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

[Anonymous]

I recognize this is not a purely DMV-related link, but this person's feed is a non-partisan, non-political look at the RE market stats each week. Here is last week's post:

https://twitter.com/mikesimonsen/status/1358881536976719873

[Anonymous]

Anonymous wrote:I recognize this is not a purely DMV-related link, but this person's feed is a non-partisan, non-political look at the RE market stats each week. Here is last week's post:

https://twitter.com/mikesimonsen/status/1358881536976719873

Ouch. Inventory has plummeted.

[Anonymous]

I worked for a member of the DC city Council while in grad school about 20 years ago. The transformation of DC has been breathtaking. Cops use to escort us to evening meetings at schools and now they ate performing well and feel like places of learning. Same with all aspects of the City. I am thrilled

[Anonymous]

Long term the factors that are going to drive the market are these:

1. In and close to DC, there is a limited supply of land. The one thing you cannot produce more of in DC is land.

2. The opposite is true in the outer suburbs. You can always go out another few miles and add on another ring of new construction. There is a huge supply of land in the outer suburbs, and will be for a while.

What does this mean? DC prices may flatten, but they will not collapse and will keep rising at a steady rate.

Suburban prices, at some point, are going to crash. The demand will drop, the supply will stay stable...boom. Drop in prices. Over time they will recover, so you will be fine if you are in for the long haul, and nothing to worry about if you plan on buying your house and living in it for a while...but short-timers and speculators will at some point find themselves losing money.

[Anonymous]

Anonymous wrote:I worked for a member of the DC city Council while in grad school about 20 years ago. The transformation of DC has been breathtaking. Cops use to escort us to evening meetings at schools and now they ate performing well and feel like places of learning. Same with all aspects of the City. I am thrilled

Its not and never called the DC City Council.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I worked for a member of the DC city Council while in grad school about 20 years ago. The transformation of DC has been breathtaking. Cops use to escort us to evening meetings at schools and now they ate performing well and feel like places of learning. Same with all aspects of the City. I am thrilled

Its not and never called the DC City Council.

NP - it absolutely is referred to as the DC City Council. See for example this language, “ It is a regulatory board comprised of 11 members appointed by the Mayor and confirmed by the DC City Council” as found at:

https://does.dc.gov/service/apprenticeship-council

[Anonymous]

Anonymous wrote:Long term the factors that are going to drive the market are these:

1. In and close to DC, there is a limited supply of land. The one thing you cannot produce more of in DC is land.

2. The opposite is true in the outer suburbs. You can always go out another few miles and add on another ring of new construction. There is a huge supply of land in the outer suburbs, and will be for a while.

What does this mean? DC prices may flatten, but they will not collapse and will keep rising at a steady rate.

Suburban prices, at some point, are going to crash. The demand will drop, the supply will stay stable...boom. Drop in prices. Over time they will recover, so you will be fine if you are in for the long haul, and nothing to worry about if you plan on buying your house and living in it for a while...but short-timers and speculators will at some point find themselves losing money.

Are you just...confused?

Limited land means every parcel is even more coveted and therefore more expensive to buy. That's how it works. Its with cities of endless sprawl that you see the reverse - buyers just hopping to the newest subdivision one highway over to get what they want. That's why Nashville and Houston have the problems they do. Endless building in all directions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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?

My point was even if your Israeli-based employer tells you that you can work from home forever, you would pretty much have to stay in Tel Aviv (if you wanted to remain in Israel). If your DC-based employer tells you that you can work from home forever, you have 50+ cities with 500k+ population you could move to, just within the US.

Okay. My question is - are these Israeli companies giving up value office/commercial real estate and allowing the majority of their employees to WFH and Zoom forever - even if they are all in Tel Aviv? Seeing as they are the only country which has implemented a successful vaccination campaign.

Its not just about what options the employees have for leaving (I mean they could just decide to relocate to France with their families), its also about what the companies see as the best option for revenue moving forward.

We should be seeing Israeli answers in March seeing as the broad majority of their population is vaccinated now.

More news from Israel

[Anonymous]

Anonymous wrote:

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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.

Did you notice that article is 8 months old? If they were at 2% in June 2020 - why would it be the same in February 2021?

I don't work with Goldman but I work with another bank and their reopening efforts ran smack into the second and third waves of the virus. They are still at the same levels they were back then. Traders are fully remote and everybody seems happy so it's a major ? what will happen next. The CRE market has put a lot of pressure on the banks because it's an existential threat for them. The most bullish move is Amazon buying up huge amounts of space in NYC for their NY-HQ2 because they think young college grads will want to move there no matter what. Facebook has leased some but the other tech companies are not biting.

Thanks - this is interesting. NYU (in New York) and UCLA (in L.A.) also had the largest application season in their history for the 2020-2021 year. So I don't think the young college grads think is wrong. A 15% and 28% increase in applicants says something.

http://www.nyu.edu/about/news-publications/news/2015/january/record-breaking-60000-students-apply-to-nyu-largest-increase-in-15-years.html

https://abc7.com/ucla-admissions-applications-diversity/10142247/

I think it is going to push the young people to want to be in urban areas even more. Staying home with mom and dad in middle of nowhere or middle suburbia gets real old at 18, 20, 22.

The young people from higher wealth households are going to be flocking to cities. I think Amazon is ahead of the game and knows this. It’s very competitive to recruit and retain top talent in tech, etc...

Uh. This is nothing new.

It isn’t, but the scale of this phenomenon isn’t constant and instead it has grown faster than many imagine. There’s a whole world of trust fund kids with boomer parents whose analogs in an earlier age would have decamped to NYC or maybe LA. Those places are too $$$ for them now and DC (with a big assist from ‘The West Wing’ and Obama) has been increasingly competitive on the ‘cosmopolitan cool’ circuit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Prices inside the city have been increasing since 2012. It started skyrocketing thanks to Covid because everyone wants a SFH.

I mean...this doesn't surprise me. I was on these boards in 2016, 2017, 2018 telling people to buy now. They all said 'I'll wait - it'll come down'.

When in fact D.C. prices have just been mirroring the rise of prices in S.F. and N.Y.C. in a much shorter amount of time. Its going to keep going up because everything in the city keeps getting more desirable.

- One of the top 10 most walkable cities in the country
- Grocery stores in every corner and more coming
- Best healthcare and hospital care available per capita basis
- Schools improving in every quadrant but already excellent in UpperNW, SE near Hill, and NW
- Job market is excellent
- Tourism market and therefore rental market is excellent
- City plans which have increased public transportation and bike paths across the metro area
- More ultra-wealthy moving into the city (Bezos should have been clue)
- City amenities include free pre-school for residents and paid leave for parents
- Beautiful mix of architecture, urban density, and modern capabilities

All this. The city is also retaining families who once would have flocked to the burbs for the schools. This is especially true of young families who like the urban walkable amenities and don’t need to move to upper NW or burbs for the schools with improving neighborhood schools and charters, etc...

This trend is big on why inventory is so low. Not to mention the baby boomers selling their 4K sq feet suburbia home and moving into the city. Not all of them want condos. Some want SFH. Capitol Hill has been a hot area for boomers to buy for years now and I wouldn’t be surprised if they branched out to Shaw, Navy Yard, Wharf, etc...

I don't want to damage your narrative, but inventory is lowest in the suburbs. In fact, the area with the lowest months' supply is king suburb of them all, Loudoun County. DC is doing just fine, but please don't overstate the story.

Who is overstating the story? Do YOU know what is happening in DC personally?

Families are not moving out of DC like in the past. They are staying. Schools are getting better. There are good charters.

Loudoun is not relevant to OP’s post. She posted places in the city that she is looking so it’s obvious what is important to her and you won’t be finding that way out in Loudoun.

[Anonymous]

Here you go OP - https://www.redfin.com/DC/Washington/2630-Garfield-St-NW-20008/home/9987357

[Anonymous]

Or this - https://www.redfin.com/DC/Washington/4630-Charleston-Ter-NW-20007/home/9940073

It's been sitting for a while.

[Anonymous]

Anonymous wrote:Or this - https://www.redfin.com/DC/Washington/4630-Charleston-Ter-NW-20007/home/9940073

It's been sitting for a while.

Holy hell is that thing ugly. Contemporaries are not my cup of tea, but I can at least understand the aesthetic. That one is just ugly.

[Anonymous]

Here is this week's RE report - again not for just DMV but good snapshot:

https://twitter.com/mikesimonsen/status/1361419367842336770

[Anonymous]

Anonymous wrote:Here is this week's RE report - again not for just DMV but good snapshot:

https://twitter.com/mikesimonsen/status/1361419367842336770

Welp.