Reply to Are we in a housing bubble?

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Reply to "Are we in a housing bubble?"

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[quote=Anonymous][quote=Anonymous][quote]

Anonymous wrote:

DC is becoming less of an anomaly as far as the economy goes. Especially this year.

What do you mean? DC is a bustling capital city, and usually has rising housing prices [b]in anything but a recession[/b] (local, national, or international). It is not an anomaly. Every capital (or major) city is like this.[/quote]

We are going into a recession. So, yes, we are in a housing bubble right now. 
[/quote]

No, we are not. There is no such thing as a bubble in an around a capital city. In a recession like the one we had in 2008, prices stagnate in some places, decrease in iffy neighborhoods and those that are further out, and continue to rise, but not as quickly, is desirable close-in neighborhoods (with the good public schools, because some young families who might have put their kids in private decide to do public instead). Before and after a recession, real estate prices rise everywhere. There are many more years of non-recession than there are years of recession, so when you step back and look at a timeline over decades, you only see slight dips within a continuously rising price line. Do not make the mistake of characterizing the periods before each dip as a "bubble", because that term implies a one-time short-lived increase unsupported by fundamentals. It's never that! Real estate prices increase naturally over time.

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