Reply to Remember all the dorks spamming last year real estate was going to crash?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Here's the issue that has been cited again and again (and ignored again and again).  The Washington DC metropolitan region continues to grow in population with a significant number of higher income jobs coming in every year.  The population growth signifcantly outpaces the housing growth and in the closer in areas, which are more desireable, there is very little room for additional housing growth.  In closer in regions, the most housing "growth" is really just rebuilding.  Developers buy older smaller properties and build bigger more expensive housing.

But the issue is that we have more population and many of them with higher end incomes, who are immigrating into our region and they all want what everyone wants, they want convenience to the urban areas and the benefits and perks of upper income.  This is classic supply and demand.  When supply is fixed or growing at a much slower pace than demand, prices go up, because you have more people willing to spend more to get what they want over those who aren't willing or able to pay more.

With the federal government here, there is no way that the Washington DC metropolitan region will experience a decrease in population growth and so demand will continue to grow.  Unlike other metropolitan regions (like many rust belt cities) the federal government is not going anywhere and the various occupations that support it from federal contractors, to lawyers, to lobbyists, will keep the housing market rising.  The increases vary, slower in some years, faster in others, but the prices will continue to rise.  The housing crash and price corrections from 2008 were a result of financial deception by the lending industry (zero percent mortgages, sub prime mortgages, high ARM rates, etc) and was a financial correction more than a housing correction.[/quote]

Saying we're not situated in exactly the same way as 2008 makes no sense. We just bought a home last year, so I'm not rooting for a plummet in the housing market. But any sort of economic downturn would likely result in a downturn in the real estate market. There are countless scenarios that could trigger this.[/quote]

The difference is that the real estate collapse contributed to the economic downturn.  Which is different than an economic downtown impacting home prices.

Leading up to 2008, you had janitors getting million dollar loans.  That's not happening today.  Heck, I remember when I first bought in 2007, the lender literally told me 'okay, we approved you at the 350 amount you requested.  But let me know if you want to get higher.  We can get you up to any number you want"[/quote]

Posters saying we can't have a RE downturn because we're not making the same exact type of lending mistake as in 2008 are delusional. Bad lending practices was only one of the many possible drivers for a RE downturn.[/quote]

The subprime mortgage collapse was the major reason for the 2008 housing crash and a big part behind the overall 2008 crash. We don't have a subprime mortgage crisis. Enormous difference. Mortgage lending standards are much more stringent. [/quote]

Good lord no one is saying the subprime mortgage collapse wasn't the reason for the 2008 housing crash. Some of us are just saying that there are other reasons that we could experience a decrease in housing values.[/quote]

Good lord don't be so nitpicky.

As it is, seems hard to see what is on the horizon to see housing prices fall sharply. The factors behind the big crash in 2008 don't exist today and those were very specific factors leading to a massive crash. But even in 2008 DC didn't suffer badly, only in exurban areas did you see a clear drop in prices. In prior recessions housing prices didn't fall sharply although you did have localized housing declines like Southern California in the early 1990s and Texas in the 1980s.

The housing supply is so tight that even a rise in unemployment is barely going to affect housing prices. We have a two tiered economy and housing belongs to the winners and who cares what happens to the poor. We also have a young population compared to the other developed countries with plenty of younger people aging into homeowner demographics.[/quote]

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