Many first-time homebuyers I encounter feel overwhelmed by the home-buying process. They often feel that they cannot afford to purchase in the DC metro area without becoming “house-poor” (a phenomenon where you spend nearly all of your monthly income on housing expenses).
They are correct that the DC market is competitive and high-priced, even in 2023. However, there are corners of the market that are still affordable and many financing options that allow first-time homebuyers to reach the dream of home ownership quicker than they might think.
In Washington, DC the most common type of property to purchase as a first-time homebuyer is a condominium. As of March 2023, we are seeing condos sitting on the market longer, with more frequent price decreases, meaning that a buyer is less likely to find themselves in a multiple-offer situation. There are also many co-op opportunities that typically come at a lower sales price. See last week’s blog “What is the difference between a Condo and a Co-Op?”
Maryland is particularly friendly for first-time homebuyers, waiving their obligation to pay state transfer taxes. Many buyers think that suburban Maryland is all sprawling estates, like those found in Potomac. There are many condo and townhome opportunities throughout Montgomery and Prince Georges's County.
Virginia is home to Arlington and Alexandria, which are historically popular neighborhoods for first-time home buyers. Apartments in Arlington are generally cheaper, and a bit larger. Townhomes in Arlington and Alexandria are more affordable than in the city (in general). The metro runs throughout Northern Virginia, making DC and the further suburbs accessible without ever getting into a car.
There are many financing options that allow low down payments (as low as 3.5%). Anyone thinking about buying should consult a real estate professional and a loan officer to discuss their options.
Jake Gaddis is a licensed Associate Broker in DC, MD, & VA with TTR Sotheby’s International Realty.