Like going to Neiman Marcus to buy $50 Manolos
...not going to happen. Well, maybe, on-sale, size 10, scuffed and in some hideous style.Warning this is a rant, and despite the beginning, not about shoes.
Yes, there should be affordable housing, and young people starting out should be able to buy into the American Dream. However, the vibe I'm picking up from a few segments of the population is that at least 900+ sq ft of move in condition fee simple/condo housing in approved hoods (read nothing but NW) should be in the price range of a GS-5 step 1, which would be in the $70K-$100K range. The likelihood of finding such, is pretty much the same as finding those $50 genuine Manolos.
A now defunct non-profit once offered wonderful first-time home buyer classes that helped me become a homeowner. One of the lessons I learned from the class was that getting the house is the easy part, keeping it is hard. Some of y'all are too caught up on the gettin', thinking all will be right. Furnaces die, roofs leak, drains clog, and when you are a homeowner, there is always something. And something starts at $500 and goes up from there. If the stress is stretching the financials to get a house, then when 'something' happens and messes up another 'something' (overflowing toilet destroys carpeting in adjoining room), where is the money going to come from? Particularly with somethings that require you fix it that day or that week? So you skip that month's mortgage payment to fix the something, and you get behind, and something else happens and you get further behind, and then you're in danger of having your house foreclosed. Then there is plain old maintenance, which is on going, and while not expensive, could be annoyingly time consuming.
Even if a non-profit or exceedingly generous person were to provide a house/condo to a family at a low price there are other problems. Taxes. There are several generous programs to abate and reduce taxes for seniors, and low income persons. However, if you do not qualify for these programs and you live in an area where the properties are assessed in the $300K and up range, you're screwed. Taxes could run you $200 a month. If you pay your taxes late, there are high interest charges. If you don't pay your taxes at all the tax lien will be sold at auction and the buyer of the lien could foreclose on you. If you're in a condo, then there are the blessed condo fees. These can range from less than $100 a month to about $1000 a month, on top of your mortgage. If you don't pay it, well, it really depends on the condo board. Some will sit and stew and deny you services. Others will attempt to take your condo away.
So back to my poor GS-5 step 1 in need of affordable housing. My advice is to become a GS-9. Short of or in addition to that, first clean up her credit and reduce her debit so she can get a better mortgage. Second, save up for the down payment and closing costs. Get a second job (preferably at a place where you won't blow the paycheck on the merch with your employee discount -- a mistake I made) to help with that short term goal. Third, shop the neighborhoods you can afford. There is a lot in NE and SE DC for under $250K. I'm partial to NE, because there are a lot of hidden gems near the MD border, cute little bungalows and rowhouses needing some love and attention. Third, shop around for a good mortgage and first-time homebuyer programs. Lastly, the house you do buy is not necessarily the one you will live in forever. You may trade up in the future. You may move. You don't know what life will throw at you (divorce, kids, new job relocation, etc) so keep that in mind.
When I bought my house I was making about $35,000 (I'm guessing it would be above $40K in todays dollars). It appeared in ok condition (learned later that wasn't the case) in a sorta not so great neighborhood. With the help of a loan from the DC Housing Finance Agency, low interest rates, excellent credit, a re-finagled student load payment, a tax abatement, and $10K saved up this single black woman was able to buy her skinny little plot of the American Dream. Seven years later I live in a much better neighborhood and a much better house and my address never changed.
So it irritates me when people say that it is impossible to buy a home. Hard yes, difficult maybe, but not impossible. The market has come a bit more to its senses and you have a better chance of finding that affordable house. So kids, save your pennies, clean up your credit, and do your homework.
Labels: housing
posted by Mari @ 27.2.08
3 Comments:
You are so right. I hear so many people bemoaning the cost of housing. But all of DC is not expensive. In fact, large parts of DC are quite affordable. Almost all of Congress Heights, Anacostia, and large parts of NE are very affordable. Plus, you get more bang for your buck there. The tradeoff is the relative safety. But if you check the police reports, there are robberies and murders everywhere. What I have found is that much of the crime occurs among criminals. Innocent people rarely get shot or seriously injured.
Relative safety... feelings of safety... and other random risk factors.
But please anon comments need IDs, initials, something, or else the next one gets nixed.
When I decided to move from a rooming house, I did not have a penny. I needed $500 down payment plus insurance and inspection money. Since I am a veteran, I did not need a down payment, I did not have credit,which was a good thing back in '97. I borrowed the cash necessary to purchase my little row house on 5th street. So I agree with you, where there is a will, there is a way. I suggest potential buyers to go to Anacostia, and other parts of Southeast, great bargains over there. However, I am attached to my place on 5th Street and I am still there. Everyone on my side of the street has sold or moved, but the rentals of small rowhouses as mine can bring in $2300-2500 a month. Only thing is, one can not expect to keep a tenant for very long.
James Brice
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