DC Housing Prices drop beginning

[Anonymous]

Anonymous wrote:

Anonymous wrote:It is hard for me to understand how real estate prices cannot be impacted by the economic shutdown, GDP decline and high levels of unemployment. But in my neighborhood- at least for now - houses are getting multiple bids and going under contract quickly. Stock market is doing well too. Of course this can all change but I am not seeing evidence of a decline yet.

It's not that hard to understand. Basically nobody who can afford a house in DC has a job that is going to be severely affected.

Waiters, bartenders, busboys, barbers, janitors, etc. rent rooms or small apartments. If they lose their jobs and get evicted it has no effect whatsoever on the price of a million dollar house. Even if a few people with million dollar houses do get laid off, a significant number of them have spouses who work or savings and can ride it out. Most professionals are still working or will be back to work in a few weeks/months and the market knows this.

Boeing just announced it's laying off 10-15% of its employees. That's 20-25 thousand people. They very intentionally included that non-union, white collar jobs (engineers, finance, managers) would be the hardest hit category.

I don't know if the trickle down effect on DC consulting companies will be a bloodbath but it is definitely going to hurt. You do people a huge disservice to pretend otherwise (and for what possible purpose?).

[Anonymous]

In a country where 155,000,000 people are employed, 25,000 people losing their jobs is not even a ripple.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It is hard for me to understand how real estate prices cannot be impacted by the economic shutdown, GDP decline and high levels of unemployment. But in my neighborhood- at least for now - houses are getting multiple bids and going under contract quickly. Stock market is doing well too. Of course this can all change but I am not seeing evidence of a decline yet.

It's not that hard to understand. Basically nobody who can afford a house in DC has a job that is going to be severely affected.

Waiters, bartenders, busboys, barbers, janitors, etc. rent rooms or small apartments. If they lose their jobs and get evicted it has no effect whatsoever on the price of a million dollar house. Even if a few people with million dollar houses do get laid off, a significant number of them have spouses who work or savings and can ride it out. Most professionals are still working or will be back to work in a few weeks/months and the market knows this.

Boeing just announced it's laying off 10-15% of its employees. That's 20-25 thousand people. They very intentionally included that non-union, white collar jobs (engineers, finance, managers) would be the hardest hit category.

I don't know if the trickle down effect on DC consulting companies will be a bloodbath but it is definitely going to hurt. You do people a huge disservice to pretend otherwise (and for what possible purpose?).

Boeing has been holding off layoffs since the 2019 fiasco where two international jetliners crashed into the ocean because of their malfeasance and cover-up. Then global airline companies halted or froze orders for the hundred million dollar planes they'd ordered until Boeing came back in and fixed the issue.

The only reason they didn't start layoffs then was because their private airline contracts were offset by all the money they made as a defense contractor.

All that to say - Boeing's layoffs are a longtime coming and have more to do with their travel/corporate partners and deals.

[Anonymous]

Anonymous wrote:Boeing has been holding off layoffs since the 2019 fiasco where two international jetliners crashed into the ocean because of their malfeasance and cover-up. Then global airline companies halted or froze orders for the hundred million dollar planes they'd ordered until Boeing came back in and fixed the issue.

The only reason they didn't start layoffs then was because their private airline contracts were offset by all the money they made as a defense contractor.

All that to say - Boeing's layoffs are a longtime coming and have more to do with their travel/corporate partners and deals.

I agree with you and that's not only the case for Boeing but many large companies...but how does that change the impact of white collar layoffs which are now happening?

There are hundreds of thousands of well-paid professional workers across the travel, hospitality, defense and consulting sectors who are going to get hammered unless we magically rebound to where we were in January.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Boeing has been holding off layoffs since the 2019 fiasco where two international jetliners crashed into the ocean because of their malfeasance and cover-up. Then global airline companies halted or froze orders for the hundred million dollar planes they'd ordered until Boeing came back in and fixed the issue.

The only reason they didn't start layoffs then was because their private airline contracts were offset by all the money they made as a defense contractor.

All that to say - Boeing's layoffs are a longtime coming and have more to do with their travel/corporate partners and deals.

I agree with you and that's not only the case for Boeing but many large companies...but how does that change the impact of white collar layoffs which are now happening?

There are hundreds of thousands of well-paid professional workers across the travel, hospitality, defense and consulting sectors who are going to get hammered unless we magically rebound to where we were in January.

This is a thread on D.C. housing prices - so the following may seem callous but its an important distinction -

I think the hurt for Boeing at least is being localized. Do I think Boeing's factories and engineering teams in Washington are going through a world of hurt right now? Yes, I do.

But Boeing is losing a boatload of money from the airline industry which could afford to give them a 'grace period' in 2019 because everything was all good.

Now that its 2020 the airlines are circling the drain and calling in every debt they can. Including offloading useless planes they can't fly.

If a quarter to half of your normal profit margins are dying what do you do? You double down on what's STILL profitable.

In this case defense contracts. The U.S. government is upping its expenditure and that money is going straight into the pockets of local DMV contractors.

All that to say -- compartmentalization is a real thing and I'll be surprised to see layoffs at Boeing Intelligence, Analytics, Operations and Software Engineering in THIS area.

Boeing Washington is screwed though. Three of their largest plants are in WA. The plant in New Orleans is exclusively a NASA facility and shouldn't be affected for another fiscal year at minimum. Same with the plant in California which is Air Force owned-and-operated in conjunction with Boeing + Northrup Grunman etc

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Boeing has been holding off layoffs since the 2019 fiasco where two international jetliners crashed into the ocean because of their malfeasance and cover-up. Then global airline companies halted or froze orders for the hundred million dollar planes they'd ordered until Boeing came back in and fixed the issue.

The only reason they didn't start layoffs then was because their private airline contracts were offset by all the money they made as a defense contractor.

All that to say - Boeing's layoffs are a longtime coming and have more to do with their travel/corporate partners and deals.

I agree with you and that's not only the case for Boeing but many large companies...but how does that change the impact of white collar layoffs which are now happening?

There are hundreds of thousands of well-paid professional workers across the travel, hospitality, defense and consulting sectors who are going to get hammered unless we magically rebound to where we were in January.

This is a thread on D.C. housing prices - so the following may seem callous but its an important distinction -

I think the hurt for Boeing at least is being localized. Do I think Boeing's factories and engineering teams in Washington are going through a world of hurt right now? Yes, I do.

But Boeing is losing a boatload of money from the airline industry which could afford to give them a 'grace period' in 2019 because everything was all good.

Now that its 2020 the airlines are circling the drain and calling in every debt they can. Including offloading useless planes they can't fly.

If a quarter to half of your normal profit margins are dying what do you do? You double down on what's STILL profitable.

In this case defense contracts. The U.S. government is upping its expenditure and that money is going straight into the pockets of local DMV contractors.

All that to say -- compartmentalization is a real thing and I'll be surprised to see layoffs at Boeing Intelligence, Analytics, Operations and Software Engineering in THIS area.

Boeing Washington is screwed though. Three of their largest plants are in WA. The plant in New Orleans is exclusively a NASA facility and shouldn't be affected for another fiscal year at minimum. Same with the plant in California which is Air Force owned-and-operated in conjunction with Boeing + Northrup Grunman etc

The capacity people have for denial continues to impress me, as usual.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Boeing has been holding off layoffs since the 2019 fiasco where two international jetliners crashed into the ocean because of their malfeasance and cover-up. Then global airline companies halted or froze orders for the hundred million dollar planes they'd ordered until Boeing came back in and fixed the issue.

The only reason they didn't start layoffs then was because their private airline contracts were offset by all the money they made as a defense contractor.

All that to say - Boeing's layoffs are a longtime coming and have more to do with their travel/corporate partners and deals.

I agree with you and that's not only the case for Boeing but many large companies...but how does that change the impact of white collar layoffs which are now happening?

There are hundreds of thousands of well-paid professional workers across the travel, hospitality, defense and consulting sectors who are going to get hammered unless we magically rebound to where we were in January.

This is a thread on D.C. housing prices - so the following may seem callous but its an important distinction -

I think the hurt for Boeing at least is being localized. Do I think Boeing's factories and engineering teams in Washington are going through a world of hurt right now? Yes, I do.

But Boeing is losing a boatload of money from the airline industry which could afford to give them a 'grace period' in 2019 because everything was all good.

Now that its 2020 the airlines are circling the drain and calling in every debt they can. Including offloading useless planes they can't fly.

If a quarter to half of your normal profit margins are dying what do you do? You double down on what's STILL profitable.

In this case defense contracts. The U.S. government is upping its expenditure and that money is going straight into the pockets of local DMV contractors.

All that to say -- compartmentalization is a real thing and I'll be surprised to see layoffs at Boeing Intelligence, Analytics, Operations and Software Engineering in THIS area.

Boeing Washington is screwed though. Three of their largest plants are in WA. The plant in New Orleans is exclusively a NASA facility and shouldn't be affected for another fiscal year at minimum. Same with the plant in California which is Air Force owned-and-operated in conjunction with Boeing + Northrup Grunman etc

The capacity people have for denial continues to impress me, as usual.

You don't have to believe me or even look at the trends yourself.

Listen to the Boeing CEO's talks with his shareholders. The only thing he's highlighting is airline industry contracts. Not defense.

“We expect it will take two to three years for travel to return to 2019 levels and an additional few years beyond that for the industry’s long-term trend growth to return,” he said.

Speaking at the company’s annual meeting of shareholders, which was held virtually because of the pandemic, he added that when the commercial airline market stabilizes, it “will be smaller and our customers’ needs will be different.”

https://www.seattletimes.com/business/boeing-aerospace/boeing-ceo-air-travel-wont-return-to-2019-level-for-two-to-three-years/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Boeing has been holding off layoffs since the 2019 fiasco where two international jetliners crashed into the ocean because of their malfeasance and cover-up. Then global airline companies halted or froze orders for the hundred million dollar planes they'd ordered until Boeing came back in and fixed the issue.

The only reason they didn't start layoffs then was because their private airline contracts were offset by all the money they made as a defense contractor.

All that to say - Boeing's layoffs are a longtime coming and have more to do with their travel/corporate partners and deals.

I agree with you and that's not only the case for Boeing but many large companies...but how does that change the impact of white collar layoffs which are now happening?

There are hundreds of thousands of well-paid professional workers across the travel, hospitality, defense and consulting sectors who are going to get hammered unless we magically rebound to where we were in January.

This is a thread on D.C. housing prices - so the following may seem callous but its an important distinction -

I think the hurt for Boeing at least is being localized. Do I think Boeing's factories and engineering teams in Washington are going through a world of hurt right now? Yes, I do.

But Boeing is losing a boatload of money from the airline industry which could afford to give them a 'grace period' in 2019 because everything was all good.

Now that its 2020 the airlines are circling the drain and calling in every debt they can. Including offloading useless planes they can't fly.

If a quarter to half of your normal profit margins are dying what do you do? You double down on what's STILL profitable.

In this case defense contracts. The U.S. government is upping its expenditure and that money is going straight into the pockets of local DMV contractors.

All that to say -- compartmentalization is a real thing and I'll be surprised to see layoffs at Boeing Intelligence, Analytics, Operations and Software Engineering in THIS area.

Boeing Washington is screwed though. Three of their largest plants are in WA. The plant in New Orleans is exclusively a NASA facility and shouldn't be affected for another fiscal year at minimum. Same with the plant in California which is Air Force owned-and-operated in conjunction with Boeing + Northrup Grunman etc

The capacity people have for denial continues to impress me, as usual.

You don't have to believe me or even look at the trends yourself.

Listen to the Boeing CEO's talks with his shareholders. The only thing he's highlighting is airline industry contracts. Not defense.

“We expect it will take two to three years for travel to return to 2019 levels and an additional few years beyond that for the industry’s long-term trend growth to return,” he said.

Speaking at the company’s annual meeting of shareholders, which was held virtually because of the pandemic, he added that when the commercial airline market stabilizes, it “will be smaller and our customers’ needs will be different.”

https://www.seattletimes.com/business/boeing-aerospace/boeing-ceo-air-travel-wont-return-to-2019-level-for-two-to-three-years/

Do you think a $6 trillion 2020-2021 deficit and the election of a Democratic President, House, and Senate could impact the defense budget?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Boeing has been holding off layoffs since the 2019 fiasco where two international jetliners crashed into the ocean because of their malfeasance and cover-up. Then global airline companies halted or froze orders for the hundred million dollar planes they'd ordered until Boeing came back in and fixed the issue.

The only reason they didn't start layoffs then was because their private airline contracts were offset by all the money they made as a defense contractor.

All that to say - Boeing's layoffs are a longtime coming and have more to do with their travel/corporate partners and deals.

I agree with you and that's not only the case for Boeing but many large companies...but how does that change the impact of white collar layoffs which are now happening?

There are hundreds of thousands of well-paid professional workers across the travel, hospitality, defense and consulting sectors who are going to get hammered unless we magically rebound to where we were in January.

This is a thread on D.C. housing prices - so the following may seem callous but its an important distinction -

I think the hurt for Boeing at least is being localized. Do I think Boeing's factories and engineering teams in Washington are going through a world of hurt right now? Yes, I do.

But Boeing is losing a boatload of money from the airline industry which could afford to give them a 'grace period' in 2019 because everything was all good.

Now that its 2020 the airlines are circling the drain and calling in every debt they can. Including offloading useless planes they can't fly.

If a quarter to half of your normal profit margins are dying what do you do? You double down on what's STILL profitable.

In this case defense contracts. The U.S. government is upping its expenditure and that money is going straight into the pockets of local DMV contractors.

All that to say -- compartmentalization is a real thing and I'll be surprised to see layoffs at Boeing Intelligence, Analytics, Operations and Software Engineering in THIS area.

Boeing Washington is screwed though. Three of their largest plants are in WA. The plant in New Orleans is exclusively a NASA facility and shouldn't be affected for another fiscal year at minimum. Same with the plant in California which is Air Force owned-and-operated in conjunction with Boeing + Northrup Grunman etc

The capacity people have for denial continues to impress me, as usual.

You don't have to believe me or even look at the trends yourself.

Listen to the Boeing CEO's talks with his shareholders. The only thing he's highlighting is airline industry contracts. Not defense.

“We expect it will take two to three years for travel to return to 2019 levels and an additional few years beyond that for the industry’s long-term trend growth to return,” he said.

Speaking at the company’s annual meeting of shareholders, which was held virtually because of the pandemic, he added that when the commercial airline market stabilizes, it “will be smaller and our customers’ needs will be different.”

https://www.seattletimes.com/business/boeing-aerospace/boeing-ceo-air-travel-wont-return-to-2019-level-for-two-to-three-years/

Do you think a $6 trillion 2020-2021 deficit and the election of a Democratic President, House, and Senate could impact the defense budget?

Honestly I don't know. Elections are fickle - so we may or may not have a Dem Legislature + Presidency. Even if we do, are you forgetting that 08-09 the Congressional majority was Democrats? Obama's presidency started in January 2009.

Beyond that, the deficit in 2009 was close to $2 Trillion. Meanwhile -

Throughout the recession, one major city stood out as an oasis for jobs and growth: Washington, D.C.

Supported by a gusher of federal borrowing and spending, the District of Columbia was the nation’s only metropolitan area that never stopped growing. It stood as a beacon for the nation’s millions of job hunters, from recent college graduates seeking careers in civil service to well-heeled lawyers cashing in on a bonanza of work stemming from health care and financial reform.

Being the center of government, Washington is used to being insulated from national economic trends. But the disconnect became particularly pronounced during the Great Recession — thanks to the federal government’s own expansionary response.

https://www.washingtontimes.com/news/2010/oct/17/in-throes-of-recession-capital-stands-apart/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Boeing has been holding off layoffs since the 2019 fiasco where two international jetliners crashed into the ocean because of their malfeasance and cover-up. Then global airline companies halted or froze orders for the hundred million dollar planes they'd ordered until Boeing came back in and fixed the issue.

The only reason they didn't start layoffs then was because their private airline contracts were offset by all the money they made as a defense contractor.

All that to say - Boeing's layoffs are a longtime coming and have more to do with their travel/corporate partners and deals.

I agree with you and that's not only the case for Boeing but many large companies...but how does that change the impact of white collar layoffs which are now happening?

There are hundreds of thousands of well-paid professional workers across the travel, hospitality, defense and consulting sectors who are going to get hammered unless we magically rebound to where we were in January.

This is a thread on D.C. housing prices - so the following may seem callous but its an important distinction -

I think the hurt for Boeing at least is being localized. Do I think Boeing's factories and engineering teams in Washington are going through a world of hurt right now? Yes, I do.

But Boeing is losing a boatload of money from the airline industry which could afford to give them a 'grace period' in 2019 because everything was all good.

Now that its 2020 the airlines are circling the drain and calling in every debt they can. Including offloading useless planes they can't fly.

If a quarter to half of your normal profit margins are dying what do you do? You double down on what's STILL profitable.

In this case defense contracts. The U.S. government is upping its expenditure and that money is going straight into the pockets of local DMV contractors.

All that to say -- compartmentalization is a real thing and I'll be surprised to see layoffs at Boeing Intelligence, Analytics, Operations and Software Engineering in THIS area.

Boeing Washington is screwed though. Three of their largest plants are in WA. The plant in New Orleans is exclusively a NASA facility and shouldn't be affected for another fiscal year at minimum. Same with the plant in California which is Air Force owned-and-operated in conjunction with Boeing + Northrup Grunman etc

The capacity people have for denial continues to impress me, as usual.

You don't have to believe me or even look at the trends yourself.

Listen to the Boeing CEO's talks with his shareholders. The only thing he's highlighting is airline industry contracts. Not defense.

“We expect it will take two to three years for travel to return to 2019 levels and an additional few years beyond that for the industry’s long-term trend growth to return,” he said.

Speaking at the company’s annual meeting of shareholders, which was held virtually because of the pandemic, he added that when the commercial airline market stabilizes, it “will be smaller and our customers’ needs will be different.”

https://www.seattletimes.com/business/boeing-aerospace/boeing-ceo-air-travel-wont-return-to-2019-level-for-two-to-three-years/

Do you think a $6 trillion 2020-2021 deficit and the election of a Democratic President, House, and Senate could impact the defense budget?

Honestly I don't know. Elections are fickle - so we may or may not have a Dem Legislature + Presidency. Even if we do, are you forgetting that 08-09 the Congressional majority was Democrats? Obama's presidency started in January 2009.

Beyond that, the deficit in 2009 was close to $2 Trillion. Meanwhile -

Throughout the recession, one major city stood out as an oasis for jobs and growth: Washington, D.C.

Supported by a gusher of federal borrowing and spending, the District of Columbia was the nation’s only metropolitan area that never stopped growing. It stood as a beacon for the nation’s millions of job hunters, from recent college graduates seeking careers in civil service to well-heeled lawyers cashing in on a bonanza of work stemming from health care and financial reform.

Being the center of government, Washington is used to being insulated from national economic trends. But the disconnect became particularly pronounced during the Great Recession — thanks to the federal government’s own expansionary response.

https://www.washingtontimes.com/news/2010/oct/17/in-throes-of-recession-capital-stands-apart/

A Biden-led Democratic party is never going to stop spending, they'll just spend it on slightly less obvious handout to the rich, and slightly more obvious handouts to the poor. The centrist (for the US, right wing for the world) DNC will ensure the military industrial complex keeps on churning so their donors stay happy. DC will thrive, DC will grow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It is hard for me to understand how real estate prices cannot be impacted by the economic shutdown, GDP decline and high levels of unemployment. But in my neighborhood- at least for now - houses are getting multiple bids and going under contract quickly. Stock market is doing well too. Of course this can all change but I am not seeing evidence of a decline yet.

It's not that hard to understand. Basically nobody who can afford a house in DC has a job that is going to be severely affected.

Waiters, bartenders, busboys, barbers, janitors, etc. rent rooms or small apartments. If they lose their jobs and get evicted it has no effect whatsoever on the price of a million dollar house. Even if a few people with million dollar houses do get laid off, a significant number of them have spouses who work or savings and can ride it out. Most professionals are still working or will be back to work in a few weeks/months and the market knows this.

haha..basically there is no relationship between supply and demand. there is no difference in buying power if one spouse gets laid off. and of course, all doctors are lawyers getting lower incomes doesn't matter, because there are some whose income hasn't gone down...whatever happens, even if there is a shutdown of economic activity, house prices in DC area will not go down significantly...because everyone works in million-dollar government jobs...hey wait, am I making sense?

[Anonymous]

time will tell, but properties are still flying off the market and there's only so much land in the area.

[Anonymous]

Takes more than one data point to describe a line.

[Anonymous]

This point that people loosing theirs jobs are primarily waiters and bartenders, who are not relevant to the housing market for SFH strikes me as a very sheltered and naive view. What about the people who own the bars and restaurants where the laid off waiters and bartenders used to work? What about professionals who work in the travel and hospitality industries, for example? There are so many people who are impacted by the current crisis.

[Anonymous]

Anonymous wrote:This point that people loosing theirs jobs are primarily waiters and bartenders, who are not relevant to the housing market for SFH strikes me as a very sheltered and naive view. What about the people who own the bars and restaurants where the laid off waiters and bartenders used to work? What about professionals who work in the travel and hospitality industries, for example? There are so many people who are impacted by the current crisis.

Just be patient; the drop is coming. We are already seeing it in Arlington as the Amazon binge cools off. Houses in Pentagon City and Del Ray are selling for 10% less than they would have otherwise - check out sale prices in the last week in both neighborhoods compared to 6 weeks ago.

We are in a situation where nationally we will likely have unemployment above 15% for the next 18 months and will potentially see a global depression into the late 2020s. I would not touch the DC housing market until at least this October. Having said that, I do not think we will see a genuine crash in real estate prices in this area given increased government spending on contractors, but I do believe we will see at least a 15% drop by next year.