Reply to Are these H St. NE / Capitol Hill houses priced appropriately?

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[quote=Anonymous][quote=Anonymous]Timing is everything in real estate. If you try to sell while a recession is looming, you've to be very lucky to make significant profit.

To be realistic, residential homes shouldn't be seen as investment properties. When you need a home, you pick the best one in your price range, you live there and sell it when you need to. If you are lucky, timing works and you make some profit or at least not have a loss. [/quote]

This. A house can still be a good investment even if real estate prices don't skyrocket if you approach it this way. Buy a house in your price range with a mortgage you can afford, it serves as a forced savings mechanism that you live in. If you get a fixed rate mortgage, this inoculates you from rent increases and allows you to more easily financial plan because your housing costs are steady. Even if you sell for what you bought or just a bit more, you will still build equity as you pay down your mortgage.

The problem with this area is that people have gotten used to massive real estate gains. There are people who bought row houses before 2010 that have double in value even without renovation. Some have even tripled -- I know people on the Hill who bought back when it was not considered a desirable neighborhood for families and paid 200k or even less. Their houses are easily worth 800k now, if not more. They weren't geniuses. They were in the right place at the right time. They had a little saved and steady jobs (not even high paying jobs, you can afford a 200k mortgage on like 60-80k a year, which if you are a couple means you could easily do this on teaching or non-profit salaries) and a willingness to live in a neighborhood with weak schools and some crime (i.e. most of DC). They got a windfall. Good for them, but this isn't a sustainable buying strategy for your average first-time buyer in DC.[/quote]

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