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[quote=Anonymous][quote=Anonymous][quote=Anonymous]$600k houses are dumps in DC. House prices are out of line with rents. I rent a house in the JKLM for $2500/month. Buying a house would cost so much more. I also can't build equity in a falling market. House price are still unrealistic.[/quote]

A rent of $2500 per month on a $600k house (the mortgage on which would be only about $480,000) doesn't sound out-of-line to me at all.

What the hell is the JKLM and why would you assume anyone would recognize that acronym?[/quote]

When factoring taxes, a $480k mortgage is $3k/month. This doesn't take into account the regular maintenance plus the inevitable expenses accrued from buying some dump. Love your realtor math; I wish it reflected reality. 20% down payment is fairly unusual around here unless there's family money or you were fortunate enough to move into the area before the bubble went full force. Most new buyers I've spoken to go for the FHA loan (3%), while the established folks are relying on some sucker to buy their old place. Besides, I double-dog-dare you to find a single family home in NW DC that can fit a family of four for $600k. Most halfway reasonable houses are in the mid $700k price range (that's a minimum expense of $3.5k/month, but most likely $4k+).

There is a fundamental disconnect between incomes and risk, and that's reflected in the inability of banks to dump their crappy mortgages on anyone other than Fannie and Freddie, which is basically a clearinghouse for artificial money supply generated by the Fed. Barring some drastic change in this risk issue, the secondary debt market for mortgages will continue to be defunct, with a likely convergence on house prices to somewhere south of where they are right now.
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