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Real Estate
Reply to "Housing prices have gone insane"
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[quote=Anonymous]Many people miss the forest for the trees in this discussion. DC area prices are capped by Fed salaries + mortgage rates + prior equity. There is too much land, and not enough private sector jobs to dramatically move the market independently. That's why you see such a fat middle distribution in prices with a very shallow long-tail (i.e. lots of houses up to $2m then sales drop off a cliff), compared to other cities. Rates can drop a bit, but new buyers tend to have less prior equity, so maybe that will balance out. People who think prices will appreciate 5%+/year don't understand that in cities where that happened the mass market of professional salaries were increasing by *double* that amount every year (SF, LA, NY). This dynamic is also what tends to help DC in recessions, because while there is a lower ceiling, there is also a higher floor with more stability.[/quote]
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