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

[Anonymous]

Anonymous wrote:

Anonymous wrote:Honest question, but why would lower rates mean more demand? Wouldn't the ppl in the market for a house stay the same, they can just afford more? All these ppl looking for a home, would they not be looking if rates didn't drop?

I know people desperate to buy who literally can't afford to regardless - so rates don't matter if you don't have the income or down payment to afford the home.

What a revelation!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Honest question, but why would lower rates mean more demand? Wouldn't the ppl in the market for a house stay the same, they can just afford more? All these ppl looking for a home, would they not be looking if rates didn't drop?

I know people desperate to buy who literally can't afford to regardless - so rates don't matter if you don't have the income or down payment to afford the home.

What a revelation!

I mean this board is filled with people complaining about being priced out and hoping for a ton of foreclosures that just aren't happening - let alone in a market like D.C. where the jobs and careers haven't been touched.

Maybe they need a wake-up call.

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

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.

Although I agree COVID has pushed some people to buy, I don't believe it is panic buying. What you're seeing is a lot of the millennial generation that was always going to buy pushing their buys forward, or just finally making the jump. That isn't going to reverse.

[Anonymous]

Sorry Amazon HQ2 is 6 MILLION square feet and 35,000 employees.

[Anonymous]

Anonymous wrote: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.

July 2005

INTERVIEWER: Ben, there's been a lot of talk about a housing bubble, particularly, you know [inaudible] from all sorts of places. Can you give us your view as to whether or not there is a housing bubble out there?

BERNANKE: Well, unquestionably, housing prices are up quite a bit; I think it's important to note that fundamentals are also very strong. We've got a growing economy, jobs, incomes. We've got very low mortgage rates. We've got demographics supporting housing growth. We've got restricted supply in some places. So it's certainly understandable that prices would go up some. I don't know whether prices are exactly where they should be, but I think it's fair to say that much of what's happened is supported by the strength of the economy.

Anonymous wrote: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.

https://www.businessinsider.com/facebook-hiring-remote-work-director-permanent-work-from-home-shift-2020-9

"Mark Zuckerberg has said he expects half of the company's workforce to work remotely within the next 10 years."

https://www.businessinsider.com/salesforce-employees-can-work-from-home-permanently-2021-2

"Salesforce says 'the 9-to-5 workday is dead' and will provide 3 new ways for employees to work — including the possibility of working from home forever."

https://www.forbes.com/sites/danabrownlee/2020/05/18/twitter-square-announce-work-from-home-forever-optionwhat-are-the-risks/?sh=3fb8ef0c2565

"Recent announcements that virtually all Twitter and Square employees will have the option to work from home forever sent shock waves through business communities already grappling with the difficult decision of how and when to reopen amid the Covid-19 pandemic."

https://www2.deloitte.com/global/en/pages/tax/covid-19/where-your-employees-work-next-normal.html

A white paper in which Deloitte makes the argument that the majority of the white collar/tech/knowledge workforce will expect to telework/work remotely in the future, and companies need to embrace this to remain competitive.

https://www.reuters.com/article/us-health-coronavirus-goldman-sachs/goldman-sachs-ceo-says-staff-back-at-offices-in-asia-but-not-new-york-london-idUSKBN22H2IE

"What’s interesting, however, is that the current plan, even in the Asian offices, is meant to take Goldman from its current position of having only 2% of its staff in the offices, to 20% and then eventually to 50%. At present, there’s no plan at all to get the offices any more than half full. But where are the other 50% going to be? It’s likely that a lot of IT staff, including the “technology fellows” and “engineers” building trading platforms and risk management systems, will be best suited to working remotely; many of them may even prefer their own environment to the distractions of a bank. It also seems, anecdotally, to be the case that a lot of salespeople and traders, once removed from the proverbial bustle and energy of the trading floor, have begun to realise that it was more of an irritating distraction than a source of synergy, and that all the information they need to exchange can actually be typed into Bloomberg chat."

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m new to the DMV. We don’t plan to stay longer than 5 years so we watch the market very closely to ensure we don’t over renovate, etc. Not to hijack this post, but can someone explain to me why homes in CCDC seem to sell at a higher cost per square foot than CCMD. They seem very similar. Or does it come down to being “walkable” to metro and/or the 4 shops on CT? Generally curious.

Having a D.C. address and zip code has better cachet. That's basically it. You see the same thing with Potomac DC versus Potomac MD and the only difference is a dividing invisible line.

Property taxes in D.C. are also substantially lower. We only pay a city tax. Maryland residents pay both county and state at higher rates.

Immediately next to CCDC in MD the houses and the lots are bigger.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

July 2005

INTERVIEWER: Ben, there's been a lot of talk about a housing bubble, particularly, you know [inaudible] from all sorts of places. Can you give us your view as to whether or not there is a housing bubble out there?

BERNANKE: Well, unquestionably, housing prices are up quite a bit; I think it's important to note that fundamentals are also very strong. We've got a growing economy, jobs, incomes. We've got very low mortgage rates. We've got demographics supporting housing growth. We've got restricted supply in some places. So it's certainly understandable that prices would go up some. I don't know whether prices are exactly where they should be, but I think it's fair to say that much of what's happened is supported by the strength of the economy.

Anonymous wrote: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.

https://www.businessinsider.com/facebook-hiring-remote-work-director-permanent-work-from-home-shift-2020-9

"Mark Zuckerberg has said he expects half of the company's workforce to work remotely within the next 10 years."

https://www.businessinsider.com/salesforce-employees-can-work-from-home-permanently-2021-2

"Salesforce says 'the 9-to-5 workday is dead' and will provide 3 new ways for employees to work — including the possibility of working from home forever."

https://www.forbes.com/sites/danabrownlee/2020/05/18/twitter-square-announce-work-from-home-forever-optionwhat-are-the-risks/?sh=3fb8ef0c2565

"Recent announcements that virtually all Twitter and Square employees will have the option to work from home forever sent shock waves through business communities already grappling with the difficult decision of how and when to reopen amid the Covid-19 pandemic."

https://www2.deloitte.com/global/en/pages/tax/covid-19/where-your-employees-work-next-normal.html

A white paper in which Deloitte makes the argument that the majority of the white collar/tech/knowledge workforce will expect to telework/work remotely in the future, and companies need to embrace this to remain competitive.

https://www.reuters.com/article/us-health-coronavirus-goldman-sachs/goldman-sachs-ceo-says-staff-back-at-offices-in-asia-but-not-new-york-london-idUSKBN22H2IE

"What’s interesting, however, is that the current plan, even in the Asian offices, is meant to take Goldman from its current position of having only 2% of its staff in the offices, to 20% and then eventually to 50%. At present, there’s no plan at all to get the offices any more than half full. But where are the other 50% going to be? It’s likely that a lot of IT staff, including the “technology fellows” and “engineers” building trading platforms and risk management systems, will be best suited to working remotely; many of them may even prefer their own environment to the distractions of a bank. It also seems, anecdotally, to be the case that a lot of salespeople and traders, once removed from the proverbial bustle and energy of the trading floor, have begun to realise that it was more of an irritating distraction than a source of synergy, and that all the information they need to exchange can actually be typed into Bloomberg chat."

I was Mr. Bubble in 2004/2005/2006 etc. I was on all the blogs, craigslist, etc. screaming disaster. There is nothing comparable today to that bubble. That was a completely different situation. DC still isn't back to where it was in 2006.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

July 2005

INTERVIEWER: Ben, there's been a lot of talk about a housing bubble, particularly, you know [inaudible] from all sorts of places. Can you give us your view as to whether or not there is a housing bubble out there?

BERNANKE: Well, unquestionably, housing prices are up quite a bit; I think it's important to note that fundamentals are also very strong. We've got a growing economy, jobs, incomes. We've got very low mortgage rates. We've got demographics supporting housing growth. We've got restricted supply in some places. So it's certainly understandable that prices would go up some. I don't know whether prices are exactly where they should be, but I think it's fair to say that much of what's happened is supported by the strength of the economy.

Anonymous wrote: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.

https://www.businessinsider.com/facebook-hiring-remote-work-director-permanent-work-from-home-shift-2020-9

"Mark Zuckerberg has said he expects half of the company's workforce to work remotely within the next 10 years."

https://www.businessinsider.com/salesforce-employees-can-work-from-home-permanently-2021-2

"Salesforce says 'the 9-to-5 workday is dead' and will provide 3 new ways for employees to work — including the possibility of working from home forever."

https://www.forbes.com/sites/danabrownlee/2020/05/18/twitter-square-announce-work-from-home-forever-optionwhat-are-the-risks/?sh=3fb8ef0c2565

"Recent announcements that virtually all Twitter and Square employees will have the option to work from home forever sent shock waves through business communities already grappling with the difficult decision of how and when to reopen amid the Covid-19 pandemic."

https://www2.deloitte.com/global/en/pages/tax/covid-19/where-your-employees-work-next-normal.html

A white paper in which Deloitte makes the argument that the majority of the white collar/tech/knowledge workforce will expect to telework/work remotely in the future, and companies need to embrace this to remain competitive.

https://www.reuters.com/article/us-health-coronavirus-goldman-sachs/goldman-sachs-ceo-says-staff-back-at-offices-in-asia-but-not-new-york-london-idUSKBN22H2IE

"What’s interesting, however, is that the current plan, even in the Asian offices, is meant to take Goldman from its current position of having only 2% of its staff in the offices, to 20% and then eventually to 50%. At present, there’s no plan at all to get the offices any more than half full. But where are the other 50% going to be? It’s likely that a lot of IT staff, including the “technology fellows” and “engineers” building trading platforms and risk management systems, will be best suited to working remotely; many of them may even prefer their own environment to the distractions of a bank. It also seems, anecdotally, to be the case that a lot of salespeople and traders, once removed from the proverbial bustle and energy of the trading floor, have begun to realise that it was more of an irritating distraction than a source of synergy, and that all the information they need to exchange can actually be typed into Bloomberg chat."

So Goldman Asia is already at 50% capacity in offices when vaccines were just approved 30 days ago? Yeah. Okay. Let's see what happens by end of 2021 year.

In the memo, which was verified by a bank spokeswoman, Chief Executive Officer David Solomon said Goldman is also considering “the feasibility of testing (staff and visitors for the coronavirus), subject to availability and more information on the accuracy of results.”

Large banks worldwide have been developing plans to gradually return staff to offices after nearly two months of working remotely and from home during the outbreak of the novel coronavirus.

[Anonymous]

Another fun test case of this WFH scenario - Israel. The only country in the world with greater than 60% of their population already vaccinated.

https://www.haaretz.com/israel-news/.premium-israel-s-economy-will-return-in-april-analysts-say-but-not-to-normal-1.9462514

https://www.jpost.com/health-science/coronavirus-infection-down-vaccination-up-cabinet-to-meet-sunday-658858

“If all goes well, we hope we can open street shops and malls, and start carefully opening cultural shows for which entry will only be allowed for green passport holders,” Health Ministry Director-General Chezy Levy said in a weekend interview with KAN.

The Health Ministry has targeted February 23 as the start of the next phase of its plan, requiring a staged exit as was hoped for in the past, so that the impact of relief can be monitored. Levy said that the country will only fully understand the results of the various reliefs rolled out last week in about 10 days.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Honest question, but why would lower rates mean more demand? Wouldn't the ppl in the market for a house stay the same, they can just afford more? All these ppl looking for a home, would they not be looking if rates didn't drop?

I know people desperate to buy who literally can't afford to regardless - so rates don't matter if you don't have the income or down payment to afford the home.

What a revelation!

I mean this board is filled with people complaining about being priced out and hoping for a ton of foreclosures that just aren't happening - let alone in a market like D.C. where the jobs and careers haven't been touched.

Maybe they need a wake-up call.

OP here, our stagnated approach to the current housing market has everything to do with my spouses arrogance and sketchiness with anything real estate related. He’s an emotional buyer not a practical one so we’re always making bad investments to satisfy his mental well-being. I cannot tell you how many hundreds of thousands $$$$ it has cost us.
us

[Anonymous]

Anonymous wrote:Another fun test case of this WFH scenario - Israel. The only country in the world with greater than 60% of their population already vaccinated.

https://www.haaretz.com/israel-news/.premium-israel-s-economy-will-return-in-april-analysts-say-but-not-to-normal-1.9462514

https://www.jpost.com/health-science/coronavirus-infection-down-vaccination-up-cabinet-to-meet-sunday-658858

“If all goes well, we hope we can open street shops and malls, and start carefully opening cultural shows for which entry will only be allowed for green passport holders,” Health Ministry Director-General Chezy Levy said in a weekend interview with KAN.

The Health Ministry has targeted February 23 as the start of the next phase of its plan, requiring a staged exit as was hoped for in the past, so that the impact of relief can be monitored. Levy said that the country will only fully understand the results of the various reliefs rolled out last week in about 10 days.

I worked in Israel for years. If you strip out tourism, its economy is centered in just 1 city - Tel Aviv - with an MSA population fewer than 1m people, short commutes, and tiny apartments. So no, not a place to draw lessons from in any way.

[Anonymous]

Anonymous wrote:So Goldman Asia is already at 50% capacity in offices when vaccines were just approved 30 days ago? Yeah. Okay. Let's see what happens by end of 2021 year.

In the memo, which was verified by a bank spokeswoman, Chief Executive Officer David Solomon said Goldman is also considering “the feasibility of testing (staff and visitors for the coronavirus), subject to availability and more information on the accuracy of results.”

Large banks worldwide have been developing plans to gradually return staff to offices after nearly two months of working remotely and from home during the outbreak of the novel coronavirus.

...did you read any links I posted? Am I arguing with a robot?! (Jokes on me, if so.) Goldman is at 2-3% today, and they plan to ramp up to 50% eventually, with the other 50% of their workforce permanently work from home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Another fun test case of this WFH scenario - Israel. The only country in the world with greater than 60% of their population already vaccinated.

https://www.haaretz.com/israel-news/.premium-israel-s-economy-will-return-in-april-analysts-say-but-not-to-normal-1.9462514

https://www.jpost.com/health-science/coronavirus-infection-down-vaccination-up-cabinet-to-meet-sunday-658858

“If all goes well, we hope we can open street shops and malls, and start carefully opening cultural shows for which entry will only be allowed for green passport holders,” Health Ministry Director-General Chezy Levy said in a weekend interview with KAN.

The Health Ministry has targeted February 23 as the start of the next phase of its plan, requiring a staged exit as was hoped for in the past, so that the impact of relief can be monitored. Levy said that the country will only fully understand the results of the various reliefs rolled out last week in about 10 days.

I worked in Israel for years. If you strip out tourism, its economy is centered in just 1 city - Tel Aviv - with an MSA population fewer than 1m people, short commutes, and tiny apartments. So no, not a place to draw lessons from in any way.

D.C. is a city of fewer than 1m people, short commutes, and tiny apartments. What are you talking about?