Should We Be Scared--Housing Prices Tied to the Federal Government?

[Anonymous]

I'm one of the posters who complained here about low inventory. Looking for a home in Clarendon. We finally found one we like at the top of our price range. But now I'm getting cold feet. Every day NPR has a segment on sequestration and how it would destroy the local economy. And even if sequestration didn't happen, it seems like the federal government will have to do some belt tightening some time. while that may be a good thing, that makes me very worried about housing prices here.

I think back to just a decade ago when NoVa was dirt cheap. It seems crazy that now it's full of million dollar homes. Maybe our market now is an aberration?

Is our $1.4 million dollar house the result of a bubble?

Paralyzed by indecision. What do you think, sages of DC Urban Moms? Are you worried about home prices in the NoVA area? Why or why not?

[Anonymous]

I would be worried if either of you are defense contractors. If you can afford it and jobs are stable then go for it. Yes, housing prices may take a hit due to sequestration but such a gamble regardless.

[Anonymous]

Honestly, I'm in the "mildly concerned" camp. I don't really think sequestration will go through.

[Anonymous]

The only thing you can do is make sure you're buying a house you want to stay in for a good, long time.

[Anonymous]

Anonymous wrote:The only thing you can do is make sure you're buying a house you want to stay in for a good, long time.

^^ITA.

OP, if this is your forever home (and as PP said you can afford it on one salary or savings), then go for it. If this is above your means and you may relocate, then wait for the bottom because it may come sooner than January.

I agree that sequestering won't happen, however Greece is going to default in a few months and Romney, likely to win shortly after that, will make large spending cuts everywhere. Not just defense. Then DC will hit rock bottom.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The only thing you can do is make sure you're buying a house you want to stay in for a good, long time.

^^ITA.

OP, if this is your forever home (and as PP said you can afford it on one salary or savings), then go for it. If this is above your means and you may relocate, then wait for the bottom because it may come sooner than January.

I agree that sequestering won't happen, however Greece is going to default in a few months and Romney, likely to win shortly after that, will make large spending cuts everywhere. Not just defense. Then DC will hit rock bottom.

LOL.

Not likely.

Even if somehow how does manage to pull that rabbit out of the hat, Congress won't go along.

[Anonymous]

I would not overinvest in a house at this juncture. If you can find a place that you can comfortably afford (i.e. without impinging on your living costs and various savings goals) then go for it. If not, you might want to hold off for a couple of years and see what happens. I think it is very unlikely that we will see rapid house price appreciation in the DC region over the medium term, and there is a reasonable chance that house prices will fall somewhat in real terms.

[Anonymous]

Okay, here is a different perspective. We bought our house in 2008 right as the housing market collasped. People thought we were crazy but we used it to our advantage and got a great deal (bought from an investor who wanted to the house off his books by the end of the year). Low interest rates also make this a good time to buy. If you plan on being in the house for a long time I would not worry.

[Anonymous]

Clarendon isn't going anywhere. It's a great location, close to DC. People will always want to live there for a variety of reasons.
Is it a SFH? Probably not too much downside. Max $200k. If you will be there for a long time, I'd go for it.

[Anonymous]

Anonymous wrote:Clarendon isn't going anywhere. It's a great location, close to DC. People will always want to live there for a variety of reasons.
Is it a SFH? Probably not too much downside. Max $200k. If you will be there for a long time, I'd go for it.

At $1.4 million, it better be a SFH.

[Anonymous]

I wouldn't worry about it. People were afraid to buy when the big debt debate was going on and prices have only gone up since then. If the sentiment was that prices in the area are poised to go down there would be a lot more houses on the market but I think the opposite is true. With interest rates where they are I would buy in a close in neighborhood like Clarendon. I'm not sure I would buy in a farther out area like Fairfax or Loudoun where demand seems to be declining (and the next generation does not want to live) but I think in Clarendon you'll be fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The only thing you can do is make sure you're buying a house you want to stay in for a good, long time.

^^ITA.

OP, if this is your forever home (and as PP said you can afford it on one salary or savings), then go for it. If this is above your means and you may relocate, then wait for the bottom because it may come sooner than January.

I agree that sequestering won't happen, however Greece is going to default in a few months and Romney, likely to win shortly after that, will make large spending cuts everywhere. Not just defense. Then DC will hit rock bottom.

LOL.

Not likely.

Even if somehow how does manage to pull that rabbit out of the hat, Congress won't go along.

If Greece goes under and the economy sinks further, no one is getting re-elected, guaranteed.

[Anonymous]

How long have we been talking about Greece? I wouldn't make a decision to buy a house in Clarendon based on what might happen in Greece! I swear this has been going on for two years and, if anything, has quieted down lately. This whole tax/budget debate in Congress is just posturing and will be resolved at the last minute like always.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The only thing you can do is make sure you're buying a house you want to stay in for a good, long time.

^^ITA.

OP, if this is your forever home (and as PP said you can afford it on one salary or savings), then go for it. If this is above your means and you may relocate, then wait for the bottom because it may come sooner than January.

I agree that sequestering won't happen, however Greece is going to default in a few months and Romney, likely to win shortly after that, will make large spending cuts everywhere. Not just defense. Then DC will hit rock bottom.

LOL.

Not likely.

Even if somehow how does manage to pull that rabbit out of the hat, Congress won't go along.

If Greece goes under and the economy sinks further, no one is getting re-elected, guaranteed.

But neither of those things are likely to happen, so there's no problem.

Greece is fine. If it was gonna go under it would have happened by now. The economy's not going to get worse. It may hold steady or improve slightly. We'll see 180,000 jobs created on Friday.

[Anonymous]

Anonymous wrote:How long have we been talking about Greece? I wouldn't make a decision to buy a house in Clarendon based on what might happen in Greece! I swear this has been going on for two years and, if anything, has quieted down lately. This whole tax/budget debate in Congress is just posturing and will be resolved at the last minute like always.

Read the most recent news. IMF cut off the gravy train. Greece will be out of cash in September if Germany doesn't pay out again.