In the DC area we were lucky enough to have gotten through the National mortgage crisis a lot quicker than those in many areas across the country. While there are still some foreclosures in the outer suburbs, for the most part DC and the close in Northern Virginia cities have rebounded quite well.
Even still, many potential home buyers might still be sitting on the fence. While the Mortgage crisis taught the useful lesson that you should not view real estate as just an investment, it doesn't detract from the fact that living in your own home is not just "The American Dream", but it is also a financially savvy long term decision.
If you know that you will be living in the DC area for the next 3 to 5 years and you are qualified to buy a home, now is a great time to buy. In most cases you can buy a home for less than it would cost you to rent the same home.
If you put 10% down on a $350,000 condo, your payment at 4% interest will be about $1500 per month. Add taxes and insurance plus a $250 condo fee and you are still under $2,000 a month. Most rentals
Assuming that you are paying roughly $12,000 a year in interest, and you make $60,000, than you will only be taxed on $48,000 for the year. Of your $24,000 paid toward your mortgage, you will get a tax break on 1/2 of that, or $12,000. If you rent the same place for $2,000 a month you will not be getting a tax break, but you will be spending the same $24,000 with nothing to show for it at the end of the year.
Now of course you will have to pay to maintain your home, but with a home warranty you will have extra insurance during the first year. Of course over the years the cost of maintenance will be a factor, but hopefully your condo will be increasing in value, thereby giving you equity in your home which is yours to keep.
If you live in your condo for 10 years and spend roughly $240,000 on the mortgage, condo fees and insurance, and your condo is valued at $375,000, than that $25,000 in equity would be yours to keep, all for about the same price (and much less after taxes) than the price of renting.
So the age old answer to the question "when is the right time to buy a home" of course depends on your financial situation and long term plans, but in many cases the answer is "right now!" Living in the Northern Virgina / DC area gives home owners the advantage of being in a historically strong real estate market that benefits from our great job market, that includes the Federal Government, Military, tech, government contracting and education.
Our Northern Virginia / DC real estate market has been very resilient over the years. To give you an example, the house where I grew up in Alexandria was about $70,000 in the early 1970's and now it is very close to $1M dollars! NOVA / DC is a great place to live and work!
Of course the benefits of home ownership are not just financial. You get a strong sense of personal satisfaction from owning your own home. You can furnish it in your own fashion and rest easy at night knowing that you are the king of your castle!
If you are unsure of what homes are out there that might work for you, or if you need help with financing, it is great to start by getting in touch with a Realtor who can walk you through the whole process of buying a home. You can reach me at INKrealtor@gmail.com.
***Please remember that Realtors are not accountants or lawyers, and if you want any such advice you should seek out those specific professionals to answer your questions. Realtors are not licensed to give financial or legal advice!***