Go east of the river.

Renovated townhouses can be had there in the low $300s. It's not the greatest area but it's also not nearly as bad as its reputation. It's also very conveniently located if you work downtown and is a short Uber from nightlife spots.

I was born in 1991, paid way through college and law school. Just bought an okay condo in Fairfax City and have lousy commute on bus to Metro because I have no car. Still saving so I can keep the condo and move closer in with salary increases and bonuses.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You buy something...say, a townhouse in a growing neighborhood and build equity. Sell in 5-7 years. Use equity and savings to buy a small house. Renovate and live there or sell and move on up.

Buying houses is a long, slow, lifelong grind for the middle class. It's certainly not impossible, but it's not super fun either.

Foolish! You don't build equity in 5-7 years generally. The cost to buy and sell a house will eat up 6% anyway. You will make only tiny principal payments in 5 years anyway. The house may appreciate or it may not. It's too little time for equity building

Agreed. People saying 5-7 years are giving terrible advice.

This depends on location. My husband and I bought in a very popular neighborhood (Del Ray) and sold 4 yrs later with an 80k profit. Then we were able to buy a larger home for less than we paid on our first house (albeit a bit farther out).

And to the OP, my DH and I bought when we were both 25 (born in 87). We lived together and budgeted well. We were both on Fed salaries. We were able to save enough for a down payment on a 500k town house and still had a healthy savings left in our bank. It can be done.

Anonymous wrote:Fed is rolling back QE AND raising short term rates.

Will be interesting how this plays out. Good luck millenials. Join us in crappy TH in undesirable hoods, its your only hope...

https://www.nytimes.com/2017/04/05/business/economy/fed-minutes-interest-rates.html?_r=0

Unless it's a repeat of 2008 in which case save your pennies kids!

Anonymous wrote:

Furthermore, it's been public policy in recent years (most egregiously post-2008 fin crisis) to move heaven and earth to keep housing prices AS HIGH AS POSSIBLE! Think about that: the government works to make a fundamental human need as expensive as it can. When you understand that this is concurrent with policies to suppress wages as much as possible, you should see this as a very bad situation.

Can you explain a little more about these policies- who is making these decisions and what is the mechanism that carries them out? Thanks!

Bank bailouts, conservatorship of Fannie/Freddie, and QE. 37% of home purchases were made by investors last year. Yeah this is sustainable.

Fed is rolling back QE AND raising short term rates.

Will be interesting how this plays out. Good luck millenials. Join us in crappy TH in undesirable hoods, its your only hope...

https://www.nytimes.com/2017/04/05/business/economy/fed-minutes-interest-rates.html?_r=0

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You start small and build equity, and then you trade up. That's how most people do it.

Oh, and you don't get granite countertops the first time out of the gate.

NP but granite countertops are like $3500. Chump change compared to housing prices.

Yes but chump change adds up. A condo I once owned now sells for $350k. Those granite countertops are 1% of the cost. Pick out a few more "upgrades" and pretty soon you are talking about serious cash.

Part of the problem with the kids today (rolls eyes at self) is that they want it all, now.

Yes, that 5% is the problem, not the doubling of housing prices. Get real, over a 30 year mortgage that is like $50 bucks a month. It's not about granite countertops. Let it go.

OP, I am absolutely sympathetic. Things are crazy expensive in DC now, and if you come with student loans and no family help, the numbers in 2017 bear no resemblance to the stories of woe about the kid who graduated in 1993, bartended to pay for school, and "scrimped" for all of 2 years and then bought a house that appreciated 3x within 8 years. Those days are done. You have nothing but sympathy from me, and the back patters on this site are delusional if they think their fortune comes only from their own hard work and smart choices. Statistics and data say otherwise.

All that said, when I moved to DC in the late 90s, this city sucked. Adams Morgan and Dupont Circle were essentially exactly what they are today. Then you had a handful of restaurants up by the National Cathedral. And Georgetown. And the same strip in Glover Park that exists today. housing was quite a bit cheaper, but still decently expensive in the nicer parts of town. Jobs were not flashy, and the options were much more limited than today. You had government workers, and associations and nonprofits, and embassies. A few government consultants and contractors. But in general, most people were tied to shitty government salaries. It wasn't the booming economy it is today. There was almost no private industry, and none of the salaries that went along with them. Law firms were tiny little offshoots in the 90s with salaries in the 5-figures. In 1995, there was no concept of gentrification. No one was moving to 14th street and making money, because the idea was lunacy back then. There were no cute gentrifying neighborhoods where prices were lower. So there were a lot of people making $50k living in a small, dull town with very little to do. We used to live in Dupont, and people used to regularly go up to cactus cantina by the cathedral because it was "a restaurant". People used to line up for hours at Two Amys. There were two places to get an after dinner drink downtown: John Harvards and Harrys. Can you imagine that now?

The point of all this is: We were able to buy houses on much lower salaries yes. And maybe enjoyed price appreciation. But it wasn't a super fun, trendy city back then. If your primary concern is just being able to buy a house (which is the only thing you complained about; you weren't complaining about not enjoyed price appreciation), then I'd suggest leaving the DC area. Go to Baltimore. Or philly. Or somewhere in the southwest, or Tampa, or Raleigh. Sure, those are all smaller, less interesting towns. But they all look a lot like what DC looked like 20 years ago (cost of living, traffic, typical salaries, job opportunities).

Furthermore, it's been public policy in recent years (most egregiously post-2008 fin crisis) to move heaven and earth to keep housing prices AS HIGH AS POSSIBLE! Think about that: the government works to make a fundamental human need as expensive as it can. When you understand that this is concurrent with policies to suppress wages as much as possible, you should see this as a very bad situation.

Can you explain a little more about these policies- who is making these decisions and what is the mechanism that carries them out? Thanks!

Anonymous wrote:OP, I feel for you. Not only does being born in 1990 disadvantage you, but in reaching out for help and commiseration, you've been on the receiving end of a torrent of self-congratulatory nonsense.

Real estate is all about windfalls. If you bought decades ago around here you got not only massive price appreciation, but inflation paid for most of your mortgage. If you didn't have to pay for college and/or got help with a down payment (many do!) you were in position to buy much earlier and avoid the later price increase.

Furthermore, it's been public policy in recent years (most egregiously post-2008 fin crisis) to move heaven and earth to keep housing prices AS HIGH AS POSSIBLE! Think about that: the government works to make a fundamental human need as expensive as it can. When you understand that this is concurrent with policies to suppress wages as much as possible, you should see this as a very bad situation.

I don't doubt that some of you have 'worked hard', but please don't conflate your luck in life with virtue. Lots of others have worked even harder and it hasn't worked out so well.

+1

Save as much as you can and buy during the next bust. Worst time to buy is during a seller's market.

Anonymous wrote:

Anonymous wrote:You start small and build equity, and then you trade up. That's how most people do it.

Oh, and you don't get granite countertops the first time out of the gate.

NP but granite countertops are like $3500. Chump change compared to housing prices.

Yes but chump change adds up. A condo I once owned now sells for $350k. Those granite countertops are 1% of the cost. Pick out a few more "upgrades" and pretty soon you are talking about serious cash.

Part of the problem with the kids today (rolls eyes at self) is that they want it all, now.

Timing is everything for sure. The real estate market shipped has sailed for younger people around DC anyways, but I that is not the only option. There are plenty of other investments and real estate markets to invest in. The ONE thing you have on your side is a young person is TIME. Time and the right investments can be golden.

When I graduated college in the 1980's, got a job, paid off my student loans and saved enough to buy my first house by age 25 with no help from parents. It seemed like a lot of money to me. I had roommates for years to help with the mortgage so I could have a cushion of savings. My parents were never in a position to help me. So I had to buy my own cars, vacations, homes and even paid for my own wedding. It's OK, I am fine financially anyway. You will be too.

OP, I feel for you. Not only does being born in 1990 disadvantage you, but in reaching out for help and commiseration, you've been on the receiving end of a torrent of self-congratulatory nonsense.

Real estate is all about windfalls. If you bought decades ago around here you got not only massive price appreciation, but inflation paid for most of your mortgage. If you didn't have to pay for college and/or got help with a down payment (many do!) you were in position to buy much earlier and avoid the later price increase.

Furthermore, it's been public policy in recent years (most egregiously post-2008 fin crisis) to move heaven and earth to keep housing prices AS HIGH AS POSSIBLE! Think about that: the government works to make a fundamental human need as expensive as it can. When you understand that this is concurrent with policies to suppress wages as much as possible, you should see this as a very bad situation.

I don't doubt that some of you have 'worked hard', but please don't conflate your luck in life with virtue. Lots of others have worked even harder and it hasn't worked out so well.

My younger sister was born in 93. She graduated 2 years ago. Our dad made sure she didn't graduate with any college debt. For the last 2 years, she's been working as a consultant and living at home. She is gone S-H so it's not really living at home so much as having a place to send her mail, do her laundry, and crash on the weekends.

Her client is located in a lower cost of living city. She negotiated a corporate transfer to that city. She will be living with another co-worker in the new city. Meanwhile, she is saving up money for a downpayment. What she doesn't know is that while she was living at home, our dad charged her rent. That rent will go back to her to help her with her downpayment when she's ready.

Make sacrifices, people.

It has precious little to do with generations, but with the ability to accept sacrifice in this world of instant gratification. I was born in 1980, and lived in a crappy one-bedroom for 10 years with DH before we were finally able to afford a tiny house in a desirable neighborhood with good schools. Both kids were born while we were still living in the apartment.