Reply to There is no housing bubble in the DC area so get over it

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[quote=Anonymous]Personally, I think the last bubble is part of the reason we are experiencing this current bubble.

Let me clarify, the reason for the run up in prices over the last year is limited inventory.  The reason for the limited inventory is partly due to the fact that there are *still* people underwater who aren't willing to sell for a loss, even though they would sell now if they could.

Cash investors are buying up the foreclosures, which makes it difficult for buyers with financing to buy them.  And then the investors flip the house for a huge markup (after hobbling together some renovations).

I do believe that if interest rates weren't kept artificially low, then we wouldn't be seeing as much activity as we're seeing.  In fact, I would say that the reason that the last bubble didn't result in a true bottoming out is because rates were kept so low.

I don't know where this is all going to go, but it is indeed scary.  Every indication is that salaries in the region are either going to remain stagnant or actually decrease.  I can't imagine that the run-up in prices for houses is actually sustainable.  It's sort of a game of musical chairs.

But if you can afford your monthly payment, have a fixed rate loan, don't expect to have to move any time soon, don't expect pay cuts or significant furloughs, and have a little wiggle room (disposable income), then I wouldn't be worried.

But I can't imagine anyone really believing this is all sustainable and that the increases are just going to keep going up the way they are.

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