Desirable Locations, Expensive Prices: Is Buying A Home Impossible?

When someone finally identifies a geographic area that they really like – where you feel comfortable and happy, where you could see yourself wanting to stay a while – it makes sense that you might start thinking about the possibility of buying vs. renting. But what if the place where you live (Alexandria, VA) happens to be included on the list of America’s 5 Most Overpriced Suburbs? Obviously you’re not the only person who wants to live where you live, and real estate prices reflect that.

Barbara Corcoran, real estate expert and TODAYShow.com contributor, had this to say:

Alexandria is just outside D.C. and considered one of the most affluent areas in the country. Plenty of tourism keeps Alexandria going, and it’s a convenient and pleasant community for people commuting to D.C. with lots of wealthy neighborhoods. Prices are down $35,000 from last year, and about half of the homes on the market have had at least one price reduction since coming to market. But even the high median income of $80K can’t buy a median priced home of $539,000—maybe a starter home under $300K.

The other day, just out of curiosity, my roommate and I were looking online at homes for sale in our area. Because we live in the historic Old Town section of Alexandria, the beautiful homes and townhouses regularly sell for over a million dollars – and we saw quite a few that were selling for multiple millions. In fact, the cheapest property for sale (at just under $200,000) was a TINY VACANT LOT.

Why do I like living here? I live in a beautiful, walkable neighborhood, so the use of my car has been greatly minimized (especially since I walk to and from my local Metro stop to take the train into D.C. for work). There are restaurants and bars, cultural and historic attractions, a weekly farmer’s market, and numerous events that take place throughout the year. (When there was a President’s day parade a few months back, I really liked being able to leave my apartment ten minutes before it was due to start, rather than having to drive around and attempt to find parking.) I can also do random things like walk down to Chipotle, like I did not long ago, and eat my dinner on a bench facing the Potomac river (the city of Alexandria calls itself The Fun Side of the Potomac).

A lot of my immediate family lives less than a hundred miles away, in Richmond (a city where I’ve already spent eight years of my life). The reason I moved to the D.C. area in the first place was because I felt like I’d have more job opportunities here – but on the flip side, it’s easier to afford a house in Richmond. My younger sister and her boyfriend moved into a beautiful, large two-story house last year that cost less than the small, plain, 1950’s-era townhouse that’s for sale around the corner from my apartment for over $300,000.

So, yes, I know I could move somewhere else where the real estate is cheaper. But would I be happy? I truly believe that location is a huge factor in how happy we are in our daily lives – at least it’s a huge factor in how I feel about my daily life. Would I be as happy if I moved farther outside of D.C. and had to commute an ultra-long distance to get to work? No. Would I enjoy living in a place as much if I had to drive everywhere I wanted to go? I’m positive that I wouldn’t like it as much, because I’ve lived in those types of locations before.

Other possibilities exist, of course. I could end up falling in love with someone who’s fabulously wealthy. Or, much more likely, I could end up pooling my resources and buying a house with someone else – I’ve already had discussions with some of my friends about the option of buying property together. (But there are always considerations to think about there, too. Like what happens if one person wants to move?)

There’s no reason for me to stress too much about this (and I’m not), and there’s no reason why I should be in any rush to buy, but it’s definitely something I’ve been thinking about. If I continue renting for the foreseeable future, I’ll be perfectly happy because I know I’ve at least found an area that feels like home. But still, it would be nice to be able to say, This place? It’s mine.

Miss A owns a home in Vancouver and understands the allure of living in a desirable neighborhood.

I also happen to live in a very trendy neighborhood of downtown Vancouver…I bought my property for 2 reasons: I needed a place to live, and I hate throwing away money on rent. […] The neighborhood I live in is known for two things: being trendy and its real estate growing in value. It’s in a prime location and has already appreciated by thousands of dollars. The fact that I live in extremely close proximity to my work, trendy shopping boutiques, chic nightlife and amazing ocean views – well, that’s just a bonus. Could I have moved out into the boonies and gotten a place cheaper there? Sure, but then I’d be driving my luxury vehicle to work everyday and spend hours of my life in traffic. I walk to work – saving the environment and the size of my butt by doing so.

Aura Mae has some housing advice for single women.

If you can afford it, buy a house, a condo, a cottage, a town home, anything! If you meet Mr. Right and you want to buy a house together, you can keep yours as a rental property or sell it. Either way you are miles ahead of where you would have been if you were renting.

Future Millionaire shares 8 Smart Money Moves for 2008 includes Rent, Don’t Buy. In her post, she lists her reasons for holding off on buying a home.

I’m really struggling on whether I should buy a house or not this year. I’m starting to think that if I’m struggling this much then maybe now is not the best time for me to buy but on the same token if I’m going to buy a house within the foreseeable future I feel like now’s the time. In the next 3 months I’m being transfered back to Atlanta after working and living out of town for the last year. Now that I’m finally settling in one location for the long term, have a sizable down payment (well over 20% of any house I’d choose), and with real estate prices falling it would seem that in the coming months would be the ideal time to buy a house for me.

Is anyone else disheartened by the cost of real estate? Any advice for what to do about it?

Related Reading:

Another reason single ladies find it difficult to afford their own homes? A study from Women’s Voices/Women Vote finds that compared to unmarried men, married men, or married women, unmarried women are most vulnerable to pay inequity.

Jezebel: American Women Are Gaining (Low Wage, Dead End) Jobs As Economy Falters

Deborah Fine, President of iVillage, writes at the Huffington Post about women’s financial concerns when it comes to buying a home.

(Contributing editor Zandria also blogs at Keep Up With Me.)