Anonymous wrote:Did you feel like the price of your house was insane, but you bought anyway? We have a small 2BR and 2 kids and we refuse to pay the $250k more that it would cost to upgrade to 3BRs in our area. Let's say we could probably do it, but I just don't think its going to improve our lives all that much to justify the cost.

So it got me thinking -just wondering how many people buying houses in this area are resigned to the cost feeling like 'too much' for what you get and buying anyway vs. you feel like these prices are fully reasonable to pay.

When we bought people thought the house prices were nuts. It was 1997.

I feel like our house was much too expensive, but the prices are not going to ever decrease so much that I feel differently. If I rented for 2 years and paid about 50k in rent in that time, even if home prices dipped by 50k I would break even. So, I just did it. I figure I will work and pay off this house and then I can leave it to my kids and that gives them a place to live that is safe, with good school, solid all around.

OP -- do you own your home? If so, and you are content in your 2 bdrm., then that is wonderful! that's more money you have to save & spend on things!

I have two kids and wanted more space. We sold our 3 bdrm and bought a 4 bedroom that is nicer/bigger. New house cost about $150k more than what our old home sold for (different locations). To us, it was worth it. The school district is better so our kids can go to public. The neighborhood is much nicer and I definitely appreciate the extra space. Our income over time is increasing so it makes the mortgage payments within reason.

There are no other choices other than rent (does not make financial sense for us) or leave the area entirely.

There's no other option outside of moving away or renting. We also own a second house in another state that is twice as big as our current home and also much nicer even though that house case much less. Most of the homes here are old and unattractive in my opinion. When my family comes from out of state I sometimes feel self conscious about my house even though it wasn't cheap at all and we've made a lot of improvements.

Anonymous wrote:"Prices are nuts" is meaningless. All that matters is how prices compare w/SFO, NYC, and other affluent areas.

That doesn't matter to me - because I'm not living in those other places.

We just bought. We did worry some about bubble, but here's where we netted out as a result:

- We bought in DC in an area that has already seen gentrification, but we think still has room for further improvement due to nearby projects. (on the border between Hill and Hill East, not too far from H Street) We knocked out areas like Petworth, Riggs Park and Woodridge over worries about a downturn. We knocked out areas like Glover Park and Cathedral Heights as less likely to see appreciation.

- We got a very low interest rate - and locked it in.

- Our new mortgage is equal to our old rent. Even if home value stays flat, we'll still be building equity at a monthly rate that isn't a stretch for us.

- We bought a very livable, but not 100% updated house that we can grow into over the long haul. We'll make decisions about how much to improve and how long to stay somewhat depending on the market.

- We bought just before the spring season kicked in and so far it looks like we got more of a '15 price than a '16 price. (prices are definitely up from last year)

We'll see how it pans out. But that's how we made the call.

Yep, our house rents for the same price as our mortgage (including property tax), so it made sense to buy since we had a decent down payment. Meanwhile, the property value has increased 110k since we bought it in 2011. So, it should pay off.

"Prices are nuts" is meaningless. All that matters is how prices compare w/SFO, NYC, and other affluent areas.

Meant renting is expensive here!

Anonymous wrote:We bought in MoCo, in a not as great section school wise, but it's what we can afford and the neighbors and neighborhood are ok. It's not our dream house or even the house we would really like, but it costs slightly less than the rent we were paying and we had the necessary down payment.

Not sure how the house will do if the prices go down again, but the area we bought in has not recovered (and may not ever recover) to 2005 prices. We bought because it is still better for us than living in a smaller rental and we were already losing 24,000+ in rent every year while sitting on our down payment, waiting for a decent place to come up for years.

I just had to accept the reality that the house we bought is what we can afford in the DC metro area, and go from there.

At least it's better than our rental, and at least we have a tax deduction, and at least we have some land to separate us from irritating noisey neighbors. So, we decided that even if we break even at best, or lose some money at worst, it is still probably better than paying a landlord 24k+ a year to pay off the mortgage on his townhouse.

That's the problem. Where are you going to live if you don't own? Renting isn't expensive here and for us was more expensive than our current mortgage. It's not like you can easily rent a three or four bedroom apartment for a family. I've seen one home rent in our neighborhood and it was more than our mortgage. It makes sense to rent for a while when you're single or don't have kids. But if you need a two bedroom or more you'll pay and arm and a leg.

We bought in MoCo, in a not as great section school wise, but it's what we can afford and the neighbors and neighborhood are ok. It's not our dream house or even the house we would really like, but it costs slightly less than the rent we were paying and we had the necessary down payment.

Not sure how the house will do if the prices go down again, but the area we bought in has not recovered (and may not ever recover) to 2005 prices. We bought because it is still better for us than living in a smaller rental and we were already losing 24,000+ in rent every year while sitting on our down payment, waiting for a decent place to come up for years.

I just had to accept the reality that the house we bought is what we can afford in the DC metro area, and go from there.

At least it's better than our rental, and at least we have a tax deduction, and at least we have some land to separate us from irritating noisey neighbors. So, we decided that even if we break even at best, or lose some money at worst, it is still probably better than paying a landlord 24k+ a year to pay off the mortgage on his townhouse.

OP-

Prices have been up, up, and away since the mid to late 90s. Sure there was the crash but things picked up where they left off. I'm talking DC and the surrounding counties. ie not Frederick, Fredericksburg, Hagerstown, etc. Sure prices could lull or even go down, or you could be waiting 20 years from now for that to happen.

Anonymous wrote:Did none of you live here in 2005?

I'm the poster above who is buying a close in townhouse, and yes, I remember. My brother still has the house he bought in an exurb with a zero down, interest only loan hanging over him. I'm hoping that with a big downpayment and conventional financing that in the long term (10+ years) we will be ahead of renting, but who really knows. I am anticipating some kind of correction in the next few years, but we need to live somewhere, so...

Did none of you live here in 2005?

Anonymous wrote:

Anonymous wrote:While you pay a lot inside the beltway, you are also a bit more inoculated against market shifts too. This area is very steady with housing. People are always moving and buying and selling here. Especially with good commutes downtown. This helps a good amount of housing keep it's value, even when other areas have bubbles and crash. Yes, during the 2008 madness, people are here lost value too. The further out you were, the worse it was. Some of those areas are still recovering. But inside the Beltway recovered much much faster.

You pay for that kind of security too. If another recession hits, people who live in beautiful colonial SFH that cost $300k will be much more effected than those who live in $800k colonial in this area.

So it's not just a straight "this much money buys this much house" calculation.

Um, no. The high end is what falls first in a recessionary environment. There's, you know, less people with that kind of money.

In 2008-09, Manassass, Herndon, Lorton, etc lost 1/2 the value. In the inner suburbs (e.g, Vienna) prices dropped 20%.