I think the bubble is popping.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I live close to downtown, and neighborhoods are absolutely packed. They have been since May.

Downtown office buildings are definitely quieter, but it's July in DC and some places are targeting a Labor Day open.

Residential rents are also increasing across the board, at least in Dupont/Shaw/Logan Circle/U Street/Columbia Heights.

The people who think WFH will be a sea change need to start pointing to substantial differences in the CRE, i.e. for offices, market. Otherwise, I'm not buying that WFH is a permanent thing.

Oh, post pandemic world will be different. Our organization will allow people to choose a hybrid model and many will use this option. Very few will be going back 5 days a week.

Different (to some degree) is a given. I'm still looking for specifics that will impact the Res RE market. It seems everyone is guessing.

[Anonymous]

Anonymous wrote:We're not going back to five days in the office in our company. Many of us are WFH full time and corporate leadership has already confirmed it's permanent if we want to. The plan is for people to make an effort to come into the office every now and then. We're already drastically reducing office footprint and not renewing leases.

We're a consulting firm and quite a few were already WFH most of the time pre pandemic.

So the pandemic isn't that big a factor. WFH largely pre-pandemic policy. For the pandemic to change Res RE, there has to be a sea change. I don't see it...yet.

[Anonymous]

Trouble is places like Potomac, Rockville, Silver Spring, Gaithersburg were where folks who were dual Feds moved as priced out of Chevy Chase, Tenley Town, DC proper as recently as 2019.

Today even Gaithersburg is selling one million dollar homes and Potomac a nice large home in good shape, closer in on good block is like 1.5 million.

Sure there are less. But Potomac one million is a smaller fixer upper and as recently as 2011 one million in Potomac was a decent home.

Capital Heights in 2011 you could buy a wreck if a row house 600k put some elbow grease in and it more than doubled

Look folks still want to live close in. Small DC homes will still sell for a ton.

Large Potomac homes also will sell a lot but more building cost related as material has skyrocketed.

My block in Potomac all very large brick colonials buildings in the 1970s. My neighbor has a total square foot 7,000 square foot house all brick colonial with slate roof built in 1975 in mint condition as they gut renovated in 2018. That cost to rebuild is crazy!!

[Anonymous]

Anonymous wrote:Trouble is places like Potomac, Rockville, Silver Spring, Gaithersburg were where folks who were dual Feds moved as priced out of Chevy Chase, Tenley Town, DC proper as recently as 2019.

Today even Gaithersburg is selling one million dollar homes and Potomac a nice large home in good shape, closer in on good block is like 1.5 million.

Sure there are less. But Potomac one million is a smaller fixer upper and as recently as 2011 one million in Potomac was a decent home.

Capital Heights in 2011 you could buy a wreck if a row house 600k put some elbow grease in and it more than doubled

Look folks still want to live close in. Small DC homes will still sell for a ton.

Large Potomac homes also will sell a lot but more building cost related as material has skyrocketed.

My block in Potomac all very large brick colonials buildings in the 1970s. My neighbor has a total square foot 7,000 square foot house all brick colonial with slate roof built in 1975 in mint condition as they gut renovated in 2018. That cost to rebuild is crazy!!

Yep, I can agree with the Rockville/Gaithersburg/Potomac comment. People are getting priced out of DC, CCMD, Bethesda and not to mention Arlington, etc.

For another anecdote to this thread, I live in a nice neighborhood in Gaithersburg (right near Rio). Houses up until now have been increasing market value the past year (obviously) and have been selling in the 8s. Just the other day, a house got listed for mid 9s!! Either the realtor has a good handle on pricing and values or they are being incredibly greedy. My guess is the former but prices are still holding steady if not still increasing in this part of the county.

[Anonymous]

I think the question is if people don’t have to do five days how far out are they going to go? In my office people with a sufficient amount of seniority could WFH three days a week and the majority of them still lived relatively close (Arlington/falls church etc) but tended to be in less metro accessible areas

[Anonymous]

How is the condo market in DC?

[Anonymous]

Anonymous wrote:I think the question is if people don’t have to do five days how far out are they going to go? In my office people with a sufficient amount of seniority could WFH three days a week and the majority of them still lived relatively close (Arlington/falls church etc) but tended to be in less metro accessible areas

The thing about it is that especially in senior positions, you can work from home until there's a must-have face to face meeting with the senior leadership team because of yet another "crisis." Building permanent work from home into your calculations is a poor plan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think the question is if people don’t have to do five days how far out are they going to go? In my office people with a sufficient amount of seniority could WFH three days a week and the majority of them still lived relatively close (Arlington/falls church etc) but tended to be in less metro accessible areas

The thing about it is that especially in senior positions, you can work from home until there's a must-have face to face meeting with the senior leadership team because of yet another "crisis." Building permanent work from home into your calculations is a poor plan.

There’s also a lot of stuff that works much better with face-to-face. I’ve known folks who’ve had high-quality video conferencing long before it was common and they always said things that really mattered always required some in-person time.

[Anonymous]

Anecdotal re return to work and hybrid model. We are back in the office hybrid. I would say now 70% of people drive in vs what used to be less than 10%. Once everyone is back, even if on a hybrid, if metro is still seen as a super spreader waiting to happen, all of these people who have bought further out are going to hate their lives, as traffic is about to be bonkers. Even if you only have to come in 2 days a week, you are going to regret moving an hour away when that pandemic 1 hour in commute becomes 2 hours in.

[Anonymous]

Anonymous wrote:

I work in tech. Initially our company was going to bounce back to full time in person. Staff pushed back. Now we're looking at 3 days per week in the office. That's a pretty huge shift from our normal mode of living. With a schedule like that, I see absolutely no reason to blow $1.5M on a house in McLean just to save on commute. We are looking a couple counties west.

Everyone I know with 3 days a week in office (which is almost all of them) is still looking to buy in the DMV. You're willing to commute 6 hours a day? Good luck.

Lol, this forum. “A couple of counties west” is a lot more commuting but is not 6 hours a day.

With DMV traffic? Yes, it is. 3 hours to work and 3 hours from work if there's an accident on a bridge or the I-95 is backed up which it frequently is.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

I work in tech. Initially our company was going to bounce back to full time in person. Staff pushed back. Now we're looking at 3 days per week in the office. That's a pretty huge shift from our normal mode of living. With a schedule like that, I see absolutely no reason to blow $1.5M on a house in McLean just to save on commute. We are looking a couple counties west.

Everyone I know with 3 days a week in office (which is almost all of them) is still looking to buy in the DMV. You're willing to commute 6 hours a day? Good luck.

Lol, this forum. “A couple of counties west” is a lot more commuting but is not 6 hours a day.

With DMV traffic? Yes, it is. 3 hours to work and 3 hours from work if there's an accident on a bridge or the I-95 is backed up which it frequently is.

Hi geniuses, I'm the PP looking a couple counties west. I don't work in DC, I work in NOVA. It's not 3 hours to get to the office. Thanks.

[Anonymous]

Housing Market Update: Pending Sales Dip, Price Drops Becoming More Common

https://www.redfin.com/news/housing-market-update-price-drops-over-4pct/

[Anonymous]

Anonymous wrote:Housing Market Update: Pending Sales Dip, Price Drops Becoming More Common

https://www.redfin.com/news/housing-market-update-price-drops-over-4pct/

Wow is that headline misleading when you look at the data in the report. I mean, it seems clear that some of the edge is being taken off the frenzy. But when median home sales prices are up 21% (!!) year over year, it doesn't take much. Price drops are up... to 4%, still well below 2019 levels.

I think Redfin has realized that the people who go around trumpeting that real estate is going to crash any second no matter the fundamentals are also the people most susceptible to clickbait.

[Anonymous]

Anonymous wrote:Anecdotal re return to work and hybrid model. We are back in the office hybrid. I would say now 70% of people drive in vs what used to be less than 10%. Once everyone is back, even if on a hybrid, if metro is still seen as a super spreader waiting to happen, all of these people who have bought further out are going to hate their lives, as traffic is about to be bonkers. Even if you only have to come in 2 days a week, you are going to regret moving an hour away when that pandemic 1 hour in commute becomes 2 hours in.

I don’t see that as a realistic scenario. Those that are going to be doing a 70/30 model will just as likely still do metro if they were doing it before the pandemic. I don’t see this big shift away from metro that you are seeing and even if there is, there are still significantly less cars on the road to offset it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Housing Market Update: Pending Sales Dip, Price Drops Becoming More Common

https://www.redfin.com/news/housing-market-update-price-drops-over-4pct/

Wow is that headline misleading when you look at the data in the report. I mean, it seems clear that some of the edge is being taken off the frenzy. But when median home sales prices are up 21% (!!) year over year, it doesn't take much. Price drops are up... to 4%, still well below 2019 levels.

I think Redfin has realized that the people who go around trumpeting that real estate is going to crash any second no matter the fundamentals are also the people most susceptible to clickbait.

The point is not that it is "crashing". The point is that the frenzy is over. Now comes the hangover...and what happens from now on, remains to be seen.