Illustrated by Nicky Chopra.
Jessica Church and Dan Appenfeller were ready to undertake the rite of passage that many young people undertake: buying a home. (That list also includes having kids, getting life insurance, and getting a Costco membership.)
Unfortunately for Church and Appenfeller, and every other American who these days enjoy the idea of owning their own form of shelter, the housing market has been insane to say the least. .
When a couple from Dupont Circle (Church, 32, a politician; Appenfeller, 30, a journalist) started looking for a condo in DC, they quickly became disillusioned. According to Appenfeller, the prices were “quite unreasonable,” and many of the buildings they considered had HOA fees “infuriatingly high,” Church said.
two people who love hiking Shenandoah National Park There Church was driving back to DC from the weekend when he turned to Appenfeller and asked: Wouldn’t it be kind of insane if our first mortgage was on our second house right here?
Probably not.They started hanging out and bought a cabin last February stunnersville, virginiaThey got a 4 bedroom, 2.5 bath, 3,000 square foot, 5.5 acre land for the sweet price of $495,000. (For comparison, a one-bedroom, one-bath Adams Morgan apartment is obtained.)
Their job requires them to be in DC a few days a week, and they aren’t ready to leave the area permanently, so they rent a 2-bedroom, 2-bathroom basement apartment from Dupont and live full-time. . They Airbnb his Virginia cabin for the weekend to help pay the mortgage.
Church and Appenfeller are part of the trend. First-time homebuyers in metropolitan markets like DC are frustrated by the lack of affordable housing and are ready to build capital and get their first homes in cheaper markets. while continuing to rent in the city.
This is because mortgage rates have risen, housing inventory is low, and prices remain relatively high. All of this means that buying your first home can be very difficult. National Real Estate Association Report, the lowest percentage the group has ever seen. The median age of a first-time buyer rose to 36 during this period, a record high.
There’s no data specific to the propensity of first-timers to buy second homes, but economists at Zillow named it one of the trends for 2022. Real estate trends to watchMeanwhile, the proportion of people buying homes in small towns and rural areas peaked last year (29% and 19% respectively). According to the NAR report.
Of course, remote work and low interest rates have allowed more people to do this during Covid.But Bonnie DaSilvaAn agent who worked with Church and Appenfeller to purchase cabins in Virginia, she said that since 2015 there has been a growing trend among young people to consider homebuying from an investment perspective rather than finding a primary residence. She appreciates that young buyers are becoming more educated about real estate, buying options, and wealth-creating opportunities. “Ultimately, they see these purchases as an investment vehicle for the future.”
This trend does not come without problems. Some buyers may not be ready to take on the risks and hassles of maintaining a home that is hours away, while others may not be able to pay their property manager. DaSilva said these properties aren’t primary residences and may be subject to capital gains tax when sold, so they can’t take advantage of the first-time homebuyer program.
Additionally, outside buyers entering the cheaper market could eventually drive up prices in the area and displace current residents, said BrightMLS chief economist. Lisa Sturtevant: “It could lead to more housing crunch for residents of more affordable, more remote jurisdictions who don’t have the income that people in Washington D.C. have.”
It could also exacerbate wealth inequality in the Washington area, she notes. Because by doing so, those who can afford to avoid high prices (and who can afford to pay both rent and mortgage) will be left behind by those who cannot afford to be left behind any longer. Sturtevant expects first-time buyers will continue to look for creative tactics as reasonable pricing options remain scarce.
MORE SPACE, MORE BREATHING ROOM
Jamie Manning, 33, who runs a digital media agency and real estate platform bare brick DC, purchased its first home in 2021. $325,000 2 bedroom, 2 bathroom home Charlottesville— a two-bedroom, two-bathroom Navy Yard apartment about two hours away from where she lives with her husband full-time.
The pandemic made Manning realize he needed more square footage and outdoor space. The couple could have maxed out their savings on a DC townhouse for more space, but the current market has made Manning uneasy. We gave her the space she wanted at a price that offered a breather room, plus extra money for the renovation.
The couple spends about a week a month at this property and are considering renting out a day so they can purchase a larger forever home in either DC or Charlottesville. “Many people our age have more flexibility thanks to remote work and want to build wealth and invest in real estate,” she says. “And she said DC is a really tough place to do that, given the price.”
Alex Alterman was a pioneer of this movement. solomon island 2016. The 43-year-old realtor continues to rent full-time at Dupont Circle. He bought a house in Maryland with his $525,000. For this price he could get a property with 4 bedrooms, 2 baths, a pool and a beach front. “I couldn’t afford the things I really wanted in the city,” he said. [with] It could be a terrace, an outdoor space, or a row house with a garden,” he says. “This was the next best thing.”
Not yet ready to move there full-time, he still loves city life, but makes several home visits a month to get the space and quiet he craves. The price allowed Alterman to spend about $125,000 on renovations. Zillow currently estimates the home’s value at about $774,000. “People always want to have their own place,” he says. “If it’s not available in the city and they can’t do that, they’ll look outside.”
rewrite the story
Church and Appenfeller are based in DC for now, but may eventually make their home in Stannersville home and have a small studio in the city. “[In the summer of 2021,] It probably took us three to five years to be able to buy a home in DC,” says Appenfeller. “But interest rates are crazy now. Who knows?”
Both were initially apprehensive about circumventing the traditional story of buying their first home. You’ve probably heard this from your baby boomer parents. Save up, buy an affordable starter home in your 20s, eventually sell it and use the proceeds to buy a bigger home and repeat. .
“If you grew up in the middle class, there are a lot of signals that show you the right way to stay financially secure,” says Appenfeller. “And the idea of breaking the rules and saying, ‘Vacation he’s going to get House,’ felt a little spoiled and getting in trouble.” (Their parents were also somewhat confused, Church said. say.
But Alterman points out that you can also liberate yourself from stereotypical narratives and do whatever works for you and your budget. conduct. This is how I make myself happy and build my future. ”
Church and Appenfeller drive to their cabin, perched on a small mountain, with a large front porch overlooking the Blue Ridge, close to wineries and hiking trails, and plenty of space to entertain family and friends. It has been. It seems like a dream come true. Church said:
This article is January 2023 Washington problem.