements, etc. But has not happened yet. Why? A. Too soon - still lots of units in the pipeline or B. because the additional amenities offset that. Take the building with the Giant for example - bringing a new supermarket had more upside than bringing new units was a downside. You will see that again when Whole Foods opens.

5. I think the streetcar is a net positive for the neighborhood, and the neighborhood will be hurt if if never opens. But I think it will open, and we are seeing a lot of politics now in the discussion.

[Anonymous]

Anonymous wrote:
Improving economics in rest of counteu actually hurt dc since the only real attraction is plentiful jobs; the high COL drives folks away of opportunities are elsewhere.
I am guessing the history you are referencing is te last 15 years in DC, which was a result of the wartime booms and flight to safety during financial crisis. The future will likely be different. And more condos don't always improve value, that is ludicrous. Huge swatches of FL would suggest otherwise. OP may be better off then renting assuming no near term crash, but she will be cash flow negative on just mortgage payment (not even considering taxes, maintenance, and vacancy) on an old house in DC (very landlord unfriendly); she would have been better off buying a home she planned to live in for the long term instead of taking a novice whack at Real Estate speculation.

Have you actually walked on H Street, or in Trinidad, or Petworth or similar? Do you have any idea of the impact of vacant lots, vacant buildings, etc in making a place look and feel sketchy?

[Anonymous]

You made the wrong decision OP. Sell at a loss to someone who appreciates the neighborhood.

[Anonymous]

Anonymous wrote:You made the wrong decision OP. Sell at a loss to someone who appreciates the neighborhood.

Maybe a former 8 and H street gang member would be interested.

[Anonymous]

I bought on the Hill 2.5 years ago and still have buyers remorse, the house is old and everything we thought we could improve over time is ridiculously expensive. I can only hope to make it another 2.5 years there before we sell. While the neighborhood is awesome and we are zoned to a decent school, these old rowhouses are money pits. GL, I am sure it will work out for you since there is a strong rental market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You made the wrong decision OP. Sell at a loss to someone who appreciates the neighborhood.

Maybe a former 8 and H street gang member would be interested.

Are they also eager to shop at Whole Foods?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You made the wrong decision OP. Sell at a loss to someone who appreciates the neighborhood.

Maybe a former 8 and H street gang member would be interested.

Are they also eager to shop at Whole Foods?

The H Street Connection strip mall is getting a redo as well.

http://districtsource.com/2014/11/rappaport-expects-h-street-connection-redevelopment-2016/

[Anonymous]

You do know they are getting a Whole Foods?

[Anonymous]

Anonymous wrote:Op here. A lot of food for thought here. Piti will be around $3k a month. Rentable for $3300 in my opinion when I move out in 2 years. Once I put work in and make the basement legally rentable, I expect to be cash flow positive.

What about repairs & the cost of finding tenants, and covering any gaps in tenancy, plus don't forget that you have to pay taxes on the rent ... At $3300 you will break even if you get VERY lucky some years.

[Anonymous]

For income tax purposes you can get depreciation on the wear and tear.

OP, you'll be fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Ha, not me. I just got convinced by how many people started chiming in that they are renting out a place. Just soIndia like the 'everyone is investor' problem. I hope no bubble, we just paid a ton for a house we plan to live in for a decade.

given that there are a lot of young people eager to rent group homes in transitional neighborhoods - because on the one hand couples looking to raise kids do not want to buy them, because schools, and OTOH because despite the building boom there are not enough units in well located multifamily for the young millenials - there have to be a lot of rental properties. Somehow the market has to incent people who can to act as landlords.

Of course if the regional economy crashes and burns, that shortage of units in multfamily will disappear, apt rents will decline, and the kids in the group homes will either move to the apts, or bargain for lower rents.

Jobs are shrinking here now, so those millennials will not be coming in droves. Doesn't have to crash just stall, and marginal neighborhoods will tumble with it.

Renting out to group home, ugh talk about destroying your property.

There is some serious sky is falling doom on this site. Back in 2005 when the market crashed, there were serious signs something was wrong: Friends were buying houses with zero down and fudging their mortgage applications - it was all standard stuff. The washington post wrote articles in every Sunday paper back then that there were major concerns about the long term stability of the market.

This seems very different. I have no idea what you are talking about when you say jobs are shrinking. Job numbers are going up very well - better than economists expected. Wage growth has stalled, except for "professionals" who have done well on wages even during the recession (i.e. the population buying in DC).

And the reality is that despite the massive housing crash in 2008, DC weathered it quite nicely with the best close-in neighborhoods seeing gains during that period. We sold a home in Columbia Heights bought at the peak and sold 7 years later for 35% appreciation. Nothing spectacular, but we walked away with a six-figure gain.

As others have said, these close-in neighborhoods that are designated as the next "it" location see prices only go up after thousands of condos are built (opposite of basic economic principles) because filling in empty lots with condos makes the neighborhood more valuable, even if the housing stock is watered down. Row houses are always a good bet in DC because of their limited stock. Streetcar was always a dumb idea and you won't be making any money off that either way at this point, but the neighborhood's appreciation is based on a lot more than that.

Buying a house has always had a risky element so OP may not end up making money. But history and caution suggests she will be fine, and will be financially better off than if she had spent $40k a year on rent for the next 3 years for a similar house.

You forgot the part about how OP is planning to move and rent out the house, and rent elsewhere (presumably in a good school zone). While this may not be a disaster, it sounds like she'll be losing money even if the house appreciates, when you add in closing costs, moving costs, etc. Buying an H street house with small kids and planning to move and rent when they get to elementary school is just a poor financial decision.