DC Area Housing Bubble?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yeah and I'm waiting for this magical bubble to burst. LOL All of you seem so certain. Get real.

Hence the point of my post. It’s people like you that seem so certain that there isn’t a bubble or the market isn’t overheated.

So smug and all knowing.

Could be a bubble or maybe not. I'm not moving from my small house a mile from my office unless I win the lottery or double my salary. Same sentiment from at least twenty fri new.

This is us (Millennials who just bought our first house). We are 1.5 miles from our offices in downtown DC. We ain't going anywhere and our neighborhood is in the midst of a flurry of housing development. We do not want a commute. They aren't building any more land in our SFH neighborhood and the zoning doesn't allow big apartment buildings in our immediate blocks.

Short of a nuclear weapon detonating in DC, I don't see how there is a massive downturn (separate from a larger nationwide downturn). The GOP has zero desire to military spending - this is what really drives the DC economy. They will cut entitlements first, which has bigger reverberations throughout the rest of the country than here.

Here is more data on the DC housing market. The data show we have re-inflated, but much more gradually than in the 2006-2008 period. Prices today are more in line with the previous 30 years' trend.
https://districtmeasured.com/2017/05/30/dcs-median-home-price-3-times-more-than-median-family-income-in-1991-is-now-5-times-more/

Ah....”they arent building any more land in my neighborhood”..... i figure some idiot was going to bring this up.

What this chart didn't tell you is that in early 1990s, the mortgage rates were around 10% while in year 2016, they were less than 4%. So the housing affordability is very different even with the same income....

You seem to think interest rates have something to do with home prices. They don’t.

This idiocy is why all realtors should have to take basic courses in economics and statistics before getting their licenses.

No one who has ever so much as glanced in the general direction of an econ text book would ever say anything so stupid as "the price of an item has no impact on the demand for it!"

[Anonymous]

Anonymous wrote:

Anonymous wrote:^^ I think the issue here is that some people don't understand that DC isn't that expensive. They must have never lived in higher COL cities so it seems expensive to them. This is why they think it's a bubble.

Yup, exactly.

Sincerely,
Someone who has lived in LA, NYC, and Zurich

+up
Regards,
Someone who has lived in Hong Kong & Singapore.

[Anonymous]

OP, real estate can only go up, it never goes down. Bring on the interest only and negative amortization loans with prepayment penalties! What could go wrong???

Does that help you feel superior OP?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yeah and I'm waiting for this magical bubble to burst. LOL All of you seem so certain. Get real.

Hence the point of my post. It’s people like you that seem so certain that there isn’t a bubble or the market isn’t overheated.

So smug and all knowing.

Could be a bubble or maybe not. I'm not moving from my small house a mile from my office unless I win the lottery or double my salary. Same sentiment from at least twenty fri new.

This is us (Millennials who just bought our first house). We are 1.5 miles from our offices in downtown DC. We ain't going anywhere and our neighborhood is in the midst of a flurry of housing development. We do not want a commute. They aren't building any more land in our SFH neighborhood and the zoning doesn't allow big apartment buildings in our immediate blocks.

Short of a nuclear weapon detonating in DC, I don't see how there is a massive downturn (separate from a larger nationwide downturn). The GOP has zero desire to military spending - this is what really drives the DC economy. They will cut entitlements first, which has bigger reverberations throughout the rest of the country than here.

Here is more data on the DC housing market. The data show we have re-inflated, but much more gradually than in the 2006-2008 period. Prices today are more in line with the previous 30 years' trend.
https://districtmeasured.com/2017/05/30/dcs-median-home-price-3-times-more-than-median-family-income-in-1991-is-now-5-times-more/

Ah....”they arent building any more land in my neighborhood”..... i figure some idiot was going to bring this up.

What this chart didn't tell you is that in early 1990s, the mortgage rates were around 10% while in year 2016, they were less than 4%. So the housing affordability is very different even with the same income....

You seem to think interest rates have something to do with home prices. They don’t.

They do. But probably it's too hard for you to understand.

[Anonymous]

According to this, large numbers of people are still moving to DC...

http://www.businessinsider.com/states-americans-are-moving-to-2017-12

[Anonymous]

Anonymous wrote:According to this, large numbers of people are still moving to DC...

http://www.businessinsider.com/states-americans-are-moving-to-2017-12

That data does NOT show population growth. It’s merely showing what percentage of residents came from a different state. I’m this area, that often means MD and VA. In this area people routinely move in and out of the district to MD and VA. So such numbers will always be skewed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:According to this, large numbers of people are still moving to DC...

http://www.businessinsider.com/states-americans-are-moving-to-2017-12

That data does NOT show population growth. It’s merely showing what percentage of residents came from a different state. I’m this area, that often means MD and VA. In this area people routinely move in and out of the district to MD and VA. So such numbers will always be skewed.

Uh, if people are moving into DC from MD/VA it still means they are putting upward pressure on DC prices. The NW DC housing market doesn't give a sh#t if you are moving here from McLean or Missoula.

8.7% of DC residents had move into DC in the previous year. That's massive.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:According to this, large numbers of people are still moving to DC...

http://www.businessinsider.com/states-americans-are-moving-to-2017-12

That data does NOT show population growth. It’s merely showing what percentage of residents came from a different state. I’m this area, that often means MD and VA. In this area people routinely move in and out of the district to MD and VA. So such numbers will always be skewed.

Uh, if people are moving into DC from MD/VA it still means they are putting upward pressure on DC prices. The NW DC housing market doesn't give a sh#t if you are moving here from McLean or Missoula.

8.7% of DC residents had move into DC in the previous year. That's massive.

Huge logical leap. These are movers not home buyers. By your logic students coming to D.C. From MD to attend Georgetown/Gwu/etc and living in dorms are putting upward pressure on home prices.

[Anonymous]

The housing prices probably reflect the annual growth in jobs for the DMV. That creates separate pressure from what is predicted by looking only at a chart of family income.

[Anonymous]

It will be interesting. I think 10 years from now or maybe 5 we will see a flattening of prices inside the beltway and in DC - reflecting a more normal appreciation like the rest of the country. As much as people want to try and make DC unique in the same way that New York, Tokyo, Singapore, Hong Kong or Paris are unique, it just isn't. I have lived in Tokyo and you can't possibly compare DC to a place like that, and have visited all the others on business or vacation. I think the whole concept of driving to a place of work is also fading, and that too will have a massive impact on rents for DC office space, and also close-in housing.

So, what does that mean? I personally wouldn't buy today looking towards extended growth, but I would not be nervous extending to buy tying up a significant amount of net worth. Should be safe. We are considering leaving the area, and while we will be sad to leave friends, I am looking forward to not having so much tied up in my house in terms of net worth.

[Anonymous]

So to sum it up.
Maybe but probably no.
We’ll be happy to let you know in 5 years, at which time we will certainly be in a bubble. Or almost about to be in a Bubble. Unless we aren’t.
Clear? Good.

[Anonymous]

Anonymous wrote:Where else but in DC can I get a SFH for $900K within 15 minutes on the bus to my office on K Street and within the nuclear fallout zone of the White House? ...
For anyone who has never lived in a world class, international city DC probably seems expensive. But it's a god damn bargain compared to most major cities, taxes are relatively low, and we get all the best services because it's the seat of the most powerful government on earth.

I think people THINK prices are through the roof based only on hearsay. I just bought a 3 bedroom detached with a yard 2 blocks from metro in Brookland for under 500K. Anecdotal, yes, but the point is, we have not hit the value ceiling yet.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:^^ I think the issue here is that some people don't understand that DC isn't that expensive. They must have never lived in higher COL cities so it seems expensive to them. This is why they think it's a bubble.

Yup, exactly.

Sincerely,
Someone who has lived in LA, NYC, and Zurich

+up
Regards,
Someone who has lived in Hong Kong & Singapore.

Lived in NY, LA, Chicago and spent quite a bit of time in HK. All those cities offer considerably more dining, cultural or aesthetic value than the District, so I would expect to pay more to live there. But for what DC offers, it's certainly not overpriced.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:^^ I think the issue here is that some people don't understand that DC isn't that expensive. They must have never lived in higher COL cities so it seems expensive to them. This is why they think it's a bubble.

Yup, exactly.

Sincerely,
Someone who has lived in LA, NYC, and Zurich

+up
Regards,
Someone who has lived in Hong Kong & Singapore.

Lived in NY, LA, Chicago and spent quite a bit of time in HK. All those cities offer considerably more dining, cultural or aesthetic value than the District, so I would expect to pay more to live there. But for what DC offers, it's certainly not overpriced.

This.

[Anonymous]

So to sum up again.
DC is not in a bubble.
Unless it is.