Paul Newland stood in the newly updated kitchen of a Germantown townhouse on a recent afternoon. It was Sunday, open house day. The price tag on this one was $280,000.
Newland, who works at the State Department, liked the place -- the finished basement, hardwood floors, the big fenced-in back yard. But he was worried. He had just lent his girlfriend a couple of thousand dollars, so his liquidity was seriously in doubt.
Still, Newland was determined to buy. Though just 30 years old, he was worried that time was running out.
"I feel like if I don't buy now, I'll never be able to live in Washington," Newland said. "And if I don't do it now, nothing will be in my range."
The Washington area's booming housing market and a strong economy that keeps producing high-paying professional jobs have created a new breed of home buyer. Like Newland, they are in their twenties to early thirties and have come of age in an era when six-way bidding wars are standard. Their mantra is buy now -- condos, townhouses, suburban colonials -- or get left in the dust. And many are relying on creative financing -- from interest-only loans to going in with their roommates -- to make sure they don't miss out.
Young buyers' "willingness to consider taking financial risks is much, much higher than it used to be," said Keene Taylor Jr. of Taylor Foster real estate, whose firm has worked with a handful of clients under the age of 25. "They're not in a position where taking a chance is as scary as for somebody who's got kids at home to feed."
Home buyers between the ages of 18 and 34 made up 39 percent of the market last year, according to the most recent data from the National Association of Realtors. And 12 percent of first-time home buyers were younger than 25. Similar statistics from the Washington area are not available, but anecdotal evidence suggests that real estate fever -- even at a time when the local market seems to be softening -- is not just something for baby boomers and Generation X.
Dissecting mortgages has become a hot topic of conversation in the local bar scene. Friends compete for bragging rights in snaring the lowest interest rate. Social groups like District-based Professionals in the City have added home-buying seminars to their lineup of happy hours, speed dating and trips to Iceland.
Everyone, it seems, has a friend like Elizabeth Goldman, who works in marketing and public relations, and at age 26 is on her second home.
Goldman bought her first condo in 2003, when she was 24, with money saved up from lifeguarding in high school and savings bonds from her grandparents because she couldn't shake the feeling that she was wasting money paying rent for an apartment in Centreville.
"I figured, hey, I could probably afford to buy something."
After boning up on real estate jargon and ditching a lender who refused to use e-mail, Goldman clinched a contract on a 625-square-foot, one-bedroom condo in McLean for $157,000. She put down 5 percent, mortgaged 80 percent and took out a line of credit for the remaining 15 percent. She sold it last summer for $300,000.
Now she is living in a $425,000 three-bedroom, two-level condo in Falls Church. To keep her monthly payments low, Goldman financed it all with an interest-only mortgage that will balloon in seven years.
For an age group that's highly mobile and not ready to settle down, a house or a condo is an investment more than a home. Many plan to move again within two or three years. Despite the setbacks and frustrations they must often go through to land a place, they seem to have little emotional attachment to their homes.
Indeed, there is little practical difference between living in an apartment and owning a house for longtime friends Casey Patten, 25; Justin Cook, 27; and David Mazza, 27, who all work in commercial real estate and own a $600,000 house in the up-and-coming neighborhood of LeDroit Park. The four-story mansion has five bedrooms, two kitchens and Jacuzzi tubs in all but one of the house's five bathrooms.
"It's not like we're going to live here forever," Cook said. "We're just in it to make some cash."
"And not pay rent," Mazza added.
Mazza and Cook bought a two-bedroom condo together in Old Town Alexandria in 2002 for $149,000. Cook's grandparents lent them the money to pay for it for only 5 percent down. But it wasn't long before that place seemed cramped, and they eventually sold it for nearly $230,000. They brought in Patten, and like a bunch of guys splitting season tickets to the Nationals, they went in on a house together in 2003, splitting the down payment, mortgage and bills three ways.
Now they're moving again. "When your house sale's return is comparable to your day job's salary every one to two years, moving is no big deal," Mazza said in an e-mail.
Not everyone enters the market so painlessly. Some real estate brokers even write off young buyers as not worth the trouble. After all, there are no shortage of clients in Washington's hot housing market, and this demographic comes with several strikes against it. Many young people have small savings, large college debts and short credit histories.
That's partly why Adam Iobst got into the business in the first place.
Iobst made a smart investment on a home in Germantown four years ago when he was just 26. That's when he realized the potential of the market for young buyers -- and the real estate agents willing to cater to them.
He said his clients typically come with a long wish list of amenities: three bedrooms, a fenced back yard, in Rockville, near a Metro station and close to good schools -- just in case. All for about $1,200 a month.
Iobst said he makes it a practice not to laugh. Instead, he punches the request into a database of available homes so his clients can see what comes up -- usually, it's nothing.
"It's all about managing expectations with regards to what people can really afford," Iobst says. "Sometimes we start looking at houses in Rockville and before we know it, we're out in Frederick."
In Maryland, for example, the median starter home price in 2001 was $117,801, according to the Maryland Association of Realtors. By June 2004, that figure had rocketed to $214,446 -- an increase of 82 percent.
For those without high-paying jobs or financial help from their families, the timing could hardly be worse for finding a house. Many have been priced out of the market or confronted with two choices -- a less expensive neighborhood in the city or farther and farther out in the suburbs.
Bianca Ashton, a 23-year-old District resident who works at TV One, wanted to stay in the city but didn't want to pay more than $150,000. She had a long search. In July, Ashton found a condo building in Northeast within her price range that was being renovated, and last month she got the call she had been waiting for. A contract on a 700-square-foot one-bedroom had fallen through, so Ashton could have it. Settlement is tentatively planned for November.
"I didn't want to go out there and rent," she said. "I feel like renting is a waste of money."
Danielle Mariabelli's teacher's salary and her husband's income as a security officer took them in the other direction -- out. They opted to live in Frederick County, where they could get a three-bedroom house with a back yard for $218,000.
"It's either eat ramen noodles and have a nicer place, or be able to eat out once in a while," said Mariabelli, 25.
Bryce Beckner has not been so lucky in Calvert County. The 23-year-old, who works at a building supply company, said he's not willing to compromise on what he wants: a rambling three-bedroom with a basement he could rent out.
His lender preapproved him for $200,000, but Beckner thinks that's more than he can really pay. But none of the houses that he has looked at are below $275,000, and he's worried he may have to leave his home town for some place foreign, like North Carolina.
"For me, the next step is buying a house," he said. "I can't just live with my parents. I have to be my own man now."
Iobst recommends a few tricks to help his young clients stay competitive. One is to have their parents take over monthly bills for a few months so their bank accounts can stay full -- making it appear to lenders that the buyers really do have the cash on hand to seal the deal.
Still, he said that the bidding process can sometimes be his inexperienced clients' downfall.
"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."