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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Without trying to read the tea leaves on proposed budget cuts, my take on the DC area is that [b]housing costs are way beyond historical norms, relative to HHI.[/b]  This has been made possible by abnormally low interest rates.  When rates rise (and they will) to historical norms (the average thirty year rate is 8.5% or higher) housing will be hit and probably hard in this area.

Households can and have borrowed four and five years' income at three percent interest for housing.  That will be impossible at 8.5% or higher.  Ergo, prices will come down.  The math determines it, not some agent's opinion.  [/quote]

DING, DING, DING!  Virtually everyone I know sitting in a 1.8 million house had one or both of the following:

1) "Help from family" - which is to say, money that was likely not earned in the region
2)  The enjoyment of some ridiculous equity explosion, that they kept rolling forward to properties - which is to say, they could never pay to house themselves and live a good life in the region, while saving for a $700,000 down payment.  They "saved" for their down payment by living in a house that just magically increased in value.

DC salaries, when you look at other ultra expensive cities are very low.  We don't have loads of hedge fund folks or techies who are getting multmillion dollar bonuses, and we consider "rich" people to be big law attorneys. Further, government salaries are capped very low at $200k.

Also, Millennials have absolutely no money.  Yeah, sure, a few of them do.  I am a Millennial and it is very hard to break into the housing market, and no Millennial is going to enjoy the easy equity Gen X and Boomers took for granted.  Millennials also aren't willing to buy properties they don't like.  Millennials spend all their money on chai lattes and Chop't salads, and they want the best of everything with minimal inconvenience.  In 10 years, do you think they're going to line up to buy your crappy new build which will by then be dated and probably falling apart?

I love that you started this thread, OP.  I am a home owner (hot area, close in burb, straight 10s on the schools), and I'll still be delighted when this ridiculous market right-sizes.[/quote]

Umm excuse me but gen X got screwed by the housing crash, we didn't get "easy equity".[/quote]

Exactly what I was going to say - Gen X always gets screwed - always.[/quote]

Please explain.  You've had it worse than boomers, but boomers had it extremely easy.  Housing prices were far cheaper when you were buying your homes the late 90s/early 2000s.

Just as one example, your college was still relatively cheap.  I'm an older millennial, and even I can admit that the older millennials have it much better than the youngest millennials.  The cost of college has skyrocketed since I graduated in 2008.

[/quote]

Maybe you're right for early gen x'ers but those of us that were late gen x bought at the top of the market right before the crash.[/quote]

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