Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Without trying to read the tea leaves on proposed budget cuts, my take on the DC area is that housing costs are way beyond historical norms, relative to HHI. 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.

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.

I'm adding 3) foreign $. I'm in an area with great schools and there are lots of wealthy foreigners buying houses in the $1.5-$1.8M with cash.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

PP is cutting off their nose to spite their face. You need a steady supply of monied buyers to keep prices up. By trumping your own imagined virtue and youngsters seeming vice, you're missing the fact that the pain of millennials could mean your dues don't pay off financially, because they can't afford the prices needed to make you whole when you sell.

It's very hard to let go of feeling like you earned something because of your own hard work and diligence than luck. The reality is that it's a combination of both. Millenials will NOT enjoy the same type of growth because of the fundamentals. Our population only increases because of immigration, what happens if that is reduced significantly?

Anonymous wrote:

Anonymous wrote:Without trying to read the tea leaves on proposed budget cuts, my take on the DC area is that housing costs are way beyond historical norms, relative to HHI. 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.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

PP is cutting off their nose to spite their face. You need a steady supply of monied buyers to keep prices up. By trumping your own imagined virtue and youngsters seeming vice, you're missing the fact that the pain of millennials could mean your dues don't pay off financially, because they can't afford the prices needed to make you whole when you sell.

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

But does a pile of rotting wood and construction materials warrant exorbitant price increases?

The land should appreciate, but the structure should depreciate. The current model has both appreciating wildly.

This all depends on movement of people. It's supply and demand economics which anyone claiming to be a bear should understand. If the population continues to increase in an area, won't demand for housing continue to increase?

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

But does a pile of rotting wood and construction materials warrant exorbitant price increases?

The land should appreciate, but the structure should depreciate. The current model has both appreciating wildly.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

But does a pile of rotting wood and construction materials warrant exorbitant price increases?

The land should appreciate, but the structure should depreciate. The current model has both appreciating wildly.

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.