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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I'm going to disagree with others on this.  Here's the decision trees:

- others are saying not to buy now unless you can plan on saving/earning a lot of money in order to trade up after several years.  So their implicit suggestion seems to be to save now and buy the larger house down the road when you can afford it.  But that logic still relies on you having to be able to save a lot of money, with child, in the interim, or have increased income. The reality is that DC close-in real estate goes up by around 5-10% a year. So if you don't buy now, and you're not planning on saving/earning more in the interim, you are definitely locking yourself out of certain neighborhoods for the long term.

- My experience is that it's a lifetime from the birth of a child to sending them to "real" school. Search this forum and you'll see a million people, including teachers, admit that most of the DCPS PK programs are going to serve your kids really well. And they're only getting more competitive through the increased interest in the lottery - so with exceptions in SE, the vast majority of PK programs are going to be great options.  And most teachers will say that even K and 1st grade at the "gentrifying" schools are probably fine as well. And a little secret that others have noted is that childcare costs are still really expensive when your kids are in free PK. You still have to pay for aftercare and summer care. I ran a spreadsheet and the cost differential between DCPS PK, plus after school high school babysitter (no classes or activities) and same babysitter all summer was only about $6000 cheaper than our private year round preschool for the year. So getting into a good free PK is not the be-all and end-all. Where it is useful is by trying to lottery into a good school in one of the three years (PK3, PK4 and K). That gives you three years to, say, lottery into Mundo Verde - which is a decent commute from a lot of cheaper neighborhoods.  So essentially you have a 6 or 7 year window from pregnancy to K (even later, if you only care starting in first grade) to live in the place you want.

- I would buy now where you can afford - target houses if you can, only because appreciation is likely to be better. I just checked and Eckington and Brookland have a couple places for $550,000 that look really nice. Save as much money during those years as you can -- which presumably is the same amount you'd be saving if you were renting (taking into account equity through mortgage payments).  Live there for 7 years, see price appreciation and either move into a better neighborhood, or use the interim to lottery somewhere good.

- We've lived in 6 houses in the last 8 years. We both work full time and my husband travels a lot. Not ideal, but I have no idea why people have a kid and then somehow find it impossible to move.  It's really not hard.  Espeically in town. [/quote]

Lord.  Where o' where to begin with this drivel.  While we appreciate your weighing in from the burbs/upper NW with your 10 year old, pie in the sky information, let's explore your post, shall  we?

[b]The reality is that DC close-in real estate goes up by around 5-10% a year.[/b]  No, it doesn't.  It over select period of years it may increase by that much but it just doesn't go up by that much per year.  There are no #s to support annualized, compounding increases to that effect.  Now it my go up, but the cost to buy 2 homes involves transfer/recordation taxes (x2) and moving costs (x2).  That alone is going to eat up a large chunk of projected increased costs.  And you are assuming they will have the cash to buy up while they still own their 1st home; that''s a large assumption. In this market you won't land a contract if it's contingent on sale of your current house. And RE goes up, generally, over time. But not every year. So what happens if the market is flat or comes back in 2-4 years when they want to sell?  Now they're going to have to come out of pocket. RE for anything shorter than minimum 5, but ideally 7 year time horizon is a bad move.  (And please spare us the "I sold my houses for x dollars gain" reply. That's true anecdotally, but not for someone who bought in 2007/8 and tried to sell in 2010/11/12.)

[b]That gives you three years to, say, lottery into Mundo Verde - which is a decent commute from a lot of cheaper neighborhoods.[/b] You show your upper NW/burbs colors there.  Those neighborhoods aren't cheap, just cheaper than upper NW. And not all of them. Cross into NOMA and things get expensive quick. And those are the neighborhoods (Petworth, NoMa, Brookland) that have run up the most over the last few years.  Appreciation will continue (I hope; I live there) but surely not at previous rates.

[b]We've lived in 6 houses in the last 8 years.[/b] Add up your moving and transfer/recordation RE agent fee costs and get back to me.  The math is what it is.  For every house in excess of 399,999 you paid 1.45% to DC+seller's fees of (at best) 5%.  What kind of gains are you realizing on a one year time horizon that aren't eaten up by 6.45% in costs (+moves, etc).

[b]I just checked and Eckington and Brookland have a couple places for $550,000 that look really nice.[/b] Information in a vacuum. Are they in good neighborhoods? 4 or 5 blocks can make a huge difference between gang riddled 1st NW and Petworth gentrified.  Does the OP need a Metro?  Who cares, you found pretty pictures!!!

[b]Save as much money during those years as you can -- which presumably is the same amount you'd be saving if you were renting (taking into account equity through mortgage payments).[/b]  I think that says more about your finances than the OP's.  If you don't understand why then I can't help you.

P.S. With what real estate firm do you work?[/quote]

Wow crazy person. I'm the PP who you think lives in the suburbs. I don't, and I never have. I have a long string of ownership in and around DuPont circle, Columbia Heights (our starter house in the early 2000s) and most recently right off logan circle. I am as urban as they come, and haven't lived in a suburb since I left home at 18.  The neighborhoods in which I've lived have all generally seen price appreciation of 10% a year or more, save for stalled appreciation (but not depreciation) during the recession.  And I don't understand why you think saving money is going to be so much easier while renting than buying. Mortgages go into your equity - which is de facto saving. And the eckington houses I listed may be a terrible block (not sure) but it is 2 blocks from a block where I have several friends whose houses are all worth over $1m. That's how you make money on real estate - buy on the crappier block that is bound to improve in aesthetics over the next 5 years, do some basic and cheap, but pretty upgrades, and sell for a gain. Duh.

PS haha jokes on you - I've done some nice upgrades to every house I've owned in the last 10 years (some of the moves I mentioned were into rentals while we renovated) and in every case, I've made about $150k above and beyond the purchase price/reno costs by selling after 2 years.  [/quote]

6.45% (minimum) in transfer costs every time.  No one: not a real estate agent, title agent, etc. would tell you that buying and selling every 15 months is a good plan.  That's not "how you make money".  Who's crazy again?[/quote]

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