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Monday, July 27, 2009
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65 comments:
NY Times human interest story on "ruthless defaulters" on credit card debt with only one tidbit of real data in the whole thing:
"Bank of America has its hands full, with a June default rate of 13.8 percent, up from 12.5 percent in May. "
The pontificating may be highly anecdotal but it is entertaining...
Cara, is there any news on your house?
Here is one that was nicely redone and according to rumor has a backstory involving the owner and agent (I'll leave it to anielarke to post if she chooses):
contemporary updates
I'll be very interested to see if they get their asking price.
Ace,
No word yet. We figure showing a little patience is a good thing, since it's a short.
Holy moley they have a lot of shoes. It's a nicely redone place. I'm not seeing $924k, despite the fabulous range-hood, and upscale, yet non-gaudy bathrooms. But I don't know the neighborhood. The rooms all look pretty small for just under a million dollars.
Cara-
I also wouldn't mind having a wine cellar that large, particularly if it was full :-D I don't really know about the price. I think it would easily get 900 K if it was in N. Arlington near the metro, but it is in SE Arlington so it may be a little pricey. Either way I sure wouldn't mind living there
22202 is comparable to most areas of North Arlington that are close to the metro. It's a great location, with lots of well-kept houses, and convenient to everywhere (see frankly for prices of other properties in the zip). The only "downsides" are that the kids go to schools with a higher degree of diversity, a point that has been discussed here frequently, and that like 22201 and 22203 and 22209, there are a lot of condos and rentals in the zip as well as SFHs. I put "downsides" in quotes because those are in the eye of the beholder obviously.
I agree some of the rooms are small - also no upstairs laundry, no grassy part of the back yard, too few cabinets in the kitchen, and no garage. Also, that wine cellar is actually quite small - there aren't more bottles or space than what you see in the photo - but it's a nice feature and big enough for most people!
There were a ton of people at the open house.
ps keeping my fingers crossed for you, Cara, for the next x months!
Ace,
Hmm that's got to inhibit typing.
Thanks ;)
Ace-
Bummer on the wine cellar, they did a good job with the picture, because it looks like it continues on both ends. Although as you said it will probably be big enough for most people, it looks like it hold 150-200 bottles.
It looks very convenient to DC, but it looks like it would be much worse to get to Tysons/Reston from that area which when combined are basically the same size as DC for jobs.
HB,
Yes, there are better places to live if you are commuting to Tysons/Reston, etc. But if you work in the District, the Pentagon, etc., it is ideal, with shopping at Potomac Yard and Pentagon City and Old Town Alex. very convenient. That's why the prices are pretty comparable to metro-oriented parts of of North Arlington.
Ace-
Yeah I forgot about the Pentagon. I knew it was close to old town, but I can't imagine there are enough jobs in old town to really make a huge difference... But either way it sounds like the locations are pretty similar.
HB, remember also that there aren't a lot of SF homes in the zip (and in-fill only available for new homes) and sellers do not have to attract buyers from all over in order to support prices. There are also dual career couples who find it a decent compromise for those going to the MD base, for example, and others going west. I66 going west for a morning commute goes against traffic and is 10 minutes away or less from this zip (via 110).
Just for fun:
Check out picture #12 on this listing:
http://franklymls.com/MN7119347
Ace: Okay, you are forcing me to gossip. The owner of the house on 26th St. is a lawyer who worked for Franklin Raines at Fannie Mae and left under the same cloud. A divorce ensued from her DOJ lawyer husband. She now works on the Hill.
Also, there are plenty of jobs in Old Town with numerous small trade associations in the smaller office buildings, the International Chiefs of Police in a major office building and then larger government organizations like the Patent and Trademark Office, the Federal Court and U.S. Attorneys offices and all the law firms working with the PTO. There is also the sprawling Hoffman military complex just southwest of Old Town on Eisenhower Ave.
Tabitha, that is a gem.
Geez Ace..you smoked me out. I lived a couple of blocks over S. Hayes/23..we sold around 1990 as we were putting the for sale sign in the ground. No I can't remember exactly that was 3 houses and 3 long distance moves..they all blurrrrrrrrr. We made money, tho, lots but then lost it on the sales in La. and Ks so there you go. James and Sarah Brady lived a couple of doors down when we were there..yes, before and after the shooting. Gossip..their son was a little hellion. That place will sell close to asking price. Its a great place to live, easy commute, easy walk to restaurants/shopping/work, just a nice place to live.
Tabitha...I'd love for that owner to come to my house. We have never had a deer stalk us like this and we have been there years. She comes right up on the porch to eat all my plants..all my shrubs,begonia, pansies, petunias,hoysta, spirea, hydranga, okra, bell peper,tomato, GAWD you name it..chomp,chomp ..right down to the ground. We have tried sprays, soap even the caution tape..She is either a mental case or a genius, either way I want her dead. Yes, we are being stalked by a deer. She knows our cars and when we leave she ravages the yard.
Cara,
In a low interest rate environment, a 1.3% increase in defaults is a big deal. Most consumer lending is done with a 1-6% "gross margin" with 6% only applying to payday loans. So when BoA misses their default rate by 1.3% that's wiping out most of the true revenue (ie over the cost of funds and defaults) that pays the bills at the business.
Adam,
Thanks for the insight, but aren't CC's still a high-interest environment? At least for any customer who's missed a payment in the last 2 years? Does the fact that they're recieving Zero interest from all those customers who pay in full each month "balance" this out to a low-interest environment?
I guess a different way of putting that would be do you have a reference for the profit margins at CC companies?
Cara-
Yes credit card companies are still in a high interest environment. They have raised their rates on risky people and unprofitable people. So yes rates are still very high for most people. They have also significantly decreased unprofitable teaser rates. So their business will be much more profitable once things normalize.
CR new home sales
The first graph is the most telling one in my opinion. Yes, new home sales are up from May and continuing an upward trend, but boy are they tiny compared to the recent past. The drag on the GDP may be ending, but it's hardly a "rebound".
Cara-
I agree that it is not a good for GDP, but the low sales should help deal with over capacity in housing. It looks like a normalized sales volume is 700-800K so as long as we are at half that level it will help reduce the over supply in housing.
I also imagine that more houses are being scrapped than in the past as people get foreclosed and destroy the house past the point of livability.
I actually worry that in a couple of years house builders will not have picked up building enough there will be issues with a shortage in housing creating a mini-bubble until they can realign new construction with new demand.
Ace,
Well, the listing agent moved it to under contract while waiting for the seller to sign our contract... So, whatever that means.
I think the translation there is that the listing agent likes our offer, and thinks it stands the best chance of closing. Just cuz there's three other parties that need convincing, the seller and her bank, and then our bank on the loan... At least 3 out of 6 interested parties think this is a good offer (us and the two agents).
Cara, if you are U/C only the seller can accept the offer, not the agent. This short sale is between you and the seller not the banks. If it's listed as U/C, you are waiting for bank approvals.
Arkey,
We haven't gotten the signed contract back yet. The listing agent just doesn't want any more calls for showings.
Housebuyer,
I wouldn't worry about builders not ramping up building in time for new demand. Unless a huge number of them go under soon, they'll build, that is how they make money.
Cara-
Since they have very little equity left and they can not borrow, I am not so positive they will be able to build. We will figure that out soon. Cara I agree with Arkey that they have probably agreed to the contract terms, but just haven't signed and gotten the terms back to you.
Although I would also say that it is also between the banks. Obviously if they don't agree its unlikely the person will come forward with enough cash to make the deal go through. Goodluck though I assume you will probably find out fairly shortly.
arkey,
To clarify, the listing agent indicated that the seller has said she "plans to sign" our contract, just is being slow about doing it. Maybe she's not in easy faxing proximity, or has qualms with some particular clause, or something. But it looks more like a "under contract" than not... Maybe she's checking with the utility companies to see how quickly she can get them turned back on before agreeing to an inspection within the 7 day timeframe? Who knows? Could be anything.
But it's looking positive for now.
Cara, you need to talk with your agent. A realtor can't mark a listing as being U/C if the seller hasn't agreed verbally and signed the paperwork. There is a place for comments in the MLS to indicate an offer is being negioated to stop phone calls. The bank will either counter your offer, accept your offer or accept your offer and have the sellers pay the difference since the seller has already agreed to sell at your price and if they can't or will not pay the difference and the bank is unwilling to accept your price, you are back to ground zero.
housebuyer,
Yup, as you are acutely aware this is just step one.
arkey,
Good to know on the comments section, (although they may have been getting calls directly from buyers who can't see that field). But still, it sounds like this step is more done than not.
We shall see what the bank says. There are indeed contingencies laid out in the short sale addendum as to what happens if the bank doesn't accept the contract as is.
There are plenty of reasons this is nowhere near a done deal. I was half-relieved this morning when I saw it go U/C and thought someone had outbid us. It was kind of nice to think someone was willing to pay more than we are. And we could sign another 6 month lease and get our August back. (i.e. not tied up in the home-buying process). And we'd just wait out this last frenzied grab for the $8k 1st time homebuyer credit.
So, we shall see.
Cara,
That's the trick high interest rates usually mean high default rates. It's rare for a banker to have after his interest and default costs more than 2-3% to cover the costs of placing loans.
http://sec.gov/Archives/edgar/data/927628/000119312509105327/d10q.htm
That's Capital One's latest quarterly report. On page 49 they have the income statements from their US Card business. Note that rates declined from last year to this year, and NIM declined, but equally important was the increase in default rate from 5 to 8% that cut their pre-tax profit from 700m to 3 m.
Interest income and fee income dropped in sympathy with lower outstanding balances. I use Capital One because they do a nice job segregating card lending from other lending they do. I used to follow a very high risk lender (Compucredit--they finance many of those just out of bankruptcy cards) and while the interest rate charged (and more important fees) were rediculously high (around 30%) their true revenue (after defaults) was under 5% in good times.
Link cut off above.
Sorry about that.
I wouldn't worry about homebuilders. Believe me, if there is demand, someone will fill the vacuum.
Cara, I feel for you. Buying a home is a stressful experience when all goes well and its a normal sell. SS are for the "strong of heart". I hope it works out for well you and on the surface it sounds to me like your offer was solid.
Ace,
Perhaps at one point the condos/apartments in 22202 were a downside but surely they are an upside now. A lot of well to do people live in the condos/apartments in Pentagon City-Crystal City.
I'd say one of the upsides of 22202 is Pentagon City Mall-Pentagon Row etc. But one of the downsides of all those malls is you have to pay to park. So if I lived in one of the SFH of 22202 I'd want somewhere a little more north of the SFH you found. I'd just feel silly driving two minutes and pay for parking. But it looks like that house (at the bottom edge of that area) would be a bit of a walk up there and so would be annoying.
Also being further north puts you closer to the nice park and the Aurora Hills library. And most importantly -- closer to Metro!
Arkey mentioning that Jim Brady used to live in that area I think highlights how much more affordable that area used to be. Maybe Sarah Brady worked(?) but if they were just relying on Jim Brady's income it's clear it was not something that would've supported a $900k home (adjusting for inflation). Look at his work history here:
http://en.wikipedia.org/wiki/James_Brady
Most of his work experience was in the public sector. Now maybe in the 70s some of those jobs paid SES wages but even today an SES wage does not let you afford a $900k home.
Now pre-bubble I bet an SES could have afforded a SFH in 22202. Why the change?
Maybe some of you will be right that Arlington will continue to have these crazy prices. I've sorta given up and just accepted that I'm going to have a longer commute in Fairfax County when I buy a SFH. Luckily as Jeremy and others have noted prices are coming closer to reality even in the nicest Fairfax neighborhoods. I've always liked Fairfax County better in any event, but will admit that the distance to DC of Arlington is very tempting. But it's not worth my entire net worth and paycheck.
New disclosure rules go into effect July 30th
I'm thinking that since we'll have 7 days to apply for a loan after ratification, and that will still be well ahead of when the seller's bank would approve the sale, that we should wait until after the new rules go into effect before submitting the contract to our bank in an application, so that we'll get the same information from all lenders...
Am I crazy?
Oh and this listing confirms what Cara said. It shows the 2009 assessment and not 2008 confirming the websites use the assessment the year the listing came out.
Interesting disconnect here:
Original Price: $924,000
09 Tax A: $744,300
I presume the seller feels the disconnect is warranted given the 2003 upgrade. But that begs the question of why that upgrade was or was not included in the county's assessment. Presumably if it was a large change they needed a permit? If so, why doesn't the county make an appointment to come by and re-evaluate the home inside and out afterward. I know that's intrusive but I don't see why counties should miss out on 25% of the potential property tax revenue.
Arkey,
Thanks. I think I'm going to gain like 20 pounds eating junk from stress during this process. Hopefully I'll work it all off painting and moving and stuff. Or later on the fabulous walk/bike trails of Burke. :)
The Bradys moved into the Forest Hills townhouse community from a small house in South Arlington after Jim Brady was wounded. They did so because the townhouse has an elevator and it made it easier to move Jim, and there was also space for a caregiver. At the time the townhouses were in the $300,000 price range. Some may now be in the $900,000 range because they are quite large. The Bradys moved to a rambler in Arlington a few years ago. Tipper Gore still has her family home in the area.
TBW - keep in mind that in the 1970's the population in Arlington was in an out and out decline. Over 20,000 people left Arlington between 1970 & 1980, a situation that is oftentimes crippling to property values.
That very likely had something to do with the affordability of Arlington at the time.
I'm beginning to wonder if the $8k tax credit will not be renewed. We are about to have the August recess (which continues the first week of September through Labor Day). We know that universal health care is not passing before by the August deadline.
It seems safe to assume health care will dominate September and October.
Will there be much time to debate and pass an extension of the housing credit? It seems like the likely avenue would be passage via the health care bill. The health care bill will have tax provision changes and I presume they might just add on a rider extending the housing credit. Although will that make people uneasy because the housing credit lowers tax revenue and the last thing Congress will want is something attached to the health care bill that is not paid for under the pay-go rules.
Just thinking aloud out here. I still predict an extension but am lowering the odds from 99% to 65%.
tbw,
I think they could make time for such a short bill. But, I also think it a may not be extended if the stock market continues to do well and the new home numbers are spun to the bright side. There may not be much appetite for extending it. If there's a frenzy of buying activity in September/ October artificially making the picture rosier, they may not extend it. Even though NAR will argue that the only reason for the "recovery" in the housing market was this stimulus, such that it's extension is vital for the economy as a whole.
And then I'll feel really foolish for not waiting it out to see the aftermath.
I put the odds at 75% 1-year extension, 25% letting it sunset. Indeed a drop from 100% sure it will be extended.
CRT,
Okay but I think in 1998 (and not just the early 1980s when Brady moved in) a SES person could have afforded 22202. Now, not so much.
Who knows? Maybe the inner suburbs and DC will keep more of these bubble gains and expand. I'm skeptical but perhaps 40-50 years from now I'll take my grandchildren to Arlington and DC and tell them I used to live there. And they'll wonder how I ever afforded the rent. ;)
Although maybe they will be impressed grampa could afford a single family home in Fairfax County.
Or maybe Robert's predictions about this area will come true and after 10 years of owning a home the prices here will be even more ridiculous, I'll sell at a huge profit, and retire very early further south. ;)
TBW & Cara-
I think I am now putting the odds at less than 50% unless the housing market really starts to slow. We are really seeing a lot of signs of a bottoming in the housing markets(both in prices and sales). I think they are already have enough budget problems that if housing looks ok they will not pass it. If things start to stutter in 2010 they can always reinstate it quickly.
Food for thought -- I'm skimming through a lot of the Millionnaire Next Door (which I believe a few of you have cited before) on amazon.com. They sure let you read a lot of it online (although eventually cut you off.)
Anyway, they note a lot of people with high net worth have lived in the same home 30+ years.
I really wonder what percentage of people engage in move-up homes. How common is this really? I feel like I've known a lot of people who bought a home and stuck with it their entire working life. I do know some people who moved but not tons.
Given the costs of moving up: closing costs, realtor cuts in the sales price, *buying more things for the bigger home* it seems like it would be very, very hard for it to increase your net worth. The only time it probably worked like that was during the housing bubble.
Again, just thinking out loud. I'm constantly debating whether to buy a place that serves me now and for the next 5-10 years (then moving to a different place for the remaining working years) versus buying a few years later, a place not ideal for years 1-5, but ideal for years 6-30.
The book also is really bringing home the point that someone with a really fancy car is not necessarily wealthy. A point many of you have brought up a lot.
I get really frustrated when friends say "so and so must be doing quite well, he drives x." And I said "well if he bought x yes but if he got a car loan it just means he was willing to take on a lot of debt." Actually I usually just stay quiet. :)
Update about my friends who are trying to stay in their house where they are upside down by about $250K:
The bank "lost" their paperwork for the 4th time, so they are starting all over again.
Tabitha-
That is really unfortunate, I assume that basically means the banks just isn't interested in changing anything. They figure your friends are still paying so why spend time and money to let them pay less... I think this just furthers the case for them to stop paying.
They should stop paying because $250,000 is a lot of money. For most people (even in this relatively high income area) that is roughly 5-15 years of post-tax income. And more like 8-18 years once you include mandatory costs like, you know, buying food.
TBW-
It is interesting on whether you should go for what is better now or the future. I would personally say get what is good for the next 5 years. You have a much better chance of knowing what you want for 5 years than you do for years 6-30. Although it is really expensive to switch houses, the chance that you will still be living in the same place is not that high. It is also hard to predict if and how many kids you will have...
Honestly, I don't think I know of anyone with a move-up home. Those that moved-up started a job in a new city.
My grandparen's moved up from a shack to a 3br house 50 years ago. My parents moved down from a 5000 sqft house built in the early 1900s (with horrible insulation and hvac) to a brand new 4000 sqft house in the 1980s.
From what I can tell, most people stay in the starter neighborhoods. Its only those that dramatically move up the work ladder (e.g. moving up to management) that move up.
Nova-
I think it depends when the people first buy their home. A lot of people buy a house when they get married, which used to be in their early 20s. These people were very low on the working ladder and moved up once/twice when they could afford more and needed more space because they had kids.
My parents for example bought a 900 sq. ft. place in falls church when they were 22. After getting promoted from GS-7 to GS-11s in a couple of years they moved out to Burke and got a 3 bedroom town house. About a decade later my grandparents died they bought a nice SFH home in Fairfax Station
My parents for example bought a 900 sq. ft. place in falls church when they were 22. After getting promoted from GS-7 to GS-11s in a couple of years they moved out to Burke and got a 3 bedroom town house. About a decade later my grandparents died they bought a nice SFH home in Fairfax Station
How did your parents buy a house at 22? Where did they get the 20% down payment? Did the grandparents put down the 20%? I would think people buying at 22 is very, very rare (even today with looser down payment requirements.)
The people who did move ups did fall into the other categories NoVAWatcher and you note -- dramatic change in income (with some the kids were school age and the mother went back to full time work and/or either parent got a major promotion), inheritance from dying relative, and moved to DC area from another metro area and used the opportunity to buy a larger home (often because the move to the DC area came with a work promotion.)
But that only covers so many people. I think the rest stayed put most of their life partly because they rented during the more unstable years (20s).
housebuyer,
It is interesting on whether you should go for what is better now or the future. I would personally say get what is good for the next 5 years. You have a much better chance of knowing what you want for 5 years than you do for years 6-30. Although it is really expensive to switch houses, the chance that you will still be living in the same place is not that high. It is also hard to predict if and how many kids you will have...
That's why I would buy a place that has room for a growing family. So it would be too large the first few years (part of why I said not ideal) but I think eventually would be the right size. While there are many family size variables I am pretty sure I'm not going to end up with 4+ kids. If I end up with no kids I might think geeze I should've stayed inside the Beltway in a smaller home but I am almost certain I'm going to end up with a family.
The only other huge variable is where I would work. Maybe I'll end up getting a dream job offer in MD but otherwise I think my career is likely to be in DC or the Silver Line corridor in Northern Virginia. I think where I'm looking (Vienna/Oakton/Fairfax) is relatively convenient for any jobs around there. But maybe if I got a great job offer in Dulles when I'm 40 or whatever I'd want to move further out.
I agree it's impossible to guess all these things. I guess I'm taking this home buying thing too seriously but I've literally mapped out what I feel are the reasonable scenarios of where my life will go and I think it points to certain home structures and certain locations.
It's crazy but I can't think of any other way to guess what will suit you for the next 10 years (and frankly hopefully the next 30 years.)
The move up discussion is interesting. It would be interesting to see statistics on this. My hunch would be that in areas where housing cost:income is relatively low, you'll see more moving up. If you buy at $100K (which is currently about the median in some midwestern towns, even cities), you can trade up to a much nicer place for $200K without much transaction cost. But here, it takes such a huge jump up in price to get a house that is different enough from your current place to make the move worthwhile, and it costs so much to sell high-priced homes, to say nothing of the risk of price declines that are less likely to happen in more stable markets, that I would think a lot of people stay put unless they have to move for jobs or personal life changes.
I think it's good to try to balance the desire to build wealth and security with being willing to spend some money to live in the here and now. Life throws curve balls at you when you least expect it. You could fall in love with someone with 3 kids from a first marriage who already has a nice house. You could buy the perfect house and a horrible neighbor buys the place next door. You could scrimp and save to retire early and travel during retirement, then not have the health to be able to do so. You may be able to make more money or get better returns on your investments, but you can never regain lost time.
Cara, I really hope things work out with the house.
Tabitha, sounds like a passive-aggressive bank to me. I feel for your friends.
Anie and Arkey, I never realize my vast power to flush you out or make you talk :-)! Hmm, now if only I could use that power to find the right house and get the right price for it, while selling the present house on the same day...
HB, that wine cellar was climate controlled even though it was small. Very cool little touch...
TBW, that's absolutely true but the houses north of the one we've been discussing that are a bit closer to the metro tend to be smaller, and on smaller lots, not quite as well kept (that's a generalization, there are lots of exceptions of course). Lots of Cape Cods with aluminum siding. As a result the house values tend to be higher in the area of the $924K house.
One reason why some SFH homeowners do not view condos and rentals as being desirable is that the increased density may mean parking is tougher, and you have a higher risk of at least one jerk for a neighbor when you have a lot of neighbors vs. only a few. In addition, many renters do not take as good of care of the property as a homeowner because there is no incentive for them to do so, or the renters may be great, but their absent landlords won't (or can't) spend the money and time to maintain the property. So some people may not like 22202 as much as 22207 or Vienna or Oakton, for example, because it's more crowded or more mixed. But as I said, this is an eye-of-the-beholder issue so everyone can draw his/her own conclusions.
ps TBW, I meant to add that the 22202 houses closer to the metro tend to be labeled on franklymls as being in Addison Heights, versus Aurora Hills or Arlington Ridge. So you can see some photos, descriptions and prices and decide.
Ace Not to belabor the 22202 zip code, but another reason the Addison Heights houses aren't as expensive is that most of them are built on springs which run through the area. Many of the houses built in Addison Heights in the 1920s and 1930s were for the blue collar railroad workers from Potomac Yards (same is true for DelRay). At the time the low ceiling cellars were used for storing things, primarily food which had been canned or pickled, for the wringer washing machine, linen press or mangle (ask your grandmother about them) and for the workshop (when people actually repaired things). Therefore, the occasional water seepage was not much of a problem. You will still see today that many of the cellars in Addison Heights are unfinished. If you drive through the area, you might also see one bungalow circa 1935 and one brick house next door circa 1955. Many of the 1920s and 30s houses were built on double lots because land was cheap. As land values increased in the 1950s building boom, many people sold their side lots.
Ace,
Oh okay. Yeah I agree on-street parking becomes scarce once you are near dense housing. If you want a SFH where your guests will easily find parking don't buy a home in 22202, 22201, or parts of 22203. Even Cherrydale in 22207 is close enough to have trouble at times.
22204 might be just as tight once they finish upzoning Columbia Pike.
Frankly, I really question whether any portion of Arlington will be suburban in 20-50 years.
Interesting, anielarke, thanks! I looked at a house in Del Ray with a water problem and was told that there was a chronic water table problem there and now I wonder if it was the springs issue.
TBW, I think things could definitely go up in 22204 if Arlington does complete the trolleys and if they work well.
tbw, housebuyer, Ace,
Look at the census data to see the percentage of first time buyers versus previous owners and I think you'll see that moving is the norm, not the exception. I haven't looked recently, however. Just google ACS housing report or something.
It's laudable to try to consider every possible scenario when considering buying a SFH. But it's a lot easier to just buy something that meets your needs for the next 5-10 years, calculate in the costs of the transaction, calculate in that the price might go down another 10% and see if those costs are worth it to you either in a premium your willing to pay to own, or in savings over renting.
It's a lot easier to buy the right house for that future family when one is actually in sight. What if your future spouse works in MD? What if you fall in love but end up not being able to have kids, and for whatever reason decide against adoption? This seems like a much better joint decision, than "this is my wonderful house, you can move in here". That could be just me, I like joint decisions, but locking yourself into a SFH at the start of the next great stagnation in house prices, when you don't even know who your future partner will be, seems like a recipe for strife.
The easiest way to limit your losses is to pay less in the first place. If you buy a $300k TH you can only lose $300k. If you buy a $500k SFH that exceeds your current needs, you're paying out that much more every month for something you're not using.
But you already know this is my opinion since our bid is in on a place that's cheaper than our current rent, that will allow us the financial freedom to have my husband go to law school full time if need be, or one of us to stay home with kids, or both of us to reduce our hours and balance staying home between us. So, you already know that I value keeping costs low above all other considerations (within reason, we're not buying a garden apartment in Kingstowne though we could, nor a TH out in Centreville or Woodbridge).
Cara-
I agree and am planning on doing the same. We just put a bid on a different place which even if we never get a raise we could probably pay off in 8-10 years. We know this doesn't fit our long term needs aka we will want a yard when we have kids, but since kids are at least 5 years and probably closer to 10 years out we could easily not even be living in DC so we figured it was silly to plan that far into the future. Plus we are both busy so it is really nice not needing to do much yard work. There are some pretty flowers in the front and a patio in the back, but both combined should require at most 15-30 minutes a week.
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