<prompt> Human: I am going to put all the information out here, sorry about the amount of text and geographically specific references.My wife and are are 27 and 29 we are currently renting in Arlington VA just outside of DC. Our lease is over in April of 2015 so we are considering starting the purchase process of a property in January 2015. This is not our first home, we relocated to the DC area and sold our last home in the down market for a small loss.The building we are in is very old 1960 in south Arlington near National airport. We do not see ourselves living it through another lease April 2015 for many reasons such as coin laundry in the basement, apartment layout, surface parking but the price is right for now so we have stayed. With that being said, I could stay if I absolutely had to for financial reasons.We would like to stay in the north Arlington area along the orange line where 1br condos run from about 400k-480k with HOA at 350-450mo. Most of the condos we are targeting are on the upper end of that range due to the sq footage. The HOA includes some items that are important to us such as, rooftop pooldeck, outdoor common areas and grills, gym, 24hr concierge watersewertrashinsurance and of course common area maintenance.We plan to stay in the area long enough to justify purchasing a property, I have seen and used the NYT rent vs. buy calculator this sub typically suggests and it suggested purchasing would be recommended but not by much. The area we like is fairly expensive but moving any further away from the city would mean terrible commutes for us and I would need to buy a second carparking feesinsurance. We have no plans for kids in the future and the 1br space is adequate for us, most building I am targeting have some additional storage space in a common area too.Finances:Income - 7889.00 after taxesinsurance, wife has the ability to earn an extra 200wk occasionally but I dont count that. We each make about the same salary. I am still early in my career and she is about at a midpoint in hers, my salary may go up much more over time but hers will probably only go up at the normal rates of inflation I am not factoring that my income will go up every, just the numbers I have todayRent: 2000.00 incl pet fee, parking, electricgaswatertrashBills - PhoneInternetInsurance 384.00Credit Card, we pay off monthly and never carry a balance - Typically around 2000mo I am targeting 1800.00 going forward since I have noticed some wasteful spend.Investments - Together we have 55,000 in retirement accounts through our employers we rolled over. We have not been contributing as much since we moved to the area 2 years ago and decided to save money for a down payment. I feel comfortable contributing much more after we settle down and purchase something long term. I think we will have around 1500mo maybe more to easily to contribute after we make our purchase.This is a weird one but I have 160 ounces of silver american eagles that I can consider liquid in an emergency.Student Loans - Paid off! 0.0Transportation - We own 1 car that is paid for, 2008 Honda, I take the metro.Cash on hand - 60,000I have foretasted that by January I should have between 85k - 90k cash on hand by using some online calculators. We do strive to live fairly frugal, but also enjoy life so I factored in a few trips we have planned and our typical entertainment budgets. Our issue is the 20 down on the condo, I have no problem saving to the 20 by the end of summer 2015 but that would require us to sign for another lease or worst case go month to month at a cray premium of about 600mo. I am factoring in that I need to maintain some emergency funds and closing costs in a sellers market.We are considering doing a 85155 type mortgage to avoid PMI. Typically I would be against this, but I feel like I can pay this off very quickly within the first year since the 5 loan would only be around 20k-27k and greatly reduce my interest paid on that loan.A consideration we have long term is to not sell the condo until retirement and rent it out since that area is very transient, affluent, and desirable for many renters. I feel like we will live in that area for at least 10 years but after that we may feel like moving to a cheaper part of the country or a different city, so I wanted to consider renting the unit as an investment in the future since transaction costs to buysell are ridiculous. Rentals for the type of condo we are targeting typically range from 2200mo on the low end to 2600mo on the high end of our purchasing range. Thanks,  <response>: A few thoughts from a local: DC is the most expensive area in the country when comparing home prices vs incomes. 20 down is ideal but unobtainable for many here. Commercial landlords in Pentagon City Crystal City are both trying to redevelop the areas to add a ton of multifamily units. DCs current housing boom is also starting conversations among apartment owners interested in doing condo conversions to cash out on the hot housing market. All of this could mean excess supply and difficult resale in 5 years. These areas rely heavily on government contractors, and that industry is contracting. Crystal City especially has very high office vacancy, hence trying to redevelop it for multifamily Pentagon Citys retail has been dwindling for several years. You may be buying into a market that will see an increase of supply with decreased demand. Because condos are the lowest-hanging fruit in the housing market, they are hit the hardest in a pullback or downturn. The above conditions should be cause for careful deliberation. The last time the DC apartment environment was like this was in 2006. Of course the bubble may never pop, and you cant wait forever to find out, just be wary of the increased risk and exposure that comes from condos. Many townhouses will soon deliver in Potomac Yard Old Town. Old Town is especially stable, metro-accessible, and worth considering IMO, as are other areas on the Blue Yellow Orange lines Merrifield, Hoffman Center if you are only interested in VA. If you dont need Metro walkability, there are many nice areas of Arlington north of I-66. Successful investors that buy and then hold properties for retirement do so at a lower cost basis. A 500k condo with 400mo HOA that only rents for 2200mo is not going to be the gravy train you hope it will be. Vacancy, tenant turnover, leasing commissions, repairs and all sorts of miscellaneous expenses can make it difficult to cover your costs. If you want an eventual rental property, you need to look at fringe areas where values are already low and may rise in the future taking rents with them. Huntington is like this. Walkable to metro but older housing inventory and a muddied reputation, but yet only 500 yards from million-dollar condos and 2 luxury high rises planned in the next few years on top of Huntington Metro that may completely change the face of the neighborhood in time. You want to buy in areas that are gentrifying, not in areas that are well established and already expensive. I replied to a wall of text with another wall of text! : Good luck to both of you! 