I moved into an apt in July only to realize the next month the complex was
sold to sell off the individual properties. I'm torn between having to
purchase the place or move out next July. I'm considering the purchase but
I'm wondering if there's any guidelines to follow such as what I should have
as a down payment ( I really have nothing because I started my first job
last month), how much the property is worth, how much I should pay for the
mortgage and taxes. I want to see if I can afford it and if its worth it.
Does anyone know of any links for information for first home buyers? thank
you!

In article ZiOYc.62726$yh.54749@fed1read05, Matt Warnock
wrote:

I moved into an apt in July only to realize the next month the complex was
sold to sell off the individual properties. I'm torn between having to
purchase the place or move out next July. I'm considering the purchase but
I'm wondering if there's any guidelines to follow such as what I should have
as a down payment ( I really have nothing because I started my first job
last month), how much the property is worth, how much I should pay for the
mortgage and taxes. I want to see if I can afford it and if its worth it.
Does anyone know of any links for information for first home buyers? thank
you!

What are the details? How much do they want? When do they need to
know? What is your FICO score? How much is rent for a similar place
in your area?

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ==================

my rent is $1200/m + $59 for the parking space. its a 1 bedroom w/ 925 sq
feet of living space. I'm going down to find out what they want for it and
the rest of the details. I was hoping to find out any questions I might
need to ask them for the meeting and post the details tomorrow. according
to the quick online calculator, my FICO score is estimated to be 735 to 785.
The rent on my place is pretty average for the size and quality of the apt.

I'll post more info tomorrow, but are their any questions I should have
ready besides, how much for the place, how much per year, and what comes w/
it (there's a washer/dryer and fridge/dishwasher here)

thanks!

-Matt


"John A. Weeks III" wrote in message
...
In article ZiOYc.62726$yh.54749@fed1read05, Matt Warnock
wrote:

I moved into an apt in July only to realize the next month the complex
was
sold to sell off the individual properties. I'm torn between having to
purchase the place or move out next July. I'm considering the purchase
but
I'm wondering if there's any guidelines to follow such as what I should
have
as a down payment ( I really have nothing because I started my first job
last month), how much the property is worth, how much I should pay for
the
mortgage and taxes. I want to see if I can afford it and if its worth
it.
Does anyone know of any links for information for first home buyers?
thank
you!

What are the details? How much do they want? When do they need to
know? What is your FICO score? How much is rent for a similar place
in your area?

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ==================

In article bhPYc.62742$yh.40683@fed1read05, Matt Warnock
wrote:

my rent is $1200/m + $59 for the parking space. its a 1 bedroom w/ 925 sq
feet of living space.

A quick rule of thumb is that the rent on a place should be 1% to 1.5%
of the sales price. Working backwards, that means that if the price
is less than $90,000 to $120,000, it is a pretty good deal. If it
is over that amount, you can likely do better renting.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ==================

"Matt Warnock" wrote in message
news:ZiOYc.62726$yh.54749@fed1read05...

I moved into an apt in July only to realize the next month the complex was
sold to sell off the individual properties. I'm torn between having to
purchase the place or move out next July. I'm considering the purchase
but
I'm wondering if there's any guidelines to follow such as what I should
have
as a down payment ( I really have nothing because I started my first job
last month), how much the property is worth, how much I should pay for the
mortgage and taxes. I want to see if I can afford it and if its worth it.
Does anyone know of any links for information for first home buyers?
thank
you!

If you decide to buy, you could explore some other options besides your
present rental unit that is being converted. Look around at some other
condos in other buildings and compare their prices with what is being asked
for the one in which you are living.

On Mon, 30 Aug 2004 20:05:31 -0400, someone wrote:

my rent is $1200/m + $59 for the parking space.

Never mind that, do you want to buy (ANY PLACE) or not? You didn't
start out to buy, you started out to rent. Why do you want to buy
now? That they are selling is not a good reason. You've only been
there a few months, not likely that you are emotionally attached to
your unit that quickly, so that you "have to" buy it.

When you began to rent, did you plan on staying there more than 5
years? If you bought, would you now be satisfied with it for that
period or more?

If you do want to buy something, the 1st thing to do is look around at
what other sellers are charging to purchase similar units. Never mind
rule of thumb, you need to get specific. If a rule of thumb says your
unit "should" sell for $100k but others are selling for $90k then
yours is no bargain no matter what the rule of thumb says.

On advantage to buying in place, is that the sponsor will often offer
you a discount as he avoids having to remove you, fix up & clean up
the unit, and then having a period of vacancy and no income until he
eventually sells it. Thus the "insider" price is often less than the
"outsider" price.

But your main Q is, do you want to buy at all?

-v.

"v" wrote in message
...
On Mon, 30 Aug 2004 20:05:31 -0400, someone wrote:

my rent is $1200/m + $59 for the parking space.

Never mind that, do you want to buy (ANY PLACE) or not? You didn't
start out to buy, you started out to rent. Why do you want to buy
now? That they are selling is not a good reason. You've only been
there a few months, not likely that you are emotionally attached to
your unit that quickly, so that you "have to" buy it.

When you began to rent, did you plan on staying there more than 5
years? If you bought, would you now be satisfied with it for that
period or more?

If you do want to buy something, the 1st thing to do is look around at
what other sellers are charging to purchase similar units. Never mind
rule of thumb, you need to get specific. If a rule of thumb says your
unit "should" sell for $100k but others are selling for $90k then
yours is no bargain no matter what the rule of thumb says.

On advantage to buying in place, is that the sponsor will often offer
you a discount as he avoids having to remove you, fix up & clean up
the unit, and then having a period of vacancy and no income until he
eventually sells it. Thus the "insider" price is often less than the
"outsider" price.

But your main Q is, do you want to buy at all?

-v.

I ultimately want to purchase a home. I feel rent money goes nowhere, where
if you pay a mortgage, no matter how much, it does go somewhere.

At the meeting tonight, they did not give us a price. it will be presented
later, but they say it will be between $215k and $250k for 1 bedroom apts,
and mine is the largest of all the 1br apts.

I plan to live here for about 2 years, at the point I would have spent over
$30k in rent, or about $40k in mortgage payments, if I do the math right.
Also, if you use 1 of their 2 provided lenders (but you can choose any), you
get a $3k credit towards closing costs and a 1/2% discount on the rate.
That sounds like a good deal, but I was hoping to pay $180k for this place,
not $250k. It seems high for the area, but I'm new to the area and
purchasing housing.

Any ideas or suggestions for me to look at or ask at my meeting?

On Tue, 31 Aug 2004, Matt Warnock wrote:

I ultimately want to purchase a home. I feel rent money goes nowhere, where
if you pay a mortgage, no matter how much, it does go somewhere.

At the meeting tonight, they did not give us a price. it will be presented
later, but they say it will be between $215k and $250k for 1 bedroom apts,
and mine is the largest of all the 1br apts.

I plan to live here for about 2 years, at the point I would have spent over
$30k in rent, or about $40k in mortgage payments, if I do the math right.
Also, if you use 1 of their 2 provided lenders (but you can choose any), you
get a $3k credit towards closing costs and a 1/2% discount on the rate.
That sounds like a good deal, but I was hoping to pay $180k for this place,
not $250k. It seems high for the area, but I'm new to the area and
purchasing housing.

Any ideas or suggestions for me to look at or ask at my meeting?


Matt, sounds like a bit of legal blackmail going on by your present
landlord. Even though they claim you will get a break on closing costs
and interest rate, I don't think you should buy anywhere unless you plan
on staying there for at least 5 years. At least, this is the general rule
of thumb given by money people like Clark Howard on syndicated radio
(great website at www.clarkhoward.com) and Suze Orman in her newpaper
columns. Otherwise, not only would you probably lose with all the closing
costs involved but I'm guessing you'd have a hard time reselling and
recouping anything near to what you would pay for this place. I got nosy
and looked at your website (go Nittany Lions!) and see you are a recent
college graduate. At this point in your life, I don't think you need this
kind of debt hanging over your head and suggest it would be a lot better
to just keep renting while saving for a house with which you have spent a
lot of time researching and comparing with other houses. I've had to
learn the hard way never to be in a hurry to buy big ticket items like
cars, houses, etc.

I'm not sophisticated enough to go through the detailed calculations to
prove this but I just take their (Clark's and Suze's) words on not being
able to recoup closing costs and sales price on a primary residence
unless you live there for at least 5 years (generally speaking with some
few exceptions ).

Bob

In misc.consumers.house Matt Warnock wrote:

I plan to live here for about 2 years, at the point I would have spent over
$30k in rent, or about $40k in mortgage payments, if I do the math right.
Also, if you use 1 of their 2 provided lenders (but you can choose any), you
get a $3k credit towards closing costs and a 1/2% discount on the rate.
That sounds like a good deal, but I was hoping to pay $180k for this place,
not $250k. It seems high for the area, but I'm new to the area and
purchasing housing.


if you plan to stay only 2 years, it's very hard to imagine that buying
will be the financially right move, even if the price is exactly market
price. $3k off closing costs? That should give you a hint that you
need to add in some closing costs to your estimate of total costs.
Don't forget comission when you sell the unit in 2 years. And upkeep.
And taxes, and insurance, and probably condo fees (I don't remember if
you said what type of home this is) or homeowner assn fees. And, if
applicable to your purchase and your habits, the oportunity cost of
putting up a down payment.

listen to what everyone has to say, but....that 2 year window makes it
darned hard to work up a scenario where buying is a better choice
financially than renting - if you can find a similarly priced rental
you'd be happy with.

In article qI7Zc.27599$nk.27168@okepread05, Matt Warnock
wrote:

At the meeting tonight, they did not give us a price. it will be presented
later, but they say it will be between $215k and $250k for 1 bedroom apts,
and mine is the largest of all the 1br apts.

Red alert! Battle stations! Raise shields Mr Worf.

This is WTDM (way too damned much). A one bedroom converted from
an apartement building should be in the range of $40K to $75K,
maybe up to double that if it is in a really good building in a
very good neighborhood. What they are doing is using FUD to
get you to pay 3 times the going rate. FUD is fear, uncertainty,
and doubt. They will tell you that you have to buy, that you will
get put out on the streets if you don't, and that it is hard to
find anything else, so be very fearful. Find somewhere else to
rent, and if you really want a condo, go find a realtor to help
you get something that is more in line with the market.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ==================

"John A. Weeks III" wrote in message
...
In article qI7Zc.27599$nk.27168@okepread05, Matt Warnock
wrote:

At the meeting tonight, they did not give us a price. it will be
presented
later, but they say it will be between $215k and $250k for 1 bedroom
apts,
and mine is the largest of all the 1br apts.

Red alert! Battle stations! Raise shields Mr Worf.

This is WTDM (way too damned much). A one bedroom converted from
an apartement building should be in the range of $40K to $75K,
maybe up to double that if it is in a really good building in a
very good neighborhood. What they are doing is using FUD to
get you to pay 3 times the going rate. FUD is fear, uncertainty,
and doubt. They will tell you that you have to buy, that you will
get put out on the streets if you don't, and that it is hard to
find anything else, so be very fearful. Find somewhere else to
rent, and if you really want a condo, go find a realtor to help
you get something that is more in line with the market.

Nothing goes for that cheap around here. Small 2-3 bedroom homes on a 1/4
acre of land go for 1/2 mil. Compared to apts the same size on this street
sell for the same price.

I will definitely take all this into considering. thank you for the advice!

Matt Warnock wrote:

Nothing goes for that cheap around here. Small 2-3 bedroom homes on a 1/4
acre of land go for 1/2 mil. Compared to apts the same size on this street
sell for the same price.

Comparable properties - that's the way to go. If you can really judge
them to be comparable and they've _sold_ for similar prices, then you've
figured out what the market price is. If you're inexperienced and/or
unsure, and you can find an independent appraiser that you trust, a
couple of hundred dollars for an appraisal can buy a lot of peace of mind.

I agree with previous posters - if you include the real estate
commission when you sell, it will be very difficult to come out ahead in
2 years.

- Bryan

"Bryan" wrote in message ...
Matt Warnock wrote:

Nothing goes for that cheap around here. Small 2-3 bedroom homes on a
1/4 acre of land go for 1/2 mil. Compared to apts the same size on this
street sell for the same price.

Comparable properties - that's the way to go. If you can really judge
them to be comparable and they've _sold_ for similar prices, then you've
figured out what the market price is. If you're inexperienced and/or
unsure, and you can find an independent appraiser that you trust, a couple
of hundred dollars for an appraisal can buy a lot of peace of mind.

I agree with previous posters - if you include the real estate commission
when you sell, it will be very difficult to come out ahead in 2 years.

I definitely agree that it's questionable how I will end up in a few years.
Maybe I'm the new guy and I don't understand a lot of things, but I read the
advice on here, I've heard the same advice to people on the different money
shows on cable, etc, but I have two options:

If I rent for 2 years I spend:

24 x $1259 = $30216

and I have nothing at the end, no debt, no property, no advancement in my
credit.

Or I can purchase a house and keep it for the same 2 years

lets say I spend $1500/month on the mortgage (I might be off,but bear with
me)

24 x $1500 = $36000

$250,000 - $35,000(less interest) = 215,000

figure in taxes, some repairs, etc. I'm not sure exactly what this will be,
but I'm fully aware of it.

lets say I sell the apt in 2 years for the same as I bought it for, or God
forbid, less,

aren't I still ahead? because I can get back what I put into it, with the
possibility of losing some, or even gaining some at the rate that real
estate is increasing in this area. And real estate is so out of hand here,
that it could easily go up, considerably. Plus my credit looks better if I
pay my mortgage on time each month.

Basically I'm in a point in my life where I'm making more money than I need.
I don't have car payments, student loans or credit card debt. I don't have
kids or a wife to spend money on. Does this affect anything?

By the way, I live in Falls Church, Va just outside of DC. That is why real
estate is so high.

Thank for EVERYONE's advice! I hope I'm not too burdensome.

-Matt

In article 7dbZc.28479$nk.10324@okepread05, Matt Warnock
wrote:

If I rent for 2 years I spend:

24 x $1259 = $30216

and I have nothing at the end, no debt, no property, no advancement in my
credit.

More important is what you do not have. You are not locked in for
another 28 years of mortage payments. You also do not have more
commons fees, or responsibilities for accessements or repairs.
Who knows what might happen if you buy. They could determine that
the building roof is bad, the windows are rotten, and the city needs
to tear up the street. You could easily get slapped with a number
of one-time accessments that would run into the thousands. About
that time, the water heater would break, and the refridgerator
goes toes up.

Or I can purchase a house and keep it for the same 2 years

lets say I spend $1500/month on the mortgage (I might be off,but bear with
me)

24 x $1500 = $36000

$250,000 - $35,000(less interest) = 215,000

figure in taxes, some repairs, etc. I'm not sure exactly what this will be,
but I'm fully aware of it.

Lets figure out what you would really have. In that equation of
24 x $1500, most of the $1500 in interst. In fact, I'd be surprised
if you were paying more than $90 a month in principal. I can run
the numbers, but lets use $100. That gives you:

24 x $100 = $2400. No real estate deal is worth doing when the
upside is only $2400, and the downside is virtually unlimited.
That $2400 will not even cover closing costs, let along realtor
fees when it comes time to sell.

Basically I'm in a point in my life where I'm making more money than I need.
I don't have car payments, student loans or credit card debt. I don't have
kids or a wife to spend money on. Does this affect anything?

Well, that means that you should be saving a big chunk of your income
for retirement, and putting away what you can for the future. This
is the one time in your life when you don't have a wife and kids with
infinite wants, and you have a future for the time part of the time
value of money to work in your favor.

By the way, I live in Falls Church, Va just outside of DC. That is why real
estate is so high.

I looked at townhouses just a little further out on I-66 a while
back. I had no problem finding 2-bed 2-bath with a garage in the
$150K range. The job that I was looking at didn't come through, so
I ended up not buying.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ==================

John A Weeks, writes:

In article qI7Zc.27599$nk.27168@okepread05, Matt Warnock
wrote:

At the meeting tonight, they did not give us a price. it will be presented
later, but they say it will be between $215k and $250k for 1 bedroom apts,
and mine is the largest of all the 1br apts.

Red alert! Battle stations! Raise shields Mr Worf.

This is WTDM (way too damned much). A one bedroom converted from an
apartement building should be in the range of $40K to $75K, maybe up
to double that if it is in a really good building in a very good
neighborhood.

Boy, I can tell you live in Minnesota...

On Tue, 31 Aug 2004 23:19:31 -0400, someone wrote:

If I rent for 2 years I spend:
24 x $1259 = $30216

Or I can purchase a house and keep it for the same 2 years
24 x $1500 = $36000

Remember, rent includes "everything" - the property taxes, insurance
on the structure, and the upkeep & maintenance.

OK so if you buy, for the 2 years, you will spend $36k in interest,
$12,000 in property tax, $1,000 in structure insurance, and an unknown
amount in common charges, plus whatever specific repairs are needed in
your unit, leat's say common of $150/mo until we get a better figure,
that's $3,600 plus some individual repairs = $4,000.

You have now spent $53k vs. $30k, before closing costs before sales
commissions, a difference of close to $1,000/mo. Now, if you were to
rent for $1259/mo, and payroll deduct $1,000/mo into a 401k or even
just a regular taxable acount, well at the end of 2 years you'd have
$24k in your account if it performed at zero gain, and most people
would expect for some amount of investment gain.

To give you the same $24k in your pocket plus cover the sales costs,
your condo would have to go up by a lot. Not impossible, but you'd be
depending on a big real estate gain to just be even with a poor stock
market return. OTOH you could get lucky and buy the 'right' stock and
it could skyrocket, and opportunity you would not have if all your $
were going to your house payment.

I bought my 1st real estate at age 22 or 23, but it was a clearly
speculative play, not buying retail from a sponsor.

-v.

On Wed, 01 Sep 2004 16:37:48 GMT, someone wrote:

Hey - how many months is it on your existing lease? So you don't
"have to" leave for at least another 9 mos or so, right? And in many
states (don't know about yours) there are greater legal protections
for tenants in a "conversion", how soon can they get atually you out?

Anyway, NO WAY do you have to buy "now", even if you do decide to buy.
And before you jump at that 1/2 point "off", see what other lenders
charge in the first place. And before you jump at that "credit" for
closing costs, see what costs others are charging. NEVER go by the
amount "off", go by the amount you pay, who is it that is saying that
the original amount (before the "off") was the "right" amoiunt,
anyway.

-v.

"v" wrote in message
...
On Wed, 01 Sep 2004 16:37:48 GMT, someone wrote:

Hey - how many months is it on your existing lease? So you don't
"have to" leave for at least another 9 mos or so, right? And in many
states (don't know about yours) there are greater legal protections
for tenants in a "conversion", how soon can they get atually you out?

Anyway, NO WAY do you have to buy "now", even if you do decide to buy.
And before you jump at that 1/2 point "off", see what other lenders
charge in the first place. And before you jump at that "credit" for
closing costs, see what costs others are charging. NEVER go by the
amount "off", go by the amount you pay, who is it that is saying that
the original amount (before the "off") was the "right" amoiunt,
anyway.

I think I'm deciding against purchasing, thanks to the incite provided here,
but it has opened my eyes to purchasing. I have 10 months left on my lease.
Of course they are not kicking me out until then, but the "discounts" they
are providing are only for 60 days. One person brought up a good point:
what if they sell at $250k to the residents that want to buy, then they
can't sell to the public for 5% more. The 5% discount they gave us doesn't
look so great if they have to lower the price to sell them. They would not
comment on giving us a refund, but only said they don't anticipate that
happening!

2 things to add to the mix. I talked to some people at work. They are
strongly recommending me buy it because real estate is so high down here and
its increasing. Over the past 5 years, in one guy's town, ON PAPER, the
actually sales, showed an increase of an average of 10% a year. That's
pretty substantial. Someone else said they were in the same situation but
chose not to purchase and some of the people that did were able to sell
their apts for $20k more only a year later.

I'm still going to meet with them, but I think I'm going to pass and save my
money. Maybe in July when I have some money saved and can look for a
cheaper, more appropriate place that I would like to stay in for several
years, I will.

thanks for the input everyone!

In article K6rZc.29831$nk.18942@okepread05,
Matt Warnock wrote:

2 things to add to the mix. I talked to some people at work. They are
strongly recommending me buy it because real estate is so high down here and
its increasing. Over the past 5 years, in one guy's town, ON PAPER, the
actually sales, showed an increase of an average of 10% a year. That's
pretty substantial. Someone else said they were in the same situation but
chose not to purchase and some of the people that did were able to sell
their apts for $20k more only a year later.


In my area of California it has been much more than 10% per year. So what?
Past performance doesn't indicate future results. If anything, real estate
is starting to slow. You might be able to buy the same place cheaper
in 10 months if you really want to buy it. That is the question you should
be asking: "Do I want to own this place?" If you want to own it then buy
it. If just want to own something then I wouldn't buy it.


Personally, I am familiar with Northern Virginia and the price seems high to
me. 1 bedroom apartments, even in Manhattan, don't exactly have the highest
demand. What happens if you get married and have a kid? Will you be able
to sell it? If not, will you be able to rent it for the ~$1500 it is
costing you? I'd buy it if it was, say, a 2 bedroom condo in Georgetown
but that's not the situation.


Dimitri

(v) wrote in message ...
\
But your main Q is, do you want to buy at all?


There's more on the rent vs. buy than just size of payment (after tax)
vs. rent or ROI vs. other investments.

1 You can then do with the interior what you will. I.e., paint,
change fixtures, etc. It's good it comes with washer/dryer hookups -
that's one standard quality diff between apartments and condos.
Note: hardwood floors are not a good idea unless you want noise
complaints from below.

2 Owners can't be priced out of the area the way renters can. I grew
up in what is now Silicon Valley and saw home values (and rents) go
from 25% higher than the national average to double between '74 and
'04. An even better example is Aspen.

3 You might get a deal from the new owners on mortgage terms, especially
down payment.

JR

"John A. Weeks III" wrote in message ...
In article qI7Zc.27599$nk.27168@okepread05, Matt Warnock
wrote:

Red alert! Battle stations! Raise shields Mr Worf.

This is WTDM (way too damned much). A one bedroom converted from
an apartement building should be in the range of $40K to $75K,

What part of the country is this in?????? That might be true
in Arkansas, but not in California.

See www.realtor.com to check condo prices in your area.
Figure the cost/square foot for the various offerings vs.
your own situation, with more adjustments for location,
condo complex quality, and individual unit features.

John Reece

In article , John Reece
wrote:

"John A. Weeks III" wrote in message
...
In article qI7Zc.27599$nk.27168@okepread05, Matt Warnock
wrote:

Red alert! Battle stations! Raise shields Mr Worf.

This is WTDM (way too damned much). A one bedroom converted from
an apartement building should be in the range of $40K to $75K,

What part of the country is this in?????? That might be true
in Arkansas, but not in California.

In downtown St. Paul, Minnesota, part of the 15th largest
metro area in the US and near the 10th largest airport in
the world, there is a top shelf building recently converted
from an Embassy Suites into condos. You can pick up a 1
bedroom condo with all new kitchen for right around $80K.
Higher floors are a bit more, lower floors are a bit less.
This price includes a deeded indoor heated parking spot.
Deals can be found if you are willing to look around a bit.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ==================

In article , (D. Gerasimatos) writes:
In article K6rZc.29831$nk.18942@okepread05,
Matt Warnock wrote:

be asking: "Do I want to own this place?" If you want to own it then buy
it. If just want to own something then I wouldn't buy it.

Yep. Another question to ask yourself: "why the high-pressure sales
tactics?"

Personally, I am familiar with Northern Virginia and the price seems high to
me. 1 bedroom apartments, even in Manhattan, don't exactly have the highest

It's crazy here. I'm in the Reston/Sterling area and am very familiar
with Falls Church since it's very near here. People keep speculating about the
market crashing, but in this area the market remains overheated. For a long
time I couldn't understand why, because if you look at the Dulles Toll Road
corridor for example, the road is lined with empty business offices. This
whole area (outside of the beltway, I'm not sure how D.C is) is crowded with
vacant office buildings, and the developers are building more. My thinking was
"with all those businesses gone, how can people afford these housing prices?"
A few weeks ago the Washington Post had an article that explained it
well. Apparently many of the cities in this area have development controls
that in effect encourage commercial building but restrict residential building.
(They explained their incentive for this as tax-based: businesses pay more
taxes than residences. I have no idea if that's true, but it's what they said.)
It cited one community in Maryland as an example, and figured it was planning
new office developments for something like 300,000 employees, and new
residential developments for something like 54,000 people. The city council
representative they interviewed said they were sure that the additional bodies
could easily find homes in nearby towns and county.
Another problem is areas like Loudon County where they have
restrictions on high- and medium-density residential zoning. Apparently many
areas in the county are limited to 5+ acre lots when considering new
development. That is, one house per 5+ acres! Sheesh!
It also explains the source of our horrendous traffic problems!

- Sharon