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Only the Good Buy Young
David Mazza, 27, from left; Casey Patten, 25; and Justin Cook, 27, are selling the Northwest Washington house they bought together two years ago.
(By Michael Robinson-chavez -- The Washington Post)
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"It gets very competitive," he said. "The competition takes over. You become willing to give in to terms that you're not comfortable with, and that's when you make mistakes."
Falling too in love with a house -- or the idea of a house -- can be costly in the long run. Interest-only or adjustable rate mortgages are structured for lower payments -- at least initially. But if interest rates soar after a few years, as they have been known to do, monthly payments could double.
Already, there are some signs that the Washington market could be slowing down, and some analysts think it peaked months ago. If owners try to sell their homes when the market has cooled off, they could wind up owing more than it's worth.
Sometimes, the risk seems too great. Jeremias Alvarez, 26, engaged in some fancy financial footwork to win a contract over the summer on a $450,000 two-bedroom condo in the District's rapidly gentrifying U Street corridor.
He planned to finance 100 percent of the cost with no money down. But that meant his closing costs totaled about $15,000, and he was considering borrowing against his retirement plan to pay for it. That plus renting out a bedroom and maybe even getting a part-time job to supplement his government salary.
But then, in a moment of clarity, Alvarez pulled out of the deal. His real estate broker, the seller, everyone was pushing him to buy. But he just wasn't sure prices would keep going up, and if they didn't it would be a financial disaster.
As for Newland, he's still looking. He said he has been outbid more times that he'd like to share.
"I know I can't really afford a mortgage," Newland said. "But I also know I have to buy a house."
