No City for Broke Men (& Women)
In my last post I mentioned that one of the things that got me thinking so much about savings was this newfound desire to buy a house. Let me start from the beginning.
Homebuying has never been a priority. I was an freshly minted young adult in 2008. I saw what the blind pursuit of owning a home did for many people whose finances weren't actually in any shape for homeownership. I also enjoy living in metropolitan areas. In my adult life I've rented apartments in downtown Atlanta, Manhattan, and now Washington, D.C. That all said, the idea of buying a house has never been high on my priority list because it's really not conducive to any of the lifestyle choices I've made. I keep living in these expensive ass cities and my ability (and admittedly discipline) to save has been limited. My income has been good but I've used that to support renting in more desirable areas. Plus my penchant for moving has never made the idea of being strongly tied to one place too appealing.
Until now. Amazon is coming to the area, making now a great time to buy before it becomes out of reach. I also really like D.C. and see myself staying. I joined a church, I am on the leadership team for a young black professional organization, I am making more and more friends, I'm dating, I'm living. Plus my options for going anywhere else are pretty limited. I require a large population of upwardly-mobile blacks, a vibrant social scene, and good public transportation. Where else will I go that I haven't already lived?
So I started doing a bit of research into what I might be able to buy in D.C. in the next year or two. The results of my search have not been ideal.
I suppose I am late to the party but I cannot understand how someone can buy a home without having been the world's best saver while sleeping in mom's basement or without having received an inheritance! Twenty percent down on a home, even a moderately-priced one in the DMV, is a lot of money. Like, a lot lot. But there are many programs, even for people who are not first time buyers, that allow no or very low down payments if you have good credit. But the catch is that the monthly payment is high af due to "mortgage insurance" aka "oops sorry I didn't have $80K to drop on a house up front so here's some money to prove I have the money." I also learned that the property taxes up here are some of the highest in the country, so that even if the total of the principle, interest, homeowners' insurance and mortgage insurance is affordable, the taxes quickly catapult that monthly payment into the stratosphere.
Basically, you gotta have a grip money up front, or make a ton of money to pay every month.
And for me, I don't see any way forward without a significant change in lifestyle or luck. My options include:
Win the lottery
Get married so I can have a second income (not looking likely any time soon)
Move to East Bumble Maryland
Buy a shack I have to renovate from the ground up
Live in beautifully renovated 450-square-foot shoebox
Or leave the DMV altogether to make a nice home in Quiet Suburb USA
If I want to maintain the same type of home I have now -- in the District, brand new, very affordable on a single income, and in a convenient neighborhood -- I'm pretty much shit outta luck.
I guess my question is, why is that? There's so much talk from the experts about why renting is such a throwing away of money, but transitioning from renting to owning is such a huge leap, both in lifestyle and in finances. Why should I sacrifice my lifestyle and/or my coins so drastically? As I was looking for homes in my area, I came across quite a few new townhomes going up in a neighborhood only about five miles away, right across the border in Hyattsville, Maryland. By DMV standards they are very affordable. Still, even in the best case scenario for me, which appears to be this unique loan that allows 10% down but no mortgage insurance, my monthly payments would be a full $1,000 more than I pay in rent now. Yes I'd be getting more space for the money, but in order to maintain any semblance of my current lifestyle (again, convenience, city-adjacent location, etc.), I have to damn near double what I pay in rent.
Homeownership continues to be a north star for many people, even us millennials who people claim are killing homeownership (and everything else). Still, I sometimes wonder at what cost, given the amount of sacrifice, financially and otherwise, needed to secure a home in a desirable area.
Even with these questions and doubts, my biggest pull to buy is beyond Amazon and the promise of increase property values. It actually stems from my sadness in seeing my brothers and sisters being pushed out of these areas -- and my desire to defy this trend.
D.C. has been nicknamed Chocolate City. For years it was a majority black area, until now. In 2015, it fell to below 50% black for the first time in 60 years. As gentrification continues to take hold, and as blacks are pushed further and further away from the city center, something in me so strongly wants to fight against it.
I make a good income (at least, I will whenever I have a job again), I am educated, I am virtually debt-free (I have a bit of credit card debt that will be paid off by the end of the year, and no student loan debt), and still I find the path to homeownership in and around this city to be a difficult goal to accomplish. Even in the best circumstances it is still hard for blacks. I am probably going to have to ask my mom for some assistance with a down payment, and I am thankful for a mom who has the desire and willingness to do so. But what about for those who do well but haven't cracked six figures? Or those who don't have a parent to reach out to? Yes there are programs that provide people with loans for no money down, but how will they make the monthly payments? I saw an article advocating for the increased access to education as the solve to increase black homeownership in the District but my own situation shows that education isn't the only answer. One's earnings have to get to a very high level to be able to save and/or make the inflated monthly payments in a market like this one, and even if you reach that level, the student loan debt incurred to get there can wipe out whatever cushion you may have otherwise had.
I say all that to say that as a black woman in the DMV I want to buy here so that I can keep black ownership alive and well in this city. With such a rich history of blackness it is a shame to see black people not be able to hold on to the city once nicknamed for them. So despite the logical questions I posted earlier, I still want to figure out how I can make home ownership happen for myself, so that one less black resident is pushed out of this city.