The seven paths to DC-area home ownership

[Anonymous]

Anonymous wrote:$156K is a good salary for the region. $375k on that salary is too conservative. Even with a 5% mortgage and 0 down, 30 year fixed on that is $2k a month. Add in 350 for taxes and insurance and you are looking at only 18% debt to income ratio, *FAR* shy of the 28%-33% ratio that most people subscribe to. Using 28% as a ratio, your "affordability" figure jumps to about $580k, which can buy you a nice townhome in Fairfax, or even a single family in some of the older but still nice neighborhoods like Burk.

I am not a Realtor, just someone who has done enough of these types of calculations to know when people are over/under extending themselves.

This is just what I was thinking. You are being too conservative. Remember that you will also realize some tax advantages and that you are no longer "throwing money away." While you may not see huge returns on your property, you will see something when you sell it.

[Anonymous]

Anonymous wrote:Your list is good. We left the DC area for the reason that the cost of housing was not an obstacle we could overcome and we had a decent HHI also.

DC area is a better fit for those with significant upward income mobility. If your wages are stagnant, it's a good reason to move elsewhere. If not, then the opportunities offered by this area greatly outweighs the high cost of living.

[Anonymous]

Anonymous wrote:Anonymous 11:19 wrote:

8. Tolerate living in an older/smaller/shabbier home in an otherwise good location. (This is a subset of #3, I guess.)

I wish, but I think that train left the station a while ago. Any houses, regardless of condition are snapped up in bidding wars if they are in good areas. In fact, the smaller they are the more voraciously they are sought because the starting price point is usually more affordable (and hence the bidding up).

But of course the definition of "good" areas changes over time. When I got here in the early 90s no one wanted to buy in Adams Morgan-- forget Shaw or 14th st or Cap Hill past 7th st.. Now I have friends buying in Michigan Park or Brookland. And similar stuff happens with suburban MD (or I bet Va. but I know that area less).

[Anonymous]

Anonymous wrote:$156K is a good salary for the region. $375k on that salary is too conservative. Even with a 5% mortgage and 0 down, 30 year fixed on that is $2k a month. Add in 350 for taxes and insurance and you are looking at only 18% debt to income ratio, *FAR* shy of the 28%-33% ratio that most people subscribe to. Using 28% as a ratio, your "affordability" figure jumps to about $580k, which can buy you a nice townhome in Fairfax, or even a single family in some of the older but still nice neighborhoods like Burk.

I am not a Realtor, just someone who has done enough of these types of calculations to know when people are over/under extending themselves.

We had a lower combined salary than you and purchased a home for $537K with 3.5% down in 2009. 4.5 years later we make a tad more than you do, but have two kids in daycare now. We manage just fine. We don't have the discretionary income that others do, but as you said there has to be some wiggle room in your expectations for the DC area.

[Anonymous]

Paths #8 and 9:

Silver Spring MD or somewhere on one of the MARC train lines in MD that takes you to union station.

[Anonymous]

#8 Move to PG.

[Anonymous]

OP here.

Your #3 encompasses pretty much everyone, even those with family help, high incomes, and down payments.

Sure everyone makes compromises, but that's not what I'm talking about here - at all. When I refer to 'undesirable area' I don't mean settling for Logan Circle when I want Dupont. I'm talking legitimate differences here. See the areas where $375k gets you in the door. That's what I'm talking about on the safety/housing stock front.

[Anonymous]

Anonymous wrote:Hey! Stop whining. You chose the life and career path. Should have gone big law and married big law and you'd be able to afford it.

Oh, Lord. Such whiners would STILL have something to whine about. I know, how about if it is so bad here, and homeownership is so important to you, do what so many are doing and look elsewhere? I am not begin snarky. It beats resenting your own life and everyone you encounter.

[Anonymous]

We make $160k. We saved for 2.5 years at 50k a year to get a 125k down payment on a 650k home. It's possible and doable. Live within your means. We also spent 10k a year on fancy overseas trips and have paid off cars.

[Anonymous]

My DH and I have a modest HHI. We live in PG county. We love our neighborhood. We don't feel like we sacrificed in the ways you enumerate in your post. Our neighborhood is not high crime, has plenty of amenities, and we are happy with the schools.

We definitely live in the suburbs, but our commutes are reasonable. The worst traffic is actually the traffic I hit downtown, which would be unavoidable.

I would advise against the PP's recommendation to go higher. Even if you buy a newish home, there are always unforeseen costs to home ownership. You don't want to overextend yourself and leave no room for the unexpected.

Best of luck to you.

[Anonymous]

You make almost exactly what DH and I make. We bought a house in that brief time between bubble and bust--the tail end of 2006. We are in DC in a neighborhood that is still "transitioning," I guess, but is actually great. (Atlas District) We probably wouldn't be able to buy here now. But there are other neighborhoods where we would be able to buy something--not polished, but fine--that are probably about where our neighborhood was 7 years ago.

It isn't easy, that's for sure, when your income is what ours is. But it's possible. Find a place that feels like it could be home, give it a lot of thought, consider your priorities. In the meantime, save, save,save for your down payment.

[Anonymous]

yeah, OP. it sucks. you are not alone.

[Anonymous]

Anonymous wrote:OP here.

Your #3 encompasses pretty much everyone, even those with family help, high incomes, and down payments.

Sure everyone makes compromises, but that's not what I'm talking about here - at all. When I refer to 'undesirable area' I don't mean settling for Logan Circle when I want Dupont. I'm talking legitimate differences here. See the areas where $375k gets you in the door. That's what I'm talking about on the safety/housing stock front.

$375 will buy you a nice house where I live, and there is less crime here than in Logan Circle. And yes, I live in PG County. It's a pretty big place, though. So while I'm sure you've written it all off as "undesirable," there are plenty of safe, affordable neighborhoods. I don't feel like I've "compromised" or "sacrificed," but I'm also the kind of person who doesn't buy in to prejudice and stereotypes.

[Anonymous]

12:03 here: If I were you, I'd seriously consider Cheverly and Hyattsville. I really like them both. I love living in DC but those little old houses in Cheverly are so cute, and the pool is wonderful.

[Anonymous]

You hurt yourself by renting for so long in such an expensive neighborhood. I'd suck it up and really start saving. Since you rent, could you move to a cheaper rental in a neighborhood you are curious about? You're certainly not going to be buying one of the few homes in the West End.