The decline of the formal living room

The formal living room: a staple of the 1950's American home, the room that was your front line for entertaining and a center of design for home architects.  It was once considered one of the most important features in a home.

Now, the living room has fallen to the wayside, and sometimes even been a non-seller for today's home buyers.  Today's home living and entertaining revolves around two things: food and television.  Most American's spend the majority of their time in the kitchen and in the evolving great room.  Home designers today center their designs around this new "it" room.  The great room layout, a large open space for the kitchen, informal dining area and the living room all in one, has made the formal living room obsolete.  Families today do not want to waste money furnishing a room that is only used once or twice a year.  That space is better used for a large open family room.  

Brown Design via properhunt.com

Market Update: To buy or to rent? That is the question...

Hello all!

This spring brings a fresh pop in the real estate market as well as a booming start to the "moving season" as we like to call it.  For real estate agents, spring means families shopping for homes to move into right at the end of the school year.  It means new military assignments.  It means lots of moving families looking for their next home.

We work with a lot of people (many military and government) who are moving into the DC metropolitan area for a short period of time, some just two years, and they all ask the same question: to buy or to rent?

Lets break down the economics...

Many military families are given a monthly stipend that covers their housing expenses, whether it be for rent or for a mortgage.  Most like to simply rent at their new posting because there is some risk to investing in real estate.  In some parts of the country, it is not economically smart at all to invest in real estate because the market in that area is not growing and values are fairly flat lined or growing very slowly.  This means that the value of the house does not appreciate and with future real estate costs when they turn around to sell, it just isn't worth it.  

That's not the case here in DC, Maryland and Virginia!!

This area's market is booming and has been for over two years now.  We are seeing major increases in investment after even just one year.  Almost two years ago, we had a State Department family buy a 4BR/3BA renovated row house on 16th St. in Northeast DC for $605,000.  After their first year of ownership, the home was worth $700,000.  Into the second year, it's worth $765,000.  

That's right, folks! A 26% increase in value in just two years!  ALL of the metropolitan area is seeing a great boom in real estate values.  There is a ton of new inventory and things are moving more quickly than they have in the past 5 years.

So, back to our question.  To rent or to buy?

Here in this area, there is no question.  Why have your monthly renting expense disappear into the great abyss when you can be investing in your own home?  With rental inventory low and monthly rental fees high, there is a limit to how far your monthly investment can go.  But by investing that same amount of money in a home of your own, you are looking at promising returns on your investment with rising market costs -- all perhaps with a mortgage payment less than what you would pay in rent.

Only staying in town for a few years?  In this market, that doesn't matter!  After you move on to your next home, you have options.  You can take your newly earned equity and just sell it, pocketing the profit or you can keep it and sit on your growing equity even longer while you hire a property management company to rent the home out for you.  The rental income often covers your monthly mortgage payment with soon, if not immediately in this area, nets a nice monthly return!  For example, the monthly carrying cost for a $400,000 4BR/3BA townhouse in Alexandria's Kingestowne neighborhood is about $2,200 (including taxes, insurance, and Home Owners Association fees), but the rental income for that same property is $2,400 a month.  Not only are you making money off of the rental, but your home is gaining value.  Over the long run especially, you can really enjoy some spectacular returns.

Interest rates are still low!  Our latest update from lenders show rates at 4.375% (as of 4/16/14).

Our conclusion:  Why would you rent?!!

Until next time,

Dave and Erin

A great new home in McLean...

1420 Spring Vale Dr., McLean

Hello All,

We were shopping in McLean today and came across a fantastic home.  This 5BR/5BA home is offered by Anne DiBenedetto of Washington Fine Properties and built by Madison Homes.  This home offers a ton of square footage, but not a single foot goes to waste.  Every room has a purpose.  Each room has some added elbow room by being just a bit larger than your average room, but at the same time, the spaces aren't cavernous at all.  The entire home (even upstairs) features 9ft. ceilings, tons of natural light with oversized windows throughout, and a great open floor plan.  The great room layout provides a wonderful open-living space that flows into the rest of the home.  Each bedroom features its own full bath, which is great for a growing family! 

The asking price is $1,995,000.

Check out the photos!

Until next time,

Dave and Erin