Last fall, Heather Massler and Matthew Bratland decided to buy their first home. After years of big price increases, the real-estate market had cooled enough that homeownership in Montgomery County—where they’d both grown up and wanted to put down roots—was finally within reach.
Massler and Bratland found their dream home in February. About three miles from downtown Silver Spring in a neighborhood called Long Branch, the brick house has three bedrooms, one bath, and a small yard.
Massler, an architectural historian, fell for the original windows, fireplace, and oak floors. The seller had recently updated the 1943 Colonial, adding a new roof, installing a new furnace and air-conditioning compressor, and refinishing the floors.
The house hit the market in October for $425,000. By the time Massler, 32, and Bratland, 29, visited four months later, the seller had dropped the asking price to $375,000. After making an initial offer of $360,000, the couple settled on $370,000, with the seller paying about $9,000 toward closing costs and agreeing to repair the electrical and plumbing systems.
“We wouldn’t have gotten that kind of deal three years ago,” Massler says.
Three years ago, the real-estate market was so hot that open houses in popular areas were overrun with buyers. Bidding wars were common, and many properties sold just days after they were listed.
Today, “for sale” signs can linger in front yards. Sellers are more likely to bargain. And as more foreclosures hit the market, prices continue to slide.
Along with low interest rates and first-time-buyer tax credits, today’s slow market is convincing many young people to trade in rentals and buy condos, small houses, or larger fixer-uppers.
Kristen Carson-Owens and her husband, Corey Owens, were tired of paying rent after living in a one-bedroom apartment in Crystal City for three years. “It’s frustrating to not have anything to show for the money you spend every month,” says Kristen.
Long & Foster agent Roby Thompson says that sales prices have dropped more than rents. “Look back three or four years and there was a huge gap between ownership and renting,” he says. “It used to cost significantly more to buy; now it’s about the same.”
When they began their search last fall, Kristen and Corey had a wish list: a single-family home in the District, close to Metro, that they wouldn’t outgrow in just a few years.
Their price range of around $300,000 led them to Fort Totten, an enclave of red-brick rowhouses and garden-style apartments near Catholic University in Northeast DC, where they found a three-bedroom, two-bath rowhouse.
Kristen loved the arched doorways, glass doorknobs, and creaky floors. “I grew up in an old home, so those were the first things I noticed when I walked in,” she says.
The house had been on the market for three months when Kristen and Corey, both 25, toured it in December. They offered the list price of $339,900 but asked the seller to cover the closing costs, which came to more than $10,000. Including insurance and property taxes, their monthly mortgage payment is about $600 more than their rent in Arlington.
Says Kristen: “We saw that prices were hovering much closer to our rental payments. It just made more sense.”
Buying during an economic slowdown comes with risks. “We’re both nervous about it,” says Heather Massler. “If one of us gets laid off, it’s going to make things very difficult.”There’s also the chance that home prices in some areas will continue to fall. To guard against a short-term loss, Kristen and Corey stretched to buy a larger home that they won’t have to sell in a few years.