What is truly going on with the DC area real estate market, please explain?

Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Hate to say this but for a city with a global profile, DC is still pretty cheap.


+1

DC is absurdly cheap. you can get a 4bd townhouse with decent schools in the inner core for 1.5M. This is absurdly cheap for many DC-type buyers.


Except there aren't that many of the types of buyers you are talking about in DC. It's not a finance town. It's a government town. There is more finance, tech, and venture capital in the DC area than ever before, but when you compare it to the cities you are talking about (NY, London, SF, Tokyo), there's no real comparison. If you work in finance, DC is second tier at best. So while it may seem like a deal to people in those industries, moving here is also almost always a step down professionally (unless it is a temporary relocation focused on a DC specific project or issue), so of course it is cheaper.

And I have a hard time seeing DC making the transformation into a first-tier finance town. I think the heart of DC's economy will always be the fed, which is why the city will always be a combination of lawyers, policy folks, domestic and international NGOs, and federal consultants. Plenty of money, but not the kind you see in those other cities. Which is why you see lots of homes in the inner core that are priced well for a dual-income professional couple with a couple kids they may want to send to private school, but not the kind of astronomical bananas real estate you see in San Francisco or NY. There's no obvious pathway to becoming a young millionaire in DC industry, like there is in those cities.



How is 1.5M finance type money? It’s more like two midlevel lawyers. Which DC has in droves.
Anonymous
Anonymous wrote:
Anonymous wrote:Prices are up in almost every city nationwide. DC actually underperforms the median by this metric.

Explanations:

1. Bubble (happened in 94, 06, etc...we're overdue for one)

2. Covid panic buys - people have fled apts/condos and that puts too much demand on the SFH market, once the vaccine is widespread, the pendulum will reverse

3. Hyperinflation on the horizon and everyone wants to buy hard assets; property is emotionally popular despite the fact that property tax hurts real estate more so than other assets

Personally I think it's equal parts 1, 2, and 3 above.

The X factors are:

1. Work from home. This is a real trend and workers will have extreme flexibility to choose their home city from now on. Where will everybody want to live? How much will taxes, weather, etc be a factor?

2. Political pressure as more millennials are locked out of home ownership. We know from history that the smaller the % of homeowners is, the more hostile the politics become towards homeowners. You can see this manifest in the YIMBY movements in California, property tax laws in Texas (with one homeowner exemption applied to owner occupied property only), and efforts to dramatically raise property taxes.

My prediction here is that the degree to which WFH is embraced by the Fortune 500 and all desirable employers will shock people, especially older workers who don't understand that tech changed the employer-employee power balance. As to where people will move, that I have no idea. As to #2, I think local policies will become increasingly hostile, quickly, to non-owner occupied properties. American voters will not tolerate what happened in Vancouver and Toronto to happen here. In this sense, there is a lot of common ground between BLM and the Trump base.


This is funny to me. You basically just picked the things you wanted because you hope it works that way. Foreclosures and a bubble aren't happening. They haven't happened even though you've been calling for it since 2015.

As for WFH...tell me, how is tech/Fortune 500 embracing WFH? Facebook already said if you choose to work outside of Silicon Valley (not even WFH just out of their regional preference) they will dock your pay. Amazon is moving forward with a 35,000 square 2nd headquarters in the DMV ready to open in 2022/2023. Financial companies have been caught trying to buy up vaccines to force traders back to the floors.

So again - where is your huge WFH movement? I think we'll see this in extremely small (read under 500 employees) companies. The kind that could barely afford the office space and had very few workplace benefits in the first place. Maybe even a few high-quality tech companies like Salesforce. But big ones? Like Goldman, Deloitte, Facebook, Google, Amazon. Not a chance.


Your x-factor is dying.

Anonymous
Oh its real quiet now huh?

Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Hate to say this but for a city with a global profile, DC is still pretty cheap.


+1

DC is absurdly cheap. you can get a 4bd townhouse with decent schools in the inner core for 1.5M. This is absurdly cheap for many DC-type buyers.


Except there aren't that many of the types of buyers you are talking about in DC. It's not a finance town. It's a government town. There is more finance, tech, and venture capital in the DC area than ever before, but when you compare it to the cities you are talking about (NY, London, SF, Tokyo), there's no real comparison. If you work in finance, DC is second tier at best. So while it may seem like a deal to people in those industries, moving here is also almost always a step down professionally (unless it is a temporary relocation focused on a DC specific project or issue), so of course it is cheaper.

And I have a hard time seeing DC making the transformation into a first-tier finance town. I think the heart of DC's economy will always be the fed, which is why the city will always be a combination of lawyers, policy folks, domestic and international NGOs, and federal consultants. Plenty of money, but not the kind you see in those other cities. Which is why you see lots of homes in the inner core that are priced well for a dual-income professional couple with a couple kids they may want to send to private school, but not the kind of astronomical bananas real estate you see in San Francisco or NY. There's no obvious pathway to becoming a young millionaire in DC industry, like there is in those cities.



How is 1.5M finance type money? It’s more like two midlevel lawyers. Which DC has in droves.


NP. At current interest rates, yes.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Hate to say this but for a city with a global profile, DC is still pretty cheap.


+1

DC is absurdly cheap. you can get a 4bd townhouse with decent schools in the inner core for 1.5M. This is absurdly cheap for many DC-type buyers.


Except there aren't that many of the types of buyers you are talking about in DC. It's not a finance town. It's a government town. There is more finance, tech, and venture capital in the DC area than ever before, but when you compare it to the cities you are talking about (NY, London, SF, Tokyo), there's no real comparison. If you work in finance, DC is second tier at best. So while it may seem like a deal to people in those industries, moving here is also almost always a step down professionally (unless it is a temporary relocation focused on a DC specific project or issue), so of course it is cheaper.

And I have a hard time seeing DC making the transformation into a first-tier finance town. I think the heart of DC's economy will always be the fed, which is why the city will always be a combination of lawyers, policy folks, domestic and international NGOs, and federal consultants. Plenty of money, but not the kind you see in those other cities. Which is why you see lots of homes in the inner core that are priced well for a dual-income professional couple with a couple kids they may want to send to private school, but not the kind of astronomical bananas real estate you see in San Francisco or NY. There's no obvious pathway to becoming a young millionaire in DC industry, like there is in those cities.



How is 1.5M finance type money? It’s more like two midlevel lawyers. Which DC has in droves.


What do you mean by finance type money? What's your difference in their incomes?
Anonymous
Basically lawyers, lobbyists, consultants are doing well while the middle class is completely hollowed out in this country, so places like DC are exploding while places with more blue collar jobs like say Baltimore or St Louis etc are doing terrible. The other symptom of this is that rents are stagnant while property values in places with white collar jobs explode. Couple this with low interest rates, and this discrepancy is really getting quite pronounced. As to where things go next? It’s anyone’s guess but I see the trend continuing for a while.

The two biggest wild card factors in my mind that could put a damper in the trend in my kind are taxes and interest rates. If rates really blow out this could put a damper in demand. If taxes really ramp up on high earners in the 200-1mm range this could also put a damper on demand.

The other wild card factor worth mentioning is that if this economic recovery really stalls and we do start to see job loss trickle into the white collar sphere, that could be bad for dc real estate prices.

We will see what happens. It’s always interesting in markets.
Anonymous
Where’s the PP who insisted WFH was permanent?

Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Hate to say this but for a city with a global profile, DC is still pretty cheap.


+1

DC is absurdly cheap. you can get a 4bd townhouse with decent schools in the inner core for 1.5M. This is absurdly cheap for many DC-type buyers.


Except there aren't that many of the types of buyers you are talking about in DC. It's not a finance town. It's a government town. There is more finance, tech, and venture capital in the DC area than ever before, but when you compare it to the cities you are talking about (NY, London, SF, Tokyo), there's no real comparison. If you work in finance, DC is second tier at best. So while it may seem like a deal to people in those industries, moving here is also almost always a step down professionally (unless it is a temporary relocation focused on a DC specific project or issue), so of course it is cheaper.

And I have a hard time seeing DC making the transformation into a first-tier finance town. I think the heart of DC's economy will always be the fed, which is why the city will always be a combination of lawyers, policy folks, domestic and international NGOs, and federal consultants. Plenty of money, but not the kind you see in those other cities. Which is why you see lots of homes in the inner core that are priced well for a dual-income professional couple with a couple kids they may want to send to private school, but not the kind of astronomical bananas real estate you see in San Francisco or NY. There's no obvious pathway to becoming a young millionaire in DC industry, like there is in those cities.



How is 1.5M finance type money? It’s more like two midlevel lawyers. Which DC has in droves.


What do you mean by finance type money? What's your difference in their incomes?


DC (and DCUM) tends to suck at quantitative things. Most of finance (and law) pulls in much less than $1.5M in HHI. But you’re wildly more likely to see that HHI (or higher) in finance than in law.
Anonymous
"Where’s the PP who insisted WFH was permanent?"

Not that poster but this is just re: NYC municipal workers. What about private sector workers? I read that twenty top tech and finance firms are decamping for FL b/c of the proposed massive tax package.
Anonymous
Anonymous wrote:"Where’s the PP who insisted WFH was permanent?"

Not that poster but this is just re: NYC municipal workers. What about private sector workers? I read that twenty top tech and finance firms are decamping for FL b/c of the proposed massive tax package.


Teachers in classrooms were step one. Municipal workers are step two. Private sector workers are step three.


Anonymous
Anonymous wrote:People don't talk about it but D.C. also handled Covid incredibly well. There are 10 testing centers within 5 miles of my home and at least 3 within walking distance. All free. All well done.

Vaccine distribution. Food distribution for the needy. Homeless put in hotels. Daily press briefings at the height. The city and the mayor cares about the residents and that's never been clearer (at least to me) than in this pandemic.


Compare DC to New York to realize how fortunate we have been during the pandemic.
Much smaller city, but people who put the city above politics.
Anonymous
Anonymous wrote:
Anonymous wrote:"Where’s the PP who insisted WFH was permanent?"

Not that poster but this is just re: NYC municipal workers. What about private sector workers? I read that twenty top tech and finance firms are decamping for FL b/c of the proposed massive tax package.


Teachers in classrooms were step one. Municipal workers are step two. Private sector workers are step three.




Step 3? More like step 1. Most private sector teachers for example have been back for 8 months. I'm a private sector worker and have been going in to the office off and on for longer.
Anonymous
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:"Where’s the PP who insisted WFH was permanent?"

Not that poster but this is just re: NYC municipal workers. What about private sector workers? I read that twenty top tech and finance firms are decamping for FL b/c of the proposed massive tax package.


Teachers in classrooms were step one. Municipal workers are step two. Private sector workers are step three.




Step 3? More like step 1. Most private sector teachers for example have been back for 8 months. I'm a private sector worker and have been going in to the office off and on for longer.


This is specifically for those who have been WFH full-time for a year. Some industries which technically could let their employees WFH never bothered and some (like medical employees) knew it was impossible - that’s you.

As for private school teachers - their parents are paying for the in-person experience
Anonymous
Anonymous wrote:"Where’s the PP who insisted WFH was permanent?"

Not that poster but this is just re: NYC municipal workers. What about private sector workers? I read that twenty top tech and finance firms are decamping for FL b/c of the proposed massive tax package.

Companies moving their headquarters is not a WFH revolution. That happens all the time. Also that piece aside I think tech will be one of the few industries that actually moves more towards a WFH model because of their workforce. But maybe not because younger workers might want the ability to socialize. Very isolating otherwise.
Anonymous
Anonymous wrote:
Anonymous wrote:People don't talk about it but D.C. also handled Covid incredibly well. There are 10 testing centers within 5 miles of my home and at least 3 within walking distance. All free. All well done.

Vaccine distribution. Food distribution for the needy. Homeless put in hotels. Daily press briefings at the height. The city and the mayor cares about the residents and that's never been clearer (at least to me) than in this pandemic.


Compare DC to New York to realize how fortunate we have been during the pandemic.
Much smaller city, but people who put the city above politics.


Are we living in the same city? In my part of town violent crime is through the roof and the homeless encampments are growing daily. Vaccine distribution has been a farce at best.
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