By Katie Bassett
Aspiring homebuyers in the DC area, like many in the US, are jumping over hurdles to not only buy a home, but find one too. Smaller inventories of starter homes and staggering price increases, and a potential federal raise on interest rates at least one more time this year could potentially push national home affordability to its limits.
Fortunately, with an increase in number of homes for sale, prices will drop moving into winter for home buyers in the Southeast DC area. According to Trulia’s most recent analysis, the starter home inventory jumps about 7% in the fall months and listing prices decrease roughly 4.8% by January.
For would be homeowners who could not find the home of their dreams this summer, here are five reasons you need to start house hunting in Southeast DC this right now:
- There is Less Real Estate Competition in the Fall
Fall is the off-season for real estate, meaning far less people are looking for homes. This provides numerous benefits for a homebuyer in Southeast DC – for starters, buyers hold the negotiation power and nasty bidding wars are far less likely.
Moreover, real estate agents have more time for their clients since their calendar begins to slow down from the hectic summer months. More availability allows fall homebuyers to be the center of attention who can build better rapport with their agent.
- It is Cheaper to Buy than Rent in Southeast DC
While it’s easy to believe renting is cheaper than buying in the DC area, data reveals the exact opposite. Looking at the DC metro, renters spend an average of $3,065 per month. While homeowners in DC only spend $2,891 per month on average.
The data holds true for popular areas in Southeast DC as well. When looking at Capitol Hill real estate, it costs $3,056 per month to rent while the monthly spend is $2,780 per month for homeowners. Over seven years that a Capitol Hill buyer could potentially save $23,184, plus, have equity built up in their home.
- Home Sellers are Serious
Some houses listed in the fall time have been on the market for months; others recently listed are usually being sold with a purpose (a new job or a life event). Regardless of the circumstance, it has been found that sellers tend to be more serious about the home buying process during this time of the year.
Therefore, sellers in Southeast DC may be more open to negotiating and accepting lower offers because of the time crunch.
- Redevelopment in the District is Causing Price Increases
Southeast DC is an older neighborhood that has gotten a major face-lift. Less desirable areas are now being eyed by developers and are considered huge real estate opportunities. New restaurants are popping up and houses are being renovated, which has become attractive to homebuyers. However, the endeavors are pressuring home prices.
Shaw, for example, was a neighborhood that saw direct effects from the 1968 riots that followed the assassination of Martin Luther King Jr. The recovery path for Shaw was not promising until the recent redevelopment efforts. Now, the neighborhood boasts variety of new amenities appealing to aspiring homeowners.
This spike in demand renovated homes near desirable amenities will drive home prices higher, which is why now is the ideal time to look for a home in these neighborhoods.
- Down payments are lower
Most people shy away from buying a home because of the down payment. While it sounds daunting, there may be a misconception.
A 20 percent down payment is no longer required; in fact, that average down payment right now is about 11 percent. This makes the home buying process much more affordable, especially if you’re a first-time buyer.
Katie Bassett is a freelance blogger who covers a wide array of topics within the real estate industry as well as overall lifestyle for millennials.