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

[Anonymous]

Whether DC economy is in a bubble is a good question, but with housing its even more so. Prices in places like Arlington have tripled since 2000. With the influx of lobbyists and lawyers, have the average incomes tripled as well? From what we can tell, everyone who lives SFH North Arlington who is under 40 is either a Doctor, Lawyer, or Lobbyist; a few stragglers who might have bought before the 2000. But are there enough lawyers/lobbyist families in the pipeline to replace retiring baby boomers?

The real question for DC will be if the rest of the economy improves; DC Metro used to be a transient place, but now b/c no place else has jobs, people are staying. Once people have options to move to good jobs in more affordable or picturesque cities, that transient nature may re-emerge and lower the demand for housing.

[Anonymous]

Anonymous wrote:OP here. 15:18, It's actually not a forever home. It has four bedrooms, but two are up, one is in basement (I wouldn't really even call it a bedroom) and master is on main. I don't think it'll work when we have baby number 3 in the next 5 years or so.

I've been waiting for this damned bubble to pop for 7 years. I wonder if perhaps it's not a bubble. So confused!

Hi OP, 15:18 here. We felt the same way. The prices did come down from the peak though, and there is no telling where it will go from here, but I am fairly certain they will not go to pre-2000 levels. People need to live here, and most would rather rent their house out than selling it, if the prices went down significantly. We were sooo tired of renting and moving all these years, and are so happy now.

However, if you think the house won't work for you in only 5 years, I'd be cautious - it may not be the right house. 5 years will fly by, and you don't want to move again so soon! Do you have kids already, or plan on 3 in the next 5 years? If it is the latter: Picture yourself house hunting with 3 toddlers/infants. You will move and not have taken advantage of the school district. You will have paid tons of interest on your mortgage, without adding to the equity. Don't settle for less than the home you really love after waiting this long! Things happen, and plans change, and that is ok, but don't compromise too much right up front, imo. Good luck!

[Anonymous]

Hopefully you're on well/septic b/c when that grid breaks down, you'll be self-sufficient for a bit longer than those on public.

Also, grow a garden and start canning!

[Anonymous]

Anonymous wrote:Hopefully you're on well/septic b/c when that grid breaks down, you'll be self-sufficient for a bit longer than those on public.

Also, grow a garden and start canning!

How did we go from "I am buying at 1.4 mil house will we be affected by the Fed cuts" to the "start canning and stockpiling some wood, Apocalypse is coming! those depending on the grid will be screeweeed!"

[Anonymous]

Anonymous wrote:

Anonymous wrote:Hopefully you're on well/septic b/c when that grid breaks down, you'll be self-sufficient for a bit longer than those on public.

Also, grow a garden and start canning!

How did we go from "I am buying at 1.4 mil house will we be affected by the Fed cuts" to the "start canning and stockpiling some wood, Apocalypse is coming! those depending on the grid will be screeweeed!"

better believe it

Stop living in your bubbles, people!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Hopefully you're on well/septic b/c when that grid breaks down, you'll be self-sufficient for a bit longer than those on public.

Also, grow a garden and start canning!

How did we go from "I am buying at 1.4 mil house will we be affected by the Fed cuts" to the "start canning and stockpiling some wood, Apocalypse is coming! those depending on the grid will be screeweeed!"

better believe it

Stop living in your bubbles, people!

What do you call a bubble? The fact that majority of people live on the grid? You are talking about living off the grid = preparing for some sort of apocalyptic scenario.

You are off topic here. The thread is about RE prices with respect to potential job cuts, not the crush of entire civilization or emergency situations when public services fail. In this case, shouldn't you also be buying a gun in case those unprepared decide to swarm on your food stores? You are going to need some major ammunition because the ranks of the unprepared don't usually consist just of softie yuppie types.

[Anonymous]

The only thing I think can cause a huge housing crash here is a massive terrorist attack. One either so big as to cause a huge amount of damage (missile) or one so big that it affects everyone in some way (chemical attack). Other than that, we are good. The economy is more diverse now than during the govt cutbacks in the 90s. It's finally acting like a global city and the capitol of the most important country in the world. Before the recent boom, housing was GROSSLY underpriced compared to other global cities.

[Anonymous]

I see a lot of friends with government jobs here making more than private sector doing the same thing. They also get a location increase (since this is a high cost of living area)- and for some they get an allowance every month for living expenses. So we rented an apartment in the same building as a friend. His cost nothing out of pocket for him because it was in his "allotment" from the government. Ours cost almost $3k/month. We were dual income- he was single income- yet his spending power alone was much greater than ours for that very reason.
So when jobs like his get canned- or at the very least those benefits are reduced... don't you think that would be a bubble waiting to pop?

[Anonymous]

Anonymous wrote:I see a lot of friends with government jobs here making more than private sector doing the same thing. They also get a location increase (since this is a high cost of living area)- and for some they get an allowance every month for living expenses. So we rented an apartment in the same building as a friend. His cost nothing out of pocket for him because it was in his "allotment" from the government. Ours cost almost $3k/month. We were dual income- he was single income- yet his spending power alone was much greater than ours for that very reason.
So when jobs like his get canned- or at the very least those benefits are reduced... don't you think that would be a bubble waiting to pop?

What kind of federal employee are you talking about? Our COLA is minimal and no one I know, except military, gets an "allowance" for living expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I see a lot of friends with government jobs here making more than private sector doing the same thing. They also get a location increase (since this is a high cost of living area)- and for some they get an allowance every month for living expenses. So we rented an apartment in the same building as a friend. His cost nothing out of pocket for him because it was in his "allotment" from the government. Ours cost almost $3k/month. We were dual income- he was single income- yet his spending power alone was much greater than ours for that very reason.
So when jobs like his get canned- or at the very least those benefits are reduced... don't you think that would be a bubble waiting to pop?

What kind of federal employee are you talking about? Our COLA is minimal and no one I know, except military, gets an "allowance" for living expenses.

Wait, we don't even get a COLA.

[Anonymous]

Exactly! No bonus-frozen pay for the past 3 years and likely the next 4 so my purchasing power as a Fed is nil. If I worked in private sector I would be earning MORE and not be a scape goat/atm for the gov.

[Anonymous]

I think DC economy is starting to diversify as well. there is just a lot of money in this region, a lot of wealth that still has to go somewhere. I don't see this area imploding. We have potential to become another silicon valley, we have the money and the lay offs will make more talented workforce available. It's time for startups.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I see a lot of friends with government jobs here making more than private sector doing the same thing. They also get a location increase (since this is a high cost of living area)- and for some they get an allowance every month for living expenses. So we rented an apartment in the same building as a friend. His cost nothing out of pocket for him because it was in his "allotment" from the government. Ours cost almost $3k/month. We were dual income- he was single income- yet his spending power alone was much greater than ours for that very reason.
So when jobs like his get canned- or at the very least those benefits are reduced... don't you think that would be a bubble waiting to pop?

What kind of federal employee are you talking about? Our COLA is minimal and no one I know, except military, gets an "allowance" for living expenses.

Yeah, ditto this. Federal employee here I don't get COLA or an allowance for living expensive. And the location increase? That is based on the difference between private sector jobs and government jobs, it helps to put the government jobs on an even playing field w/the private sector (supposedly). That is why feds in Houston get paid more than Feds in DC.

[Anonymous]

I live very close to Clarendon and the $1.4 mil is high.....for that you can get totally rebuilt house (that neighbors hate because it's so big on lot). Find something cheaper close to same area...

My location, location, location perspective is that anything within mile of Metro in Arlington is pretty safe from price bubble issues. There are only so many houses that fit that description. The metro line is set and there is essentially no land to build more houses on in that 1 mile circle around each metro.

[Anonymous]

I live very close to Clarendon and the $1.4 mil is high.....for that you can get totally rebuilt house (that neighbors hate because it's so big on lot). Find something cheaper close to same area...

My location, location, location perspective is that anything within mile of Metro in Arlington is pretty safe from price bubble issues. There are only so many houses that fit that description. The metro line is set and there is essentially no land to build more houses on in that 1 mile circle around each metro.

Forgot to say that's why I bought SFH (for far less than what OP quoted) within mile of Clarendon (and to tie together another thread - on non-busy street).