Reply to Spring Market=More Houses?

Forum Index » Real Estate

Reply to "Spring Market=More Houses?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Completely different viewpoint. 
I think people are less reliant on MLS/Redfin/Trulia/Zillow.  Instead what you're seeing is market transactions that never actually hit the market.  Ie. Homeowner 1 really loves their neighborhood but just wants a larger home.  They talk to neighbors.  They wait.  Homeowner 2 is getting divorced.  Homeowner 1 makes offer.  House never hits market and is sold.  Only shows up as "sold" on any of the typical websites.
OR 
As developers do... Potential homeowner send personal letters to homes they love in a given neighborhood.  They wait.  Someone responds 6 months later. They buy.  Again, under radar. 
[/quote]

No, that's not it, though I'm sure there are a few examples to the contrary.

It's simply economics. Demand is greater than supply. This causes prices to rise.

There are several reasons why demand is outstripping supply in DC, and they've mostly been mentioned already: demand is high because there is serious job and income growth in this region, especially when viewed relative to other regions; supply is low because traffic makes distance extremely relevant and there are immutable constraints on the amount of houses close-in; supply is low because the rate lock-in effect makes the prospect of moving to another home less attractive; supply is low because retirement accounts took a huge hit and caused a delay in retirement (I'm not sure if this is true; it's an empirical question).

So, we have demand>supply. Looking at the reasons stated above, which of these do you expect to change going-forward? The cessation of sustained job and income growth in the region? No. Traffic suffocating homes with longer commutes? Doubtful, though self-driving cars may change this landscape (of course, not within a decade). Interest rates reversing so that it's more attractive to move? No chance, period. Retirement accounts recovering? Yeah, that should happen, but the effect won't be large. (Again, I question whether this is actually relevant in DC at all; I honestly don't have a clue.)

All-in-all, I foresee little reason to think we won't have a continued disequilibrium in which demand>supply for years to come. In an odd way, I'm not more bullish on DC housing than I was before writing those lines. I'd enjoy hearing from others on this. [/quote]

People keep talking about the job market here.  What jobs are growing?

1) Attorneys: DCUM is full of stories for firms folding, and warning about how there has been a shift and discouraging future lawyers (as well as oversupply from the many many law schools)

2) Lobbying: Congress is basically deadlocked and lobbying has been down since recession. http://www.marketplace.org/topics/economy/new-business-lobbying

3) Tech: DOD budget is down, what 1/2 trillion for next 10 years? So defense contractor cuts. Living social is a flame out. Maybe some big data/nimble tech analytics are flourishing, but only b/c they are cheaper and leaner than the beltway bandits and Big-5 Defense contractors from whom they are taking business.

Where is this job growth?? I do concede we don't see massive layoffs and a fairly stable job market, so hence we don't see people selling b/c they have to nor waves of foreclosure.

This is a total supply-side induced bubble.  Short supply is a large part b/c people were holding out for prices to go back to bubble levels (even folks who bought decades have this delusional thought that they lost money b/c it was at one point worth $XXXX, so are waiting for prices to return that point and beyond).  Prices are just at bubble levels now, but I think the run-up was so fast, folks are getting greedy and sitting on their house, because "real estate never goes down".

This locked up market will persist for a long time, and end in tears I'm afraid.[/quote]

1, 2, 3 are yesterday's news and have been resolved after the government shutdown which made both sides look bad.[/quote]

1) So attorney's are hiring again?  2) Lobbying -- this article is from yesterday... 3) DOD is still cutting it's budget (sequester has been stopped, but they already had 500 billion in cuts lined up).

But no question, this is top of the heap in job markets: in the land of the blind, the one-eyed man is king.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics