Is 2008 the right time to buy real estate in Arlington VA or elsewhere in Northern Virginia -- For You?

I’m going to answer that question with three more questions:

1) Do you have a need?  You have to ask yourself what is driving your need to purchase a home.  Maybe your job has moved to DC and you would like to have more time to spend with your family by shortening your daily commute.  In that case moving from Centreville to Arlington may make a lot of sense.  It would make even more sense if you can take advantage of the Metrorail system in Arlington.  Maybe your salary has been increasing and you need a tax write-off.  In that case you and your tax advisor may decide that purchasing a home makes good financial sense.  

2) What is your timeline?  I advise potential homebuyers to continue renting if they are not planning to stay in the home at least 3-5 years.  Of course life is unpredictable and circumstances may change, but the initial plan should be to own the home for at least that much time.  Northern Virginia real estate prices increase an average of about 7%, per year.  This number is a little higher for Arlington real estate prices.  Some years are of course higher and some lower.  The longer you stay in the home, the safer your investment is and the greater your potential for return.  I would love to say that most of the buyers I work with stay in their homes for 10-30 years because it would almost guaranteed that they see year-over-year 7% gains.  Regardless of what the market is doing, if you buy a home in Northern Virginia and stay in it for a minimum of 3-5 years you should end up ahead.  

A quick sidebar:  When I say that homes appreciate by 7%, that is on the entire value of the home.  If it is a $100,000 condo in Arlington, that homeowner will make $7,000.00 in price appreciation on average each year even though she may have only put 5% ($5000) down to purchase the condo.  In the stock market if you invest $5000 and make 7%, you would only be looking at a $350.00 return.  

3) Do you have the finances?  This is a much easier question to answer than it has been historically.  Even with the tightening of financial markets in late 2007 there are still programs such as FHA, Bank of America Community Commitment and programs through Countrywide that allow buyers to own a home for close to nothing down.  That being said, there are limits to what you will be able to afford on a monthly basis.  I work closely with honest, reputable lenders that can work with you on a plan that makes sense.  I can then help you understand what that will afford you in today's market.   

Please contact me to discuss your individual goal and needs.  I look forward to working with you whether the right time to buy is next week or next year.