Housing Bubble or Greed?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Please give us some examples of voilitile housing prices for good location / school houses in the DC area?

If you are looking into a good area the advice on buying to the max is still the best.

What? This makes no sense. And really, I understand typos happen, but when you're advocating for paying top dollar for a top school area, it might be a good idea to spell check.

Buying "to the max" is never a good idea in times of uncertainty, no matter how solid the housing market in your desired area. You shouldn't deplete your savings, and you shouldn't set yourself up for a situation in which your monthly budget is maxed out, especially in an environment that constantly threatens increased taxes, increased fuel costs, increased food costs but flattening incomes.

The "to the max" advice depends on the idea that (a) your salary will continue to grow, so that at some point in the not-too-distant future, you won't be overstretched, (b) other costs will only rise as much or less than your salary, and (c) there is a plentiful supply of qualified buyers, so you could easily sell if (a) or (b) didn't work out.

Basically, I think all signs suggest that's just not the case. And while the economy may be improving in the rest of the country, the things that have kept the D.C. region's economy robust are starting to shift.

So when is a good time?

1990s Internet bubble don't buy
2001 Sept 11 / Stock crash don't buy
2005 housing bubble don't buy
2007 housing crash don't but
2013 bubble coming again don't buy

It seems no matter what everyone thinks there is a crisis. Get over it life is a crisis.

Here's a tip that's worked for me I bought in all times and have done so every 5 years without issues because I chose to buy SFH (no matter what size), NOT to compromise on location inside the beltway, near a metro and excellent schools.

Oh yeah forgot one the S&L crisis of the 80s.

So if you are so worried about uncertainty you'd be should've been renting for the the last 25 years + infinity.

[Anonymous]

Anonymous wrote:DC is a world unto itself, economy-wise. No one can predict whether this will continue.
If prices continue to rise, this is not a bubble. But no housing market goes up continually into... infinity. Every market has variation.
If something happens to hurt the DC economy, or to strengthen the rest of the nation's economy, the market here will cool. I don't mean tank. I mean some of the pressure will dissipate.
This stuff is hard to predict. Don't overbuy. Don't be in a hurry to make such a big purchase. Don't over-improve. They used to say, "buy the most expensive house you can afford." The logic was that the value will go up, and hopefully, so will your earnings. But with the housing market so volatile, and withl the job market uncertain, I don't put stock in that belief anymore. We are buying very conservatively. Don't buy into the hype, literally or figuratively. If a real estate agent is pushing you into a price range that scares you, listen to your instincts and back off. With the exception of a wealthy few, and of people snugly in a great home already, most new homebuyers and renters are over a barrel in this market. It's not you, and it's not just you. Think before you bid. Think before you escalate. And do not waive an inspection clause. If someone else gets the house because they did, let it go.

This is my comment. I add that there is heavy pressure on a limited number of neighborhoods because of a failure of social services in many other neighborhoods--- schools, safety, tranportation. If efficient public transportion(metro, trolleys) was ubiquitous, quality schools common, and violent crime less, buyers would have an exponentially larger pool of houses to choose from. Prices would be more affordable. The population attempting to buy into the modest-sized neighborhoods of Arlington, Del Ray, Upper NW, CCDC, Bethesda, etc., far exceeds what these neighborhoods can absorb. Frustrated buyers would do well to work for better schools, transportation and safety across the region to see their prospects improve, and to share the wealth with all our neighbors.

[Anonymous]

It is taken for granted that many neighborhoods are just off the map, off the table, don't we?

[Anonymous]

Anonymous wrote:It is taken for granted that many neighborhoods are just off the map, off the table, don't we?

...mean, "isn't it?" at the end there.

[Anonymous]

Anonymous wrote:Oh gawd, that's a beautiful condo though.

Honestly these days when condos have as much sq ft as houses (more, in the case of many many N Arl houses we've viewed), you can throw a rock out your window and hit metro, and condo community spaces are as big as some parks and whole community centers, what's the ulyimate difference?

Uhhhh...no shared walls and having to put up with neighbors' booming bass.

[Anonymous]

Anonymous wrote:

Anonymous wrote:DC is a world unto itself, economy-wise. No one can predict whether this will continue.
If prices continue to rise, this is not a bubble. But no housing market goes up continually into... infinity. Every market has variation.
If something happens to hurt the DC economy, or to strengthen the rest of the nation's economy, the market here will cool. I don't mean tank. I mean some of the pressure will dissipate.
This stuff is hard to predict. Don't overbuy. Don't be in a hurry to make such a big purchase. Don't over-improve. They used to say, "buy the most expensive house you can afford." The logic was that the value will go up, and hopefully, so will your earnings. But with the housing market so volatile, and withl the job market uncertain, I don't put stock in that belief anymore. We are buying very conservatively. Don't buy into the hype, literally or figuratively. If a real estate agent is pushing you into a price range that scares you, listen to your instincts and back off. With the exception of a wealthy few, and of people snugly in a great home already, most new homebuyers and renters are over a barrel in this market. It's not you, and it's not just you. Think before you bid. Think before you escalate. And do not waive an inspection clause. If someone else gets the house because they did, let it go.

This is my comment. I add that there is heavy pressure on a limited number of neighborhoods because of a failure of social services in many other neighborhoods--- schools, safety, tranportation. If efficient public transportion(metro, trolleys) was ubiquitous, quality schools common, and violent crime less, buyers would have an exponentially larger pool of houses to choose from. Prices would be more affordable. The population attempting to buy into the modest-sized neighborhoods of Arlington, Del Ray, Upper NW, CCDC, Bethesda, etc., far exceeds what these neighborhoods can absorb. Frustrated buyers would do well to work for better schools, transportation and safety across the region to see their prospects improve, and to share the wealth with all our neighbors.

+1000

This is exactly it. The reason why people are paying a million for a tiny old house is because there is a perception that there is only a small number of quality neighborhoods in the region.

So, yeah, if other areas were improved, then things would even out. There would be a larger pool of moderately priced houses in decent areas with decent schools.

But I think that the people who have already bought into those coveted neighborhoods are very active in keeping up the perception that their neighborhoods are really the only rational choices. I think, in part to both justify and maintain, their high property values, they participate in stigmatizing other areas, areas that would likely improve if people moved into them.

[Anonymous]

...Or if services improved for the people already living there, 17:22.

[Anonymous]

Anonymous wrote:...Or if services improved for the people already living there, 17:22.

Hopefully, they will. B/c, honestly, it's ridiculous to write off half the region.

[Anonymous]

Though the opposite appears to be the case in the NW. 25 yrs ago there was almost no middle class wotp. Since then many areas eotp have gentrified but prices wotp keep rising.

[Anonymous]

Rather, almost no middle class eotp....
The gentrification of the inner NW and Cap. Hill has made the whole city a more attractive place to live thus driving up prices everywhere. I guess this general trend will continue for some time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:DC is a world unto itself, economy-wise. No one can predict whether this will continue.
If prices continue to rise, this is not a bubble. But no housing market goes up continually into... infinity. Every market has variation.
If something happens to hurt the DC economy, or to strengthen the rest of the nation's economy, the market here will cool. I don't mean tank. I mean some of the pressure will dissipate.
This stuff is hard to predict. Don't overbuy. Don't be in a hurry to make such a big purchase. Don't over-improve. They used to say, "buy the most expensive house you can afford." The logic was that the value will go up, and hopefully, so will your earnings. But with the housing market so volatile, and withl the job market uncertain, I don't put stock in that belief anymore. We are buying very conservatively. Don't buy into the hype, literally or figuratively. If a real estate agent is pushing you into a price range that scares you, listen to your instincts and back off. With the exception of a wealthy few, and of people snugly in a great home already, most new homebuyers and renters are over a barrel in this market. It's not you, and it's not just you. Think before you bid. Think before you escalate. And do not waive an inspection clause. If someone else gets the house because they did, let it go.

This is my comment. I add that there is heavy pressure on a limited number of neighborhoods because of a failure of social services in many other neighborhoods--- schools, safety, tranportation. If efficient public transportion(metro, trolleys) was ubiquitous, quality schools common, and violent crime less, buyers would have an exponentially larger pool of houses to choose from. Prices would be more affordable. The population attempting to buy into the modest-sized neighborhoods of Arlington, Del Ray, Upper NW, CCDC, Bethesda, etc., far exceeds what these neighborhoods can absorb. Frustrated buyers would do well to work for better schools, transportation and safety across the region to see their prospects improve, and to share the wealth with all our neighbors.

+1000

This is exactly it. The reason why people are paying a million for a tiny old house is because there is a perception that there is only a small number of quality neighborhoods in the region.

So, yeah, if other areas were improved, then things would even out. There would be a larger pool of moderately priced houses in decent areas with decent schools.

But I think that the people who have already bought into those coveted neighborhoods are very active in keeping up the perception that their neighborhoods are really the only rational choices. I think, in part to both justify and maintain, their high property values, they participate in stigmatizing other areas, areas that would likely improve if people moved into them.

Throw in walkability and metro access (in blocks--not driving to a lot) and the list gets even tinier (ESP when you want quality public schools). I think only 1 or 2 neighborhoods in the entire DC area meet this description.

[Anonymous]

Ignoring the needs of some screws everyone. I don't see this notion soaking into the DMV zeitgeist anytime soon.

[Anonymous]

I moved to Capitol Hill in 1996. I never saw a child under the age of 14 and I never saw any white children at all. None.

Neighborhoods change.

[Anonymous]

Greed is under bidding houses and trying to make sellers take a lost. See works both ways.

It isn't the buyers responsibility to ensure that the seller breaks even or turns a profit. It is a business transaction and each party is trying to get the best deal for themselves. Ultimately, the market decides the value of property at any given time. That isn't greed.

[Anonymous]

Anonymous wrote:Ignoring the needs of some screws everyone. I don't see this notion soaking into the DMV zeitgeist anytime soon.

Somebody made a comment a few posts up about how "neighborhoods would improve if people moved there." "People?" Aren't there already people in neighborhoods? It's such a given that "people" means "white people," that a post like that just comes and goes.