Dear PoP – If You Had $150k Where Would You Look to Buy?

“Dear PoP,

Are there any recommendations you can give to 1st time homebuyer with a meager budget of 150k in dc?”

Ah, this is a challenging one. Personally, I would look to buy in the SW Waterfront. There are a number of developments in the queue, the new Safeway, the new Arena Stage and you’re right on the waterfront not to mention you are also close to all the SE development. In a very quick search I liked this coop located at 1311 Delaware Ave SW:

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The flier says:

“Check out the new kitchen, floors and paint in this lovely and spacious one bedroom on 3rd floor balcony with view. Southwest DC is hot – walk to Baseball, marina, golf, tennis, Starbucks, Safeway, CVS, Five Guys, Fish Market, Arena Stage. Riverpark is a gated Coop community wiht outdoor pool and fitness room. Fee includes property taxes and all utilities, extended cable package. Parking $35 mo.”

You can find more info here and photos here.

This 1 bed/1 bath is going for $130,000 ($573 monthly coop fee).

If you guys had $150k budget where would you recommend?

73 Comment

  • Agree about SW – had a girlfriend buy a studio, but a very nice one – in Southwest last year and she really likes it. Also, with all the Yards development in the works, looks like a great investment as well.

  • What perfect timing for thise post. I’ve got the condo-buying itch as well and can’t wait to read the comments!

  • Check out . You can get a new2 br for that price, and the condo fees are a lot lower than those 500 dollar coop fee. Plus there is up to $70k in downpayment assistance.

    • +1 for Ivy City. The neighborhood is sandwiched between Gallaudet University and the Arboretum. Affordable energy efficient homes are now under construction or rehabilitation by non-profit developers, Mi Casa, Manna, and Habitat for Humanity.

  • I saw condos for sell for 150k on Bladensburg Rd yesterday, about a two blocks north of H/Benning Intersection. Yeah its sketchy but you will be close to Streetcar when if finally opens in 2013. Walking distance to lots of things on H Street and also to Arboretum. There is also a huge new apt/retail site being developed a on the next block as well.

    • Those are the urbanlandcompany condos and would definitely be worth looking at. You can google their website. When I was looking 2-3 years ago they had some nice affordable options. They have a few buildings in Brightwood too which wouldn’t be a bad place to buy either.

    • I have seen these too. If I had a little more money, I’d consider buying one as a rental property. When Flats at Atlas is finished in early 2012, it’s going to be a whole different story for that stretch of Bladensburg.

      A short walk to H Street, and Jimmy V’s, the Diner and Sullivan’s Seafood as your neighbors. A Safeway practically across the street. Lots going for the areas around the Starburst Intersection.

    • good god, seriously? maybe I’m ignorant but from what I’ve heard of longtime residents there’s no way I’d live near benning unless I had a death wish.

      • longtime residents have a hard time seeing potential.
        they often think a place is currently much more dangerous than it really is, based on bad memories.

      • We live just south of Benning Road and it’s nowhere near as bad as people make it out to be. We lived in Columbia Heights and Petworth previously and honestly, it’s no difference whatsoever. Carver Langston might be a different story.

        Trinidad/Rosedale/Bladensburg/Benning etc are just like any other transitional neighborhoods– some people will see the potential and get in early, others will continue to believe that it’s bad rather than verify for themselves and miss out. Same as what happened around Columbia Heights, U Street, Pleasant Plains, Petworth, etc. It’s actually unbelievable that some of these areas are so close to downtown and still so affordable.

        • “It’s actually unbelievable that some of these areas are so close to downtown and still so affordable.


  • Bear

    The OP should also look into DC’s Home Purchase Assistance Program if he/she hasn’t already:

    The downpayment and closing cost assistance–in the form of a zero-interest, five-year deferred loan–got me out of the studio price range and into a one-bedroom condo. You have to jump through a lot of hoops to qualify, but the added stress up front is worth it in the end.

    • Bear, this is a great suggestion. It is a long process but I went through this program (HPAP) and was able to buy a quaint studio on Ust after 31k down payment assistance 🙂

    • Totally a great idea. A friend of mine got much more than she thought she could with this program. She’s in a 2br condo at 5th and Kenyon NW. Take advantage of every program you can!

    • Bear

      And I’ll add that the OP should also look into DC’s tax abatement program (if he/she meets the income requirements). Saves a bunch of money in closing costs and property taxes are waived for five years.

    • Because I’m having problems with the same agency that issues the HPAP, I strongly encourage against it if it can be avoided. I just got the low interest loan and now 10 years later they are coming back saying I got down payment assistance when I didn’t. They expect you to stay in your home for 15 years. Seriously look at the long term obligations, which they never mention up front. These things come with strings.

  • What really determines condo fees? Why does this place seem really high? Unless they have tons of amenities (pools, gyms, lots of elevators) – what does $573 get a person living in a 1BR condo? Just curious.

    • In that particular building, the fee covers taxes, utilities, grounds (including a playground and picnic areas), lobby and common rooms, building maintenance, doorman, outdoor pool, and gym. Since it’s a co-op, the building owns and is responsible for major systems (plumbing, electric, HVAC) and exterior. Plus, gated surface parking is super cheap. Add it all up and the sticker shock starts to wear off.

  • Even though the coop fee includes taxes, I still think $573 is ridiculously high for a $130K apt.

    Are you buying the place with cash? If not, I would not take out a mortgage at 5% to own an asset that might depreciate, or only appreciate 2% per year. Housing as an investment is dead–just ask the Japanese. Homes that were going for $300,000 in 1988 are worth $300,000 today. I would rent.

    • Not exactly true here, though. Though housing prices may not skyrocket the next ten or twenty years, there is plenty of reason to buy now in an area like SW. Do agree that the condo fee seems high, but that may also be negotiable.

    • Prices in 20010 keep going up… and it’s not the only zip with that trend.

    • I think most people would kill to get a house at 5% down in a risky market. All the financial risk is on the lender at 5% down. At 20% down, that’s where you have a risk of losing significant principle which is why the lenders require it.

      And you have to balance the downside in housing against inflation and the rise in rents. DC has rental control laws which make it a little more beneficial to rent, but not long term.

      Did you think this one through?

    • Japan of the late 80’s isn’t very similar to the US of today, economically speaking.

      2% is awesome. Inflation gets you a tax free 2 – 3% on average off the cost of your shelter in the first year after you buy. The annual savings compound, so the next year you save 2% * 1.02. In 15 years, you’d be saving 34% or more off of what your neighbor who rents does. (Compare that to buying gov’t debt like T notes, which today have a negative return after inflation. How’s that for a “risk free” investment?)

      You always have to put your money to work, because it depreciates over time due to inflation. If held long term, a home as an investment can reduce your annual housing expense up to 90 – 95%. Even if prices falter, after 30 years you’re home free.

  • SW is definitely the way to go. There are sketch parts, but by and large it is not bad at all and getting WAY WAY better. I saw that Station 4 is open now (PoP – you should check it out)and I have a feeling that’s only the beginning.

  • I’ve been in that building before. The coop fee, aside from paying your property taxes and utilities, is keeping the bones of that place from falling apart. It’s older, and definitely looks its age inside the common areas. You’re probably paying for a lot of necessary maintenance that’s due or coming up in that building’s lifespan.

    • ^not true.

      true, the fee pays all the basic bills but lots and lots of maintenance has been done in the past 5 years. sure it’s older… it’s called mid-century modern, built by a famous architect of that genre. very good deal imo. and a 5 minute bike ride to the capital. I live in the connected townhouses.

  • I dunno, that’s a tough call. I guess it depends on why you’re buying.

    Cost: Assuming 20% down and a 4.75% interest rate, your $120,000 mortgage will be $630. Condo and co-op fees will range from about $200 to over $500 depending on the association. You will also have real estate fees and closing costs, and probably homeowner’s insurance. Then there is ongoing maintenance and repairs. But will get some money back for first time homebuyer and interest tax deduction.

    Location: If you want any established or relatively convenient neighborhood, get used to living in a basement or shoebox sized unit. You can gamble on a potentially up-and-coming area, but condo units are probably priced appropriately so don’t expect an immediate ROI, if ever.

    So, the cost is going to be about the same as a moderate apartment in DC, and the location is not going to be so hot.

  • for some reason, it seems all of the condo fees in the SW are very high. i rented in a building on the waterfront a couple years ago, and the monthly fee was around $900. thankfully, i was not paying it.

    • Thats because they are mostly coops, not condos.

      Also, they are getting up there in age, built in the ~70’s, and they all have incredibly expensive things to maintain, like multiple elevators, pools etc.

  • Hands down, Trinidad. Or, if you dont mind going out of the city a bit, there are some very affordable and nice communities in PG that have been hit hard by foreclosures. Those homes are now 33% of the price they were in 2006.

    • I was really surprised by the prices in nice parts of PG — until I saw the property tax bills. Yeow, those are eye-watering.

  • Best thing you can do is buy a place somewhere in the city — closer in, the better. DC is experiencing reverse white flight, which isn’t going to stop. As more poor people move to the burbs (as they are in Fairfax and MoCo and other places), the more wealthier people are streaming into the city. Poor people get more for their money (or gov’t check) in the burbs, less crime and better schools. In turn, the wealthier who can afford it seek out the beauty, convenience and amenities of the city. Economic contraction will only speed this process as government support for the burbs and rural areas (think cheap gas and mortgage rates) declines.

    The comparison with Japan is inaccurate. It misses the point that we (the US) are turning into two countries — haves and have nots. Haves will live in the city. Have nots in the outer areas, aka poor belts.

  • Detroit

    • that property on Isherwood is a nightmare! Short sale! smells like cat pee! yippy dog barking! No light in the living/dining/kitchen! Cute block, though.

  • $150k? Detroit, Cleveland, kansas city?

  • I think if your budget is only $150K you really can’t afford to buy in DC. If you can get up to the 200-250 range you could look in Trinidad, Rosedale/Kingman Park, and Historic Anacostia.

    Don’t forget that once you buy the house, you have to maintain, which might cost more than you think.

    • very valid point but not 100% accurate. It takes time, but with A large dose of patience I purchased a studio condo btw U st & Admo for $160 less than a year ago 🙂 Good luck OP!! Stay positive and patient 🙂

    • +1. honestly, if my budget were 150 I just wouldn’t buy here. you give up mobility and freedom for something crappy in a crappy neighborhood. what’s the rush???

      • I say this as somebody who has happily rented here for 10 years because I can’t afford to buy.

      • if the notion of giving up mobility is at all an issue for you, then hell yeah, do not buy.

        if you are happy in dc, seen a lot of the city and imagine you’ll stay here, its not a bad thing to do.

        • but wouldn’t it be a better idea to save as much as possible for the next 5 years and then by a much nicer place with that down payment?

          • Not necessarily. If you are savvy enough and have the time to really get into the market, you can do quite well in DC. Most of the people I know who have really beautiful homes in DC moved up by selling one or more properties for a profit to afford the enormous downpayment.

    • There’s actually tons of stuff in DC for $150K in the condo/coop realm, and i’m working with some buyers looking in the 175K range in Deanwood (NE DC), and you can find super-cute totally re-finished houses with yards and porches and basements and multiple bathrooms for around that. If you’re willing to cross a river, or cross a Capitol Street, your possibilities really widen.

  • When you’re buying your first place, you’re probably young so I would focus on getting the best/most fun location you could afford. Also don’t fall into the trap of buying the darkest basement unit because you’ll have a hard time selling it later. Also remember if you’re in a great neighborhood you’ll have an easy time renting out your place if you ever need to move when the market isn’t good for selling. I looked in the Lanier Heights section of Adams Morgan (where I lived before I moved to Petworth) and there are a few studios in the $150K to $175K range for sale – that’s what I’d go for. Good luck 🙂

    PS. Petworth is awesome but I think better if you are looking for a rowhouse (150K won’t get you anywhere, alas) – most first time buyers here tend to be couples looking to start families.

  • I got a 1br that I’ll sell for 235k right around the corner from the RI Ave metro.

  • i would look in mount rainier for that budget.

  • That one looks like it has great potential. A fixer-upper studio is awesome because you could renovate it without spending that much.

  • I recently bought a place in SW and I love the neighborhood – also the metro is right there and it’s minute away from everything. I recommend you look at Potomac Place, studios from the $150s with low condo fees:

  • I thought coop fees usually included about 1/3 mortgage (or the total building mortgage)…when you break it all down its probably working out the same in total mnthly costs between condo/fees/taxes and coop/coop fees/taxes. The main reason that condo fees are high in SW is that the buildings have lots of amenities. ALl the big ones have really large pools, decks, full size gyms, doormans etc. that really adds up. the age of the buildings doesn’t help either.

  • What about areas near walter reed? With the plans to redevelop that area you could see serious increase in property values over the next five years.

  • As someone who lives in River Park (the SW building pictures), I can confirm it’s a great place to live. While monthly fees seem high, they really aren’t if you consider they cover everything: all utilities, taxes, insurance, and basic maintenance of the unit’s walls/systems. And the fees haven’t gone up in the 2+ years I have lived there.

    There are few other places where I could own my place (with a balcony) for that price and be so close in. Whenever people visit me, they are always surprised at how nice my place looks and what a great place it is to live — all for less than $850 a month. Seriously.

  • Brookland! Two large one bedrooms at 3000 7th St NE are going under contract for less than $100K each, 10 minutes to metro, super-retro building, near Castles (catholic U). Also, lots of stuff in Brentwood in that price range.

    • I’m going to be that guy and point out that 7th st. is in edgewood rather than brookland.

      Having said that, I think Edgewood might be the better bet for appreciation right now than Brookland is. The CUA South Campus, ArtSpace, and EYA developments are all going in on that side of the tracks and should be built out and occupied within the next couple years. And the location you pointed out is probably more like 5 minutes to the brookland/cua metro, rather than 10. That’s definitely an area worth considering.

      Brookland itself, on the other side of the tracks, is mostly detached houses with some townhouses and duplexes. There aren’t many condos or coops, though there are a few by the Yes and San Antonio Grill that would certainly be worth a look.

  • There are 1 and 2 bedroom coops in upper petworth near the fort totten metro for this price. You would be on red and green lines. Close to takoma, silver spring and Columbia heights. We live there now and it’s quiet safe and convenient. Check out two different buildings with units for sale in 5200 block of n Capitol street. Also. Hampshire gardens is nice.

  • depends–do you want more proximity to services, or more house/land? If the former, Southwest is good. If the latter, historic Anacostia or Congress Heights.

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