I don’t have much money – Should I buy in a crummy neighborhood?

Dear Nancy,

I don’t qualify for much, but I really want to buy a house. Especially now while the prices and interest rates are low. Is it better to buy something in a not so good area, just to get in on this market?


Hey Randy,

I know that I’m practically a nag telling people to buy now while the market is down. But, should you buy no matter what? You can’t afford the prices in a good area and we all know the most important 3 things to remember about buying real estate is location, location, location.

Some of the best deals to be had over time, is to buy in an area that is changing for the better. Twenty years ago the Columbia neighborhood was a transitional neighborhood, mostly dominated by rentals. Now it is one of the highest priced in all of Bellingham when you look at price per square foot. It’s happening to the Letter Streets neighborhood now. Even 10 years ago, no one wanted to buy there and now is very sought after, with its character homes and walk anywhere convenience.

How do you determine if your target neighborhood is transitioning up or down? One way is to drive the neighborhood and see how many owners are making improvements to their houses. How many look like rentals? How are the homes maintained, in general? What is the zoning? What are people saying about the neighborhood? Bellingham is small enough, you can get some good intel.

If the neighborhood has a low owner occupant level and is getting worse, I’m not saying you can’t buy there, but it better be a reallllly good deal with some kind of upward potential.

Ideally, you should buy a first home that will be a stepping stone to a better property in a few years, or one you’d be happy to keep as a rental long term. Don’t buy a house somewhere you don’t want to live.

While you are looking for that super deal, see what you can do to shave your living costs and bank more money. Get a second job for a little while. Do whatever you can to get a bigger down payment then you won’t have to buy something you wished you hadn’t.

Best of luck.