Are you familiar with route 66, exit 71? It’s the exit that will bring you to Fairfax Dr. and place you among the hustle and bustle known as Arlington. It seems to be the most popular place to live in Northern Virginia. Not necessarily Arlington as a whole but to be more specific, Clarendon, Courthouse, and Ballston. Convenience plays a big role when you ask any of the residents. You’re going to find mostly a younger generation roaming the streets with their dressy clothes and Starbucks in hand. The young professionals prefer to walk out of the office and convene with their peers at a local restaurant or bar for Happy Hour. Did I mention convenience? There are 4 metro stops in North Arlington which gives people an option to ditch their car and go Green. The metro can take you right into the Washington D.C. to enjoy the sites on the weekends or prevent you from having to drive so you can enjoy the nightlife.

People are willing to spend up to $2,000 a month just to rent a one bedroom place. What does this tell you?  It’s the place to be and it’s going to be like this for a very long time. You have to wonder if any of these renters ever considered purchasing a home in Arlington. That $24,000 a year is just getting shoved into an abyss. Who would want to invest your money in a home so you can reap the benefits in the future? Certainly not Johnny who is notorious for racking up hundred dollar bar tabs and telling everyone to never buy a home, I mean he’s only 35 years old and has never owned a home. Since North Arlington is the most desirable place to live, it’s going to be on the expensive side. You’re looking at a 1 bedroom place for around $360,000. Yes, that is expensive but you’re placing yourself amidst the glorious surroundings and action of the city. Sure you could move 4-5 miles outside and find a 1 bedroom for $300,000 but you also can’t walk outside your home and be where you want to be.

If you’re thinking about purchasing in the N. Arlington area and will have no problems with the payments, you’re making a great investment. The real estate in this area is only going to get more popular. Home prices in this area have not seen a dramatic effect that the surrounding cities like Fairfax, Falls Church, Centreville, Chantilly, and Herndon have.

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Alright, if you have been on the search to buy a home, it’s time to buckle down and pull the trigger. You will want to lock in your rate now. The interest rates have spiked in the past 10 days and there is a potential danger that it could get worse. The average interest rate on a 30-year fixed loan has soared to 6.02% from 5.82% in just a week. The cause of this is the rising inflation fears that have sparked a jump on the long-term government bonds.

That means on a $300,000 mortgage, your monthly payments will increase $38 and the total interest on the life of the loan will increase $4,000. You can still get some good deals as there are a few lenders out there offering rates below 6%, but not many.

No one knows what is in store next, but if you find a reasonable deal, don’t think twice about putting a deposit to lock the rate in for a month or two if you are able.

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Knowing when to get out is one of the hardest decisions one has to make in a lifetime. What’s even harder, is knowing when to get in. I would have been rich if I had invested in Google, or if I had sold my home when the market was hot, or had got out when I was up $1000 in Blackjack. These are all situations that we regret and would love to go back in time to correct them. Whether it was greed, listening to one of our friends/family, or just scared to take the risk, we wish we had made the right decision. This leads me to my discussion of the housing market.

Have we hit the bottom of the housing market? I can’t tell you for sure but there are many hints that have me believing that we have. In some areas of Arlington, VA and Washington D.C., housing prices have gone up. This is shocking news to buyers out there. However, this is the truth. Most of the buyer mentalities right now are very relaxed. They believe they can take their time. In reality, they’re going to miss out of the market and catch it on the way up. Interest rates are below 6% and that is phenomenal. One of the biggest things that I see right now is that buyers are holding out for the interest rates to drop. I understand that we all want the lowest rate possible but a rate below 6% is a great rate regardless. It’s like saying I wish I had bought stock when it was $20/share instead you bought it for $25/share. Now the stock is up to $500/share. In the long run you made a great buy and it doesn’t really make that big of a difference.

If you are searching for a home right now, you’re witnessing the bottom of the market. In a few years from now we’ll all look back and see that 2008 was the bottom of the market and those who purchased then will be the wise buyers.

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Everyone’s taste is different when it comes to what they want in a house.  You can’t force someone to like the sponge paint in the bathroom or the colorful wallpaper you have in the kitchen, but you can easily make that fix.  However, switching the position of the staircase or moving the laundry up three floors is a different story.  Here is a list that will turn buyers away immediately:

Small houses
People nowadays want a lot of space.  Expect to get what other people are willing to pay for the space when you’re trying to sell the home.  If you can’t afford to increase the size of the home then you need to do everything you possibly can to make it look bigger.

One bathroom
When people are buying a home, they are usually upgrading from what they are used to.  That means that they don’t want to wait in line anymore for the bathroom.  The only time one bathroom is okay is in a one bedroom condo.

No air conditioning
Probably one of the greatest luxuries when the heat is unbearable is air conditioning.  It’s going to cost you between $10K-$20K to install central air if you don’t have it but it’s a must these days.

Spiral staircases
Of course they look good but let’s be honest with ourselves.  Who wants to carry a bed up a spiral staircase?  A bed isn’t even the hardest piece of furniture. 

Basement laundry rooms
We finally discovered that it would be more convenient to have the washer and dryer on the level with all the rooms.  Who thought it was a good idea to make a hike to the basement to wash your clothes?  People have come to realize that it’s all about convenience nowadays.

Popcorn ceilings
I don’t need to say much more other than no one is a fan of them anymore.  Just make the change.

Small master baths
The majority of the world is materialistic and they expect to have a big bathroom to go along with their big bedroom.  Even though you don’t sleep in your bathroom, it’s a complex buyers have come up with and there’s no prescription.

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30 yr fixed mtg		5.78%		5.87%
15 yr fixed mtg		5.36%		5.48%
5/1 ARM		5.31%		5.57%
30 yr fixed jumbo mtg		7.08%		7.21%
5/1 jumbo ARM		6.23%		6.31%

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Owning a home in Northern Virginia or Washington DC has been part of the American Dream. However, nowadays it’s becoming harder to live that dream. With the mortgage crisis, higher minimum credit scores, larger down payments, and mortgage insurance premiums (PMI) are becoming more common. Fewer home buyers are qualifying for mortgages and the up front costs of home ownership has steadily increased.

There are still programs out there for first-time home buyers that offer discounted interest rates and are more lenient on underwriting standards. The Federal Housing Administration (FHA) has a good program and it’s backed on income-verification and debt thresholds. There are also first-time home buyer credits out there. For instance, one program in Washington DC states: Taxpayers who have not recently owned a home in the District may be eligible for a one-time tax credit of up to $5,000 of the amount of the purchase price against federal income tax. In Virginia, the Home Stride program helps out first-time home buyers. Home Stride is a loan program available to first-time home buyers using a Virginia Housing Development Authority (VHDA) loan product for their first trust mortgage. Home Stride allows eligible buyers to borrow up to the lesser of 10% of the sales price or $25,000 to pay down payment and closing costs. Payments and interest are deferred for the first 3 years of the loan. After this deferment period, the interest rate of the loan is 5% for the remaining 27 years of the loan. The loan has no pre-payment penalties and can be paid in full at any time.

If you are a first time home buyer, it is recommended that you consult with a real estate agent. Buyers are generally not aware of FHA and VHDA loan programs. Who knows, these programs may help you get into the home of your dreams.

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