DC has several programs to get people buying houses. It's more common here than elsewhere to purchase a home w/less than 20% down. I was able to through the VA, but assuming that's not an option for you, there are other programs even for folks at your income level which provide incentive to buy. While I don't have any personal experience with it, I've heard fairly positive things about DC Opens Doors, a program to help first-time buyers.
If you are looking to buy, I would look:
-Across the river in Anacostia: High crime, but HUGE upside potential due to long term public-private investment ventures in infrastructure and mixed use development.
-SW Waterfront: This neighborhood is a little rough in some areas, and probably will be for a while, but there are some decent homes in the somewhat reasonable $400-500k range (I realize how ridiculous that sounds, but you have to live here to understand. A lot has already changed w/the project to improve the waterfront and revitalize some area parks.
-Northeast DC; in the Trinidad, Atlas, NoMa, Union Market area: You're a couple years late on this if you're looking for a steal, but if you want an area that's already hip and still on the front end of a tidal wave of investment, this is the place. Whole Foods, REI, artisanal shops, luxury condos, and an absolutely massive northward expansion of Union Station are going to change this neighborhood and (hopefully) make its local homeowners big bucks. If it isn't obvious, this is where I chose to buy.
-NW and Capitol Hill (both Southeast and Northeast) are just overpriced if you ask me, unless you had gotten in several years ago.
-Georgetown. No.
If you can deal with little space, I would vote DC. You'll pay more, but the city is very easy to get around by bike - so easy, in fact, that many go completely carless here. Good luck and PM me if you have any questions! I've been here for nearly 4 years and spent about a year of that looking for a home to purchase.