Also, look at the Washington Post 's website's real estate tab. Through it you can get historical prices that properties sold for. For example, 2 BR condos in Pentagon City (22202) that sold in the high 100s in 2001 went for double in 2003 and by 2005-2006, they were in the mid 500s and more. Now, i may not know a bubble when I see one, but Washington DC metro prices would appear to have been in a bubble and probably still are. I'd say that they have another 10-15% drop left as a general rule of thumb although some locations may be exempt (such as West End DC).
My suggestion to you is, rent, don't buy. Lets use your figures. You are looking for a property of about 500,000. Put 20% down and you have a mortgage of 6% on 400,000. Add tax of about 1.5% annually on 500,000. That's 31,500 annually just in interest and tax. In addition, you'll probably need to put in 10,000 in improvements (as you probably won't get a perfectly pristine property). Now lets say you have to sell in 3-5 years because you are moving again. If you sell for 500,000 you'll have to pay the broker 30,000 based on 6%.
So, instead of spending 38,000 annually (forget the tax break, the tax break is for suckers...at best you'll save about 10% from your interest and tax payments), spend the same amount or less on rent. That way you don't need to worry about the continuing to fall real estate market which will stay low through 2010.
Look at this way. If you were buying last year and you had bought, your home today would be worth less. The DC area real estate market shot up by 50% + from 2002 through 2005. The recent drop has not expunged the excessive gains yet. You are better off renting, watching prices fall further and buying in a year or two. You could end up recouping all your rent payments for the two years through lower prices later.
I specialize in the under 750k price range in DC and Alexandria. There are certainly interesting and eclectic properties throughout the region in your price range. If you'd like to email me more details on your criteria, my address is email@example.com. Check out my profile page here on Trulia for more information. Best of luck!
A couple of areas to strongly consider are the town of Clifton and Occoquan.
Here's the Wikipedia link for Clifton: http://en.wikipedia.org/wiki/Clifton,_Virginia And here's a link to the town's website: http://www.cliftonva.us/ Basically, Clifton is a small, historic town 25 miles from Washington. It's definitely historic, eclectic, unique, and a great place to live. (Well, as far as I can go as a Realtor in saying that!) It's not overpriced, but it's not super-cheap, either. It's not international, though being only 25 miles from DC, there's no problem picking up as much international elements as you want.
Occoquan is a little bit further out in Virginia. In some ways, it's similar to Clifton--a small town feel, nice place to live. It's maybe a bit stronger in the "eclectic" element. Here's a link to Occoquan: http://www.occoquan.com/ And here's the Wikipedia link: http://en.wikipedia.org/wiki/Occoquan,_Virginia
Both of those would be good places to start looking.
Hope that helps.
You may want to check out Southwest DC. This quadrant is unique in its abundance of mid-century modern architecture. Stunning barrel roof townhouses can be had in the upper-$300s to mid-$400s depending on renovation.
Check out a couple of virtual tours:
The Washington Metro Area can be daunting if you do not have someone to guide you through the many neighborhoods! The good news is that with the change in the market, homes have become more affordable and sellers are more willing to negotiate and give concessions.
It must be tough moving here from Southern California, but this is a great city too! I would love to be the one to introduce you to it. Please feel free to contact me via email firstname.lastname@example.org and please visit my team's website http://www.enggarcia.com.
I hope to hear from you!
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