During the last two days, I have shown several homes in Fairfax County to clients who are currently renting.  We found a single family home in Herndon that they should be able to purchase for somewhere in the neighborhood of $250,000.  This same home four years ago would have sold for more than $400,000.  I personally believe that the Herndon market is currently artificially low and will likely enjoy a 100 percent appreciation during the next five years.  Using the Northern Virgina MLS system’s Rent vs Buy calculator, this couple will save over $43,000.  And this is with an extremely conservative approach inputting annual appreciation of only 4 percent.  Using a more aggressive appreciation rate of 15 percent per year (still less than my forecast) for Herndon this couple would save in excess of $230,000.  Not bad for an initial investment (down payment) of only $8,750!!

Now if you’ve been listening to the news reports you no doubt have repeatedly heard that we experienced “the Perfect Storm” in the real estate market over the past three years.  I have to tell you that we are now in the midst of a “perfect trifecta”.  The significant drop in home prices combined, with extremely low interest rates (at the time of this writing they are less than 6 percent) and an abundance of money (for those with decent credit scores) have created a perfect opportunity for first time home-buyers.  In addition to this, the federal government’s first time buyers’ tax credit (see earlier blog entry) makes it even easier to afford a home.

Try your own rent vs buy analysis.  Once you have done this, contact me to schedule an appointment to look at homes you can afford.