How much higher do you think DC area prices can go long-term?

[Anonymous]

Anonymous wrote:EOTR is still very affordable. Oh wait, I forgot that when we talk about DC we're secretly only referring to NW.

Not once you factor in private school for two kids for at least 6 years. Charter lottery is nice and all but this is much bigger bet.

[Anonymous]

Anonymous wrote:EOTR is still very affordable. Oh wait, I forgot that when we talk about DC we're secretly only referring to NW.

Secret nothing. We looked EOTR, and the crime was enough to put us off. No thanks.

[Anonymous]

Anonymous wrote:EOTR is still very affordable. Oh wait, I forgot that when we talk about DC we're secretly only referring to NW.

There are entire sections of NW that are EOTP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:EOTR is still very affordable. Oh wait, I forgot that when we talk about DC we're secretly only referring to NW.

There are entire sections of NW that are EOTP.

Oh, wait. EOTR? Very few people will be willing to take that leap of faith just yet.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:EOTR is still very affordable. Oh wait, I forgot that when we talk about DC we're secretly only referring to NW.

There are entire sections of NW that are EOTP.

Oh, wait. EOTR? Very few people will be willing to take that leap of faith just yet.

East of anacostia river??? That is not a leap but straight up sky dive.

[Anonymous]

What the heck are you all talking about? My family lives a very comfortable life in PG County on one federal salary. PG is seen as some sort of ghetto, but its around #68 (out of 2500 or so) counties as ranked for median household income in the country. The schools are not as good at Montgomery County or the close in VA suburbs, but those areas have the absolute top schools in the country, so you really don't need to make too much of the comparison.

Living in NW DC and some of the "preferred" close in suburbs is totally unaffordable, but that is just those areas.

We own a 2300 sf house that is walkable to a few nice neighborhood amenities. Paid less then $300K a few years ago (and the value is similar today) Tons of great friends within a few blocks. Our young kids can play on our sidewalk with little supervision. Kids attend a great public Montessori school.

[Anonymous]

Anonymous wrote:What the heck are you all talking about? My family lives a very comfortable life in PG County on one federal salary. PG is seen as some sort of ghetto, but its around #68 (out of 2500 or so) counties as ranked for median household income in the country. The schools are not as good at Montgomery County or the close in VA suburbs, but those areas have the absolute top schools in the country, so you really don't need to make too much of the comparison.

Living in NW DC and some of the "preferred" close in suburbs is totally unaffordable, but that is just those areas.

We own a 2300 sf house that is walkable to a few nice neighborhood amenities. Paid less then $300K a few years ago (and the value is similar today) Tons of great friends within a few blocks. Our young kids can play on our sidewalk with little supervision. Kids attend a great public Montessori school.

We'll talk once kid is in high school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It is getting difficult for first-timers to afford. Good that this group is not needed in order for values to continue to rise due to the influx of cash from all around the world.

I think there may be some truth to this.
Where does this money come from? Are people here THAT much more productive than they are in other places?
DH and I are newly arrived Feds. We are completely priced out unless we move way, way out. We'd really like to be able to put some roots down here, but it looks extremely difficult.

Eh, foreign nationals aren't rushing over to purchase 1940s shacks in Arlington.

And as Fed tapers, these foreign currencies will just be worth a whole lot less.
http://m.us.wsj.com/articles/BL-REB-23567

You'd be surprised how many well off foreign nationals live In 1940s "shacks" in N Arlington ...

[Anonymous]

Anonymous wrote:The prices in the great neighborhoods will continue to go up, not so much in the not great neighborhoods. The DC area is still stratified. There are a few areas with awesome schools and amenities, and everyone wants to get into these, to avoid the horrible areas. Where I grew up there were lots of regular ol' middle class towns, here there are rich areas, and ghetto areas.

+1 The middle middle class tends to live out or in TH.
I think of it as a graph that looks like a mountain. Those on the top of the graph will continue to go inexorably up, while the middle and particularly the lower, tend to not increase much. So if you are in Chevy Chase, probably continuing to go up. If you are in Derwood, maybe just not going upwards in the same way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What the heck are you all talking about? My family lives a very comfortable life in PG County on one federal salary. PG is seen as some sort of ghetto, but its around #68 (out of 2500 or so) counties as ranked for median household income in the country. The schools are not as good at Montgomery County or the close in VA suburbs, but those areas have the absolute top schools in the country, so you really don't need to make too much of the comparison.

Living in NW DC and some of the "preferred" close in suburbs is totally unaffordable, but that is just those areas.

We own a 2300 sf house that is walkable to a few nice neighborhood amenities. Paid less then $300K a few years ago (and the value is similar today) Tons of great friends within a few blocks. Our young kids can play on our sidewalk with little supervision. Kids attend a great public Montessori school.

We'll talk once kid is in high school.

Not PP, but are you saying the high school situation is better in DC? As far as I can tell, people in DC don't have a better school situation than PG. The big advantage of DC is probably small commute but that usually comes with a small house. But don't suggest that people are paying a million dollars in DC for the schools.

People pay more for the schools in MOCO, but the commute is probably worse there than in PG (depending on where you are commuting to downtown).

I live in PG, and I actually don't want the prices in PG to go up astronomically. A modest increase each year is fine. It's better for tax assessments anyhow. I also don't want the density in PG that MOCO has. I'd like for PG to remain middle class.

But that's really not the topic of the thread. As for rising prices in DC, the problem is that when people talk about it, the real question is can salaries continue to go up in DC. That's where the bubble is. People at one point in history thought Detroit was a stable place. There were so many protected union jobs, it was a center of industry. What could go wrong? But times change, and unsustainable salaries are just that: unsustainable.

DC will never be detroit, because the government is not going to pack up and leave. But a lot of the contractor, IT, defense and intelligence jobs are dependent upon ever-increasing government budgets. And I don't think it is sustainable. Sequestration has not even taken full effect, and it isn't over. People don't realize future cuts in the works.

As baby boomers retire, most of those jobs are not being filled. They're being eliminated. The idea is to downsize.

a lot of retirees who remain in area and can still afford high prices for everything are retirees who cashed out one job and now "consult." But again, I don't think those salaries are sustainable at the level they are now.

It's not just in real estate that bubbles happen. And I think the bigger issue in DC is salaries, not real estate. Lets add to that that while DC was once thought of as a place where jobs were aplenty, it is increasingly becoming the case where for every position, there is a flood of overqualified applicants. It seems to me that will put downward pressure on salaries.

As for IT, so many of those positions can be done remotely. Expensive real estate makes teleworking more appealing to employers, contractors and feds alike. And teleworking also allows people to move farther out.

Sure, these are all long-term trends. And maybe things will still shake out to be okay. But I think it's short-sighted and naive to assume that things can keep going up at the rate they are now.

And for the posters who always chime in that DC is priced low compared to capital cities in other countries, they seem to miss one crucial point: capital cities in most other countries are not just the center of government but also the financial center and the center of commerce. DC is not the financial/commerce center of country. The dynamic of DC is very different from London or Paris or Tokyo.

The other thing is that these threads seem to assume that many people paying high prices for houses are not over-leveraged, but I think the "we make 300k HHI and are struggling" posts are evidence that there are a lot of people over-leveraged.

Of course, there's also the argument that there is going to be some huge wealth transfer because of baby boomers. But that assumes the baby boomers won't squander their wealth before they die.

[Anonymous]

PP - very good posts.

We have a house in London and are looking to buy here and it is very clear to us that DC and London are world apart when it comes to international inflows of cash. However, DC is certainly not Detroit either

There will always be cash in DC due to govt (both US and foreign) which will keep real estate prices in the desirable areas stable. As sequestration takes effect and job cuts happen, good school districts will become more attractive as people pull their children out of private school. Close in suburbs - well located for DC access and airports will also continue to rise or at least hold value.

All other areas will be subject to market vagaries and see booms and bust cycles.

[Anonymous]

The last two posts are spot on. It is refreshing to see some rationality on this board once in a while. The DC cheerleading gets really old. Job growth here has slowed considerably as of late, and there is no reason to expect that trend to reverse itself in the near term.

We just bought in North Arlington, and we expect to be here another 10 years or so. I fully anticipate that the home's value will change very little between now and then, with a potential for some substantial volatility over the next few years. There is no way in hell I would buy in this market if I expected to have to resell in less than a decade.

[Anonymous]

Anonymous wrote:The last two posts are spot on. It is refreshing to see some rationality on this board once in a while. The DC cheerleading gets really old. Job growth here has slowed considerably as of late, and there is no reason to expect that trend to reverse itself in the near term.

We just bought in North Arlington, and we expect to be here another 10 years or so. I fully anticipate that the home's value will change very little between now and then, with a potential for some substantial volatility over the next few years. There is no way in hell I would buy in this market if I expected to have to resell in less than a decade.

North Arlington prices are a little unique because they are at a saturation point where it is very over valued. I don't think prices will fall but they can't increase very much without throwing fundamentals out the window.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well I'm priced out and won't be buying.

--130K HHI

nonsense there is a place for everyone's price point.

I have a family and cannot afford a townhouse or a home on my income. 30K above the mean and median income in this area.

Depends where you want to buy. You could qualify for a townhouse in Reston/Herndon area. Townhouses start at $369K for 3 Br in Nirth Reston. South Reston is cheaper.

[Anonymous]

I agree north Arlington is somewhat unique in that the long run volatility (both up and down) will likely be low. This doesnt mean homes are overvalued in any meaningful sense; the lower risk is just being baked into the price.


I would be really concerned if we bought way outside the beltway. I see no upside there at all.

Anonymous wrote:

Anonymous wrote:The last two posts are spot
on. It is refreshing to see some rationality on this board once in a while. The DC cheerleading gets really old. Job growth here has slowed considerably as of late, and there is no reason to expect that trend to reverse itself in the near term.

We just bought in North Arlington, and we expect to be here another 10 years or so. I fully anticipate that the home's value will change very little between now and then, with a potential for some substantial volatility over the next few years. There is no way in hell I would buy in this market if I expected to have to resell in less than a decade.

North Arlington prices are a little unique because they are at a saturation point where it is very over valued. I don't think prices will fall but they can't increase very much without throwing fundamentals out the window.