Sunday, February 26, 2006

Maybe Not A Good Time to Buy

I don't like admitting that something is scaring me from doing something, but it's definitely happened. A couple months ago, I was gung-ho about buying a condo here. That has changed dramatically. Whether it's the blog articles I'm reading (here and here), the real estate companies themselves forecasting bad times, or whatever, I'm frazzled. But what really got me: I'm sitting at my desk at work listening to Don and Mike or something, and I hear REPEATEDLY, an ad for some new condos in Alexandria, the Exchange at Van Dorn, and how they're for sale at $270K. But what got me is that a year ago, there's no way in hell a condo developer needed to advertise on the radio to sell a metro-accessible condominium. They had buyers lining up at their cheesy parties, just dying to lay down 5 grand to reserve a unit. And now they're reduced to running 20 ads a day shilling their condo projects. At that moment that I first heard the ad, I was done with the idea of buying a place. I'm not dropping 350 grand, financed with a risky mortgage, while interest rates are growing and growing, locking myself into living in the DC area for at least 2 more years, just to have the value flounder or drop. If I'm going to drop that much money on a place, I'd rather do it elsewhere and get something decent for my money. Which led me to do a quick survey of craigslist listings (actually I used housingmaps, the google maps version of craigslist. Great way to find an apartment) to see what exactly $350K will buy me in another real estate market. In probably a more attractive city. Here are my results:

Newport Beach, CA

I found a 3 BR house in Newport Beach, which is just north of Laguna Beach in Orange County. Very posh. Here is the craigslist listing:

Located in Bayside Marina Village is a 3 bedroom, 2 full bath home. Beautiful side yard...pets and friends welcome for entertaining. Very private and quiet neighborhood! Property includes 2 pools, exercise room, and 2 club houses. This well decorated home is a must see! It would make a great summer getaway home or permanent residence. Asking price is only $284,000! You can't find a better price in Newport Beach!

Seriously, this property is on the beach. Look! So yeah, for the price of a crappy 1 BR in Bailey's Crossroads or in a 70 year old building in the crappy part of Arlington or Alexandria, you can live on the beach in Orange County. Moving on...

Miami, FL
How about living in Miami for $280,000 on the bay with a great water view. 1 BR, 1.5 Bath and 831 square feet. And its on the water. Check the location. Now what would $280,000 buy me here in the DC area again? Oh right, a hellhole. Wait a second, a hellhole that is about to lose value, in a market that's about to bankrupt all the retards that got caught up in the condo flipping business just a year too late.

Chicago, IL

Now I'm not a big fan of Chicago, but this loft would seriously be like a cool million here. People are paying like 100 grand more to live in a building that brags about its "high" 9 foot ceilings. And then I find this, and its on the lake to boot. A full on, 1 BR loft selling for $309,000. Yes, you're still stuck with the Chicago weather, but for that loft for that money... it makes it tough to justify spending $300K to live in the Riverplace in Arlington which was built 60 years ago.

So yeah, that's my little unofficial analysis of real estate markets, which has really only made me realize more that there isn't much chance I'll be putting down roots here. It just doesn't make much sense. And we're talking about buying a crappy condo. Forget about buying a house. Do people realize how hard it is to pay a $900,000 mortgage for a new townhouse in Chantilly?!

If you are bored at work, look on It's pretty entertaining to just scan other cities and see what's available. Post on the comments if you find any particular gems.


At 12:11 AM, Blogger Andy said...

Don't give up hope...maybe this 'slump' is just a passing fancy of somebody with a crystal ball. My idea of owning a house is that if I can break even it will be OK. In DC the condo market cooled, but I think with a fixed number of places available that they will heat up. Would you want to buy in a hot market? Nooo..


At 12:39 AM, Blogger The Virginian said...

I used to believe just that. But for the short term, it doesn't seem like the supply is that fixed. I read that there were tens of thousands of condos under construction as we speak, to be released in the next two years. I was already thinking of living here short term, maybe 2 or 3 more years than move to the West Coast. In that timeframe, I'm convinced it is not a good market to buy.

At 11:40 AM, Blogger RoarSavage said...

Yeah. I love this city, but I'm not going to spend that much to lock myself into it, either.
Looks like the hype bubble finally popped.

At 12:57 PM, Blogger Tara said...

interesting--I'd never heard of housingmaps. I, too, am frustrated with the costs here, but I am waiting for everyone with their interest-only mortgages to go into foreclosure and then purchase the house for 1/2 price. At least that's the plan.....

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