Curious: where do the $$ come from??
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Anonymous
| Looking at DC metro real estate and can't figure it out. How does an economy that is primarily supported by the federal government (losing jobs every year, no pay raises, etc.) manage to sustain housing that is so outrageously expensive. Putting aside that it's mostly ugly and poorly constructed, I genuinely don't understand how the area keeps it all afloat. Understand that there are some lobbyists/lawyers that are financed by the private sector and some lavish foreign governments, but are there really that many? Enough to sustain oodles of houses at $1.5 and up? And my inexpert, anecdotal searching shows that even $1.5 has become modest in many, many metro areas. Even if the average joint fed household brings in a 180-200K pre-tax and has saved like crazy to make the downpayment, how can they keep up with that huge a mortgage? And if it's not fed households, what industry are the people who buy these homes in? |
Anonymous
| The federal government is large and it pays relatively well- so it supports a large middle class. There are lobbying firms and law firms that get money from all over the country. There are many world headquarters for large companies that support another large segment of well paid paper pusher VPs and above. There are many dual income professionals working and that adds to the buying power too. It is a highly educated population and education tends to increase income ability. People tend to marry late and have children later- so they have years to save before the expensive child years. |
Anonymous
| Don't forget the consulting firms doing lots of work in defense, national security, and technology. Have you heard of 9/11 and the resulting wars and national security projects? |
Anonymous
| OP, is your head in the sand? Have you read a paper recently and seen the industries that support this area (consulting, law, lobbying, some tech)? Those industries are much larger in this area than you think. Also, many fed workers live in the far out suburbs (take train to work). Most of them don't live in the expensive houses. |
Anonymous
| Also, remember that this area has a high percentage of two-income households. Women have great work opportunities here at all levels of management and so have a tendency to continue working even after having kids. So it's very easy to have a household income of $200K+ in this area. With that income, you can afford a pretty expensive house. And that's at the low range of what many make here. |
Anonymous
| I have two 24 yo olds in my org who are married. They each make about $90k. No kids. |
Anonymous
Actually in DC Fed households tend to be dual GS15s making more like 310,000 a year combined.... |
Anonymous
But to afford a 1.2M house you need $400k a year and when it is reached by dual earner you really should discount 40k for daycare camps etc. Honestly most people buying expensive homes bought before the bubble; they sold to folks making not enough so took risky loans from bank, banks failed and were bailed out by US govt. So you could say a lot of those homes were paid by taxpayers via the bank bailouts. People just starting out at, how much can you affords |
Anonymous
| In my case, DH and I both came to the relationship with SFHs. I had 3 yrs left on my mortgage and DH had paid his off. We sold both houses and bought a house for us. |
VArealtor
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Any number of places. I've seen:
- Partners of law farms - Investors - Business owners - Bank executives - Lobbyists.. lots of lobbyists - Some tech - Inheritance or parental assistance - Believe it or not but a handful of non-profit execs who earn $600k+ a year - A few high ranking Feds that saved up for many years and married later in life (you'd be surprised how much you can save in that situation). - People who bought & sold their previous homes at optimal times and that, coupled with saves (or sometimes not at all) purchased a dream home. The possibilities are endless. |
Anonymous
You can afford a 1.2 million home on a 200k salary without any debt if you stretch it. If you are 275K it is within the normal DTI http://www.zillow.com/mortgage-calculator/house-affordability/ |
Anonymous
| Or if you make 310K and you have family money to help with the downpayment... |
Anonymous
| Yes, many of us have pretty good jobs...but lots of us also bought early in the 2000's in great close-in neighborhoods and "moved up" with a bundle of cash in mid-2000's. |
Anonymous
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It is not government workers in the expensive houses, unless they bought years ago. In places $1 mn plus in Chevy Chase etc. the new people buying seem to be almost all lawyers.
Most 2-income government workers are pulling in closer to 200 than 300 K. Enough for a place in Silver Spring but not NW DC. |
Anonymous
| It's called FAMILY MONEY, OP, and most people in NWDC have it. Many people in the best NWDC neighborhoods, in the super nice houses that start at $1.5 (and that's really the very bottom), have parents who have tons of money and grandparents who had tons of money. Lots of trust funds and down payments as gifts, and money begets money so most have at least one adult making a high salary in banking, law, commercial real estate, tech, etc... All very normal in these neighborhoods. Plus, on top of a expensive home, most of us she'll out 30-40,000 per child annually for private school and lots of families around here have 3, 4, and even 5 kids! It's enough to make ones head spin off but it is just how it is. |