Do you think dc housing is still overpriced?

[Anonymous]

We are looking for a house out in Burke/west Springfield and we feel like a lot of places are still overpriced. Most we look at (400,000 - 500,000) are still 10-20% higher than when purchased in 2004-2007 during the housing boom. This is especially true of lower priced townhouses. We just want to be careful not to pay too much so that if there is another housing bust we don't end up upside down. (don't worry we're putting 20-30% down). Do you think sellers are unrealistic around here or is the market just going to stay up?

[Anonymous]

DC is not, but Burke may be. Totally different markets.

[Anonymous]

Anonymous wrote:DC is not, but Burke may be. Totally different markets.

THat's true. We've been watching houses in that area (BUrke) and stuff seems to sit for a while but eventually sells at or 5% under asking price. So I guess if it's selling it's technically priced "correctly". I wouldn't be surprised if it drops a bit more though. My husband thinks it will drop if the federal government actually starts cutting jobs. I think that's pretty unlikely though.

[Anonymous]

I was bored one evening (OK, really really bored) and decided to look up the houses that we seriously considered a couple of years ago when we were looking, and compare what we were going to pay for them and what they were actually bought for.

It was quite interesting: on average, the houses we saw sold at 98% of asking price. But, the houses we saw in VA sold at 95%, MD at 97%, and DC @ 100% which is mainly due to one outlier which sold at 88%, but the others sold at 100-103% of asking price (one was at 108%). So, my little unscientific full of caveats analysis my housing market.

[Anonymous]

Yes, it is. Read an article recently mentioning that home prices have been falling nationally among metropolitan housing markets, except for in Washington, where prices have increased since last March year 2010.

[Anonymous]

I live in West Springfield, and I don't think the prices are going to go any lower for single family houses. If anything, they'll go up when so many jobs move to the proving center and Fort Belvoir. I haven't been following the townhouse market, though.

[Anonymous]

People have to remember that DC is a changed area from what it was. Pre 2001 housing was underpriced compared to salaries. It was actually a pretty good bargain.

A lot has changed in 10 years. The amount of jobs that came here in that timeframe is just incredible. If the defense budget gets cut, these jobs will be switched to other agencies. We are not going to see the contraction like what happened in the 90s.

DC is the capital of the most influential country in the world. Look at other similar capitals, Paris, London, etc. Super expensive. DC has finally moved up to that class of cities it always should have been.

Prices are not going any lower here. Even in the outer suburbs. Between BRAC and government agencies moving many of their buildings further away from the urban core, this entire region will continue to do well.

[Anonymous]

I agree that prices are not going to go down, at least not in close-in DC. I don't necessarily think they'll go up much any time soon, but I think those waiting for prices to drop before buying are going to spend the same amount on a house with a higher interest rate loan.

[Anonymous]

Given the high rent inflation we have in the area, we are actually probably going to see a pretty nice appreciation in nominal terms over the next few years. Nothing spectacular, but 3-4% a year on a 550K house is a lot of goddamn money.

[Anonymous]

Agree. Depends on specific market. DC/walkable areas of N.Arlington- not at all. Further outside...parts of Ffx, Loudon, PrinceWilliam, quite possibly overpriced still.

People on this board sometimes refer to Clarendon as over-priced...when what they mean is they think the size of the house does not justify the price. This is ludicrous..do you know what people get in Manhattan, parts of DC, London for their $? Location is a HUGE factor in price regardless of size of house. There has been zero inventory for the past 5 years. It has great public schools, walk-ability, 3 metro stops and is 2 miles from DC. TraderJ oes, Whole Foods, Restaurants galore. So many of these neighborhoods are now pricing out anyone without at least 7-figures to spend and it is never going to go into a free-fall tumble. There are virtually no foreclosures in the area. This area is only going to get tighter like most desirable neighborhoods. So many people buying in the last few years had to have superior credit and subject to extensive checks by lenders.

[Anonymous]

Depends where in West Springfield. I agree with PP that houses near the Ft. Belvoir easy access roads are selling like hot cakes - my friend just sold hers in 3 days! Insane. And she had multiple bids - went for $5K over asking price. Her agent said that was pretty typical in her neighborhood.

If a house is priced right, it will sell. End of story.

If you are putting 20% down, what are you worried about? We purchased our house in West Springfield in 2005 - at the height of the boom - and we STILL aren't upside down. We put 20% down (used the rest of our money from the sale of our first house to pay off student loans) and we still aren't upside down! If we had to sell today we could basically walk away scott free, maybe a small profit. Not much after closing costs, though. I'm not happy about losing the equity, but I think your fears about putting 20% down and then going upside down on your mortgage are a bit unfounded.

[Anonymous]

how are they priced vs. the most recent tax assessments? When I was recently house-hunting in Arlington, I noticed that most of the houses that sold quickly (in my price range) were priced within 100%-110% of the tax assessment. the houses that sat on the market were often at 120% or above. (and were sometimes in poor condition.) Not every improvement is captured in the assessments, so it isn't a perfect measure, but I did see a definite pattern.

I feel like in the close-in suburbs like Arlington, there are still a few out-of-touch sellers with houses priced at 2007 levels, trying to make $300K on a house they bought for $200K 10 years ago, and haven't improved. Those houses are sitting. The house I bought sat on the market for over 1.5 months because the seller was asking too much for it. I saw it a day after she dropped the price, and bought it.

Personally, I'm not sure I'd buy a townhouse out in the not-as-close-in suburbs if I could help it. I feel like in the suburbs like Burke and Springfield, there's more of a market for SFH. I wouldn't buy another townhouse unless it was walkable to metro.

[Anonymous]

Parts of DC proper are a different world from even the close in burbs. That is just a fact. Those prices won't be coming down any time soon. It's amazing that people are willing to spend $800k - $1.5m for shitty school districts.

[Anonymous]

Anonymous wrote:Parts of DC proper are a different world from even the close in burbs. That is just a fact. Those prices won't be coming down any time soon. It's amazing that people are willing to spend $800k - $1.5m for shitty school districts.

Welcome the new normal. Most of my peers aren't going to take on a three-hour daily commute because the school district is shitty. They're going to either evaluate the neighborhood school (many of which are quite good), or go the charter route. A general rule of thumb: if it's walkable and dense and inside-the-Beltway, it's going to hold it's value. If it's suburban and sprawly, (even if it's in DC), it's overpriced.

It's supply and demand--there's a huge oversupply of suburban cul-de-sac housing stock in the region, and in the US in general, that's going to take a long time to clear off the market. There's an undersupply of, say, townhouses three blocks from H Street, or just off of the commercial strip in Del Ray. Since those areas are incredibly desireable to the millennials, that's where they're moving. And where upper middle-class folks move, that's where the schools are going to see a massive improvement as well.

[Anonymous]

What about Olney? Do you think the prices will decrease further in Olney.