https://www.cnbc.com/2021/04/16/billionaire-jeff-greene-says-this-housing-boom-is-in-a-bubble-too.html

https://www.jpmorgan.com/insights/research/us-housing-risk

https://1851franchise.com/top-franchise-brokers-amanda-berry-frannet-2716163#stories

https://www.thinkadvisor.com/2021/07/12/harry-dent-stock-market-crash-likely-within-3-months/

for every article saying it "isn't a bubble" there is one saying that it is. Bubbles cannot be identified until they burst or deflate.

Anonymous wrote:The only people who think there will not be a steep market correction are real estate professionals and people who just bought houses.

The market slows at the height of the summer every year. I firmly believe a market correction is in the near future regardless.

Why? Just because? You have a "gut" feeling?

Under normal situations, the real estate market is a simple supply/demand model. The more people that want to buy in a location, whether it is a booming urban center, it has a good school, it is close to a popular attraction, etc, the more prices will go up. That is offset by supply. If a large influx of homes come into the market, like a new development or condo community comes on-line and becomes available, then the costs to down. More supply, prices down. More demand, prices up. And vice versa. The things that tend to change this are financial and economic pressures. The last big correction from 2008-2010, occurred because of the subprime mortgage crisis. That was an artificially created bubble where the mortgage industry spent the early 2000's enticing many more buyers into the market with "too good to be true" mortgage products and when those products adjusted, the buyers who bought more than they could afford lost their shirts, many homes foreclosed or went to short sale and the prices corrected.

In the DC area, population is still growing steadily at 1+% per year and more corporations and businesses are increasing their footprint in the metropolitan area, which will only add to the steady growth. Barring another financial crisis, the problem is one of supply and demand. The population is growing faster than the available housing increases. So, demand continues to exceed supply. As long as that happens, without an external factor, there will not be a market correction.

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Anonymous wrote:Everyone in tech (real tech) that I know wants to work in NYC, not DC.

Oddly, everyone in real tech I know live in CA and don’t want to live in DC but love the idea of sending their kids to TJ so they are moving to Fairfax.

Didn't TJ eliminate their merit/test based admissions last year so it's pretty much anybody with a 3.5+ (>50% of all students in the district) is lotteried in now? Won't that kill the special sauce within a few years?

Yes, it would. Bad decision on FFX county part.

This is so sad. Despite not having any kids, TJ was something I was proud of as someone living in the county. Now, who cares?

Public schools are a stain on your resume. They suck.

Who puts high school on your resume??

The only people who think there will not be a steep market correction are real estate professionals and people who just bought houses.

The market slows at the height of the summer every year. I firmly believe a market correction is in the near future regardless.

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Anonymous wrote:Mortgage applications sink to their lowest level since before the pandemic hit

https://www.cnbc.com/2021/07/07/mortgage-applications-sink-to-lowest-level-since-before-pandemic.html

Falling mortgage rates didn’t spur demand.

RedFin data shows major slowdown of houses sold in the last month or so while inventory increased.

Which is good, all the pandemic did was move up peoples timelines to move from the city to the burbs. They did it all at once hence the scramble. That demand has been satiated to a large part. You aren’t seeing investors buying multiple homes or other nonsense like in 2005.

Redfin data also indicates that suburban buyers are very stretched. In Bethesda and Arlington zip codes I checked, down payments are only averaging about 10%. In DC it’s a different story. All of the high demand and competitive neighborhoods have at minimum 20% average down payment and many, like CCDC are 30%+. Suburbs look to be maxed out.

Can you please tell me where to find this data on redfin?

Just scroll to the bottom of any listing. It is right below the transit/walkscores and right above the "competitive" score.

Just rechecking and I may need to revise a bit. Looks like "urbanized" suburbs are not in good shape. The money is fleeing to lower density/more green.

Great Falls (22066): 60%
McLean/Langley (22101): 55%
Cabin John/Carderock/Burning Tree (20854): 38%
Potomac (20854): 30%
Tysons/North McLean (22102): 29%
Capitol Hill: 28%
CCDC: 27%
AU Park: 20%
Spring Valley: 20%
South Arlington (22201): 13%
Reston (22182): 12%
CCMD/Somerset/Bethesda (20814/20815): 10%

Just to add that Hyattsville is reported on Redfin to average 0.0% downpayment. Which seems impossible, but maybe every buyer is going with VA/USDA which maybe makes sense. In any case, the patterns look like a replay/continuation of patterns from the housing bubble crash/global financial crisis. Western Fairfax keeps getting richer. DC is doing well and MD is suffering as the wealth is getting more and more concentrated against the Potomac River and no where else.

Something is very off with that data. I cannot find a source but for my area which is incredibly wealthy and highly sought after it says average downpayment is 3.4% which does not at all pass the sniff test. I did a little digging and wasn't able to figure out the source so anyone let me know if you find it out. Anyways, we put 10% down not because we were stretched (we had 20%+) but because interest rates were sooo low that we'd rather invest the rest in other vehicles than our home.

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Anonymous wrote:Everyone in tech (real tech) that I know wants to work in NYC, not DC.

Oddly, everyone in real tech I know live in CA and don’t want to live in DC but love the idea of sending their kids to TJ so they are moving to Fairfax.

Didn't TJ eliminate their merit/test based admissions last year so it's pretty much anybody with a 3.5+ (>50% of all students in the district) is lotteried in now? Won't that kill the special sauce within a few years?

Yes, it would. Bad decision on FFX county part.

This is so sad. Despite not having any kids, TJ was something I was proud of as someone living in the county. Now, who cares?

Public schools are a stain on your resume. They suck.

TJ was a fraud certain parents gamed the system to get in and now it is more fair. If anything better for everyone.

My old town I noticed last few weeks prices are still very strong. But houses in a flood zone with mandatory flood insurance, higher property taxes, a big fixer upper or on main road or taking longer to sell.

I hardly call that a bubble burst but signs of a slightly better functioning market.

Folks should be be doing bidding wars on overtaxed houses on a highway that need work

Huh, those down payment numbers are interesting. They are only for 30 days prior, so grain of salt, but still interesting. Adding more Maryland zip codes to round out the conversation:

Downtown Silver Spring (20910) 14.6%
Wheaton (20902) 11.9%
Takoma Park (20912) 8.8%
South Laurel/Bowie (20708) 10%
Mount Rainier (20712) 0%

One factor I think you need to consider is that the neighborhoods I list here are MUCH more likely to attract starter home buyers, who are always going to have less money for a down payment. I'm a little surprised to see this 0% for Mount Rainier and Hyattsvilee, but none of the other numbers surprise me at all based on the sort of buyers who tend to look in these neighborhoods (lots of young couples just starting out, some people with young kids fleeing the city who can't afford to go West).

The point is, I don't think this reflects anything other than the fact that these are more affordable areas with smaller homes and less wealthy buyers. It doesn't mean money is "moving" to the Potomac region -- that's where the money has been forever. It also reflects the fact that buyers of 500k starter houses are more likely to go with a smaller down payment (which is generally fine, a 15 year fixed rate mortgage on a 500k house, even with limited down payment, will still be a great investment in this area because of the economic stability and growth), than people buying a 1.8m house in Bethesda or CCDC. These are extremely different purchasers.

Long story short, I think prices in the DMV will flatten a bit because they've grown so exponentially in the last two years (I think we may already be seeing that this buying season) but I don't think it's a bubble or that it's popping. The region continues to grow its base of well-paying jobs and there is nothing about the economics of DC to indicate that the income bubble is popping, and that's what is driving housing. So long as government, tech, and the businesses that serve both (law firms, consulting firms, accountants, etc.) is strong in this area, there will be demand for educated professionals and the money to compensate them. I think it's unreasonable to expect your housing value to double in 5 years, but I also think housing in this area, even in the less expensive and desirable areas, will continue to be a good long term investment.

Anonymous wrote:

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Anonymous wrote:Mortgage applications sink to their lowest level since before the pandemic hit

https://www.cnbc.com/2021/07/07/mortgage-applications-sink-to-lowest-level-since-before-pandemic.html

Falling mortgage rates didn’t spur demand.

RedFin data shows major slowdown of houses sold in the last month or so while inventory increased.

Which is good, all the pandemic did was move up peoples timelines to move from the city to the burbs. They did it all at once hence the scramble. That demand has been satiated to a large part. You aren’t seeing investors buying multiple homes or other nonsense like in 2005.

Redfin data also indicates that suburban buyers are very stretched. In Bethesda and Arlington zip codes I checked, down payments are only averaging about 10%. In DC it’s a different story. All of the high demand and competitive neighborhoods have at minimum 20% average down payment and many, like CCDC are 30%+. Suburbs look to be maxed out.

Can you please tell me where to find this data on redfin?

Just scroll to the bottom of any listing. It is right below the transit/walkscores and right above the "competitive" score.

Just rechecking and I may need to revise a bit. Looks like "urbanized" suburbs are not in good shape. The money is fleeing to lower density/more green.

Great Falls (22066): 60%
McLean/Langley (22101): 55%
Cabin John/Carderock/Burning Tree (20854): 38%
Potomac (20854): 30%
Tysons/North McLean (22102): 29%
Capitol Hill: 28%
CCDC: 27%
AU Park: 20%
Spring Valley: 20%
South Arlington (22201): 13%
Reston (22182): 12%
CCMD/Somerset/Bethesda (20814/20815): 10%

Just to add that Hyattsville is reported on Redfin to average 0.0% downpayment. Which seems impossible, but maybe every buyer is going with VA/USDA which maybe makes sense. In any case, the patterns look like a replay/continuation of patterns from the housing bubble crash/global financial crisis. Western Fairfax keeps getting richer. DC is doing well and MD is suffering as the wealth is getting more and more concentrated against the Potomac River and no where else.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Mortgage applications sink to their lowest level since before the pandemic hit

https://www.cnbc.com/2021/07/07/mortgage-applications-sink-to-lowest-level-since-before-pandemic.html

Falling mortgage rates didn’t spur demand.

RedFin data shows major slowdown of houses sold in the last month or so while inventory increased.

Which is good, all the pandemic did was move up peoples timelines to move from the city to the burbs. They did it all at once hence the scramble. That demand has been satiated to a large part. You aren’t seeing investors buying multiple homes or other nonsense like in 2005.

Redfin data also indicates that suburban buyers are very stretched. In Bethesda and Arlington zip codes I checked, down payments are only averaging about 10%. In DC it’s a different story. All of the high demand and competitive neighborhoods have at minimum 20% average down payment and many, like CCDC are 30%+. Suburbs look to be maxed out.

Can you please tell me where to find this data on redfin?

Just scroll to the bottom of any listing. It is right below the transit/walkscores and right above the "competitive" score.

Just rechecking and I may need to revise a bit. Looks like "urbanized" suburbs are not in good shape. The money is fleeing to lower density/more green.

Great Falls (22066): 60%
McLean/Langley (22101): 55%
Cabin John/Carderock/Burning Tree (20854): 38%
Potomac (20854): 30%
Tysons/North McLean (22102): 29%
Capitol Hill: 28%
CCDC: 27%
AU Park: 20%
Spring Valley: 20%
South Arlington (22201): 13%
Reston (22182): 12%
CCMD/Somerset/Bethesda (20814/20815): 10%

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Mortgage applications sink to their lowest level since before the pandemic hit

https://www.cnbc.com/2021/07/07/mortgage-applications-sink-to-lowest-level-since-before-pandemic.html

Falling mortgage rates didn’t spur demand.

RedFin data shows major slowdown of houses sold in the last month or so while inventory increased.

Which is good, all the pandemic did was move up peoples timelines to move from the city to the burbs. They did it all at once hence the scramble. That demand has been satiated to a large part. You aren’t seeing investors buying multiple homes or other nonsense like in 2005.

Redfin data also indicates that suburban buyers are very stretched. In Bethesda and Arlington zip codes I checked, down payments are only averaging about 10%. In DC it’s a different story. All of the high demand and competitive neighborhoods have at minimum 20% average down payment and many, like CCDC are 30%+. Suburbs look to be maxed out.

Can you please tell me where to find this data on redfin?

Just scroll to the bottom of any listing. It is right below the transit/walkscores and right above the "competitive" score.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Mortgage applications sink to their lowest level since before the pandemic hit

https://www.cnbc.com/2021/07/07/mortgage-applications-sink-to-lowest-level-since-before-pandemic.html

Falling mortgage rates didn’t spur demand.

RedFin data shows major slowdown of houses sold in the last month or so while inventory increased.

Which is good, all the pandemic did was move up peoples timelines to move from the city to the burbs. They did it all at once hence the scramble. That demand has been satiated to a large part. You aren’t seeing investors buying multiple homes or other nonsense like in 2005.

Redfin data also indicates that suburban buyers are very stretched. In Bethesda and Arlington zip codes I checked, down payments are only averaging about 10%. In DC it’s a different story. All of the high demand and competitive neighborhoods have at minimum 20% average down payment and many, like CCDC are 30%+. Suburbs look to be maxed out.

I find this confusing. Weren’t there covid changes to jumbo loans that required 20% down? Are all these people finding cheap places or what’s the deal?

There is no such requirement.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Mortgage applications sink to their lowest level since before the pandemic hit

https://www.cnbc.com/2021/07/07/mortgage-applications-sink-to-lowest-level-since-before-pandemic.html

Falling mortgage rates didn’t spur demand.

RedFin data shows major slowdown of houses sold in the last month or so while inventory increased.

Which is good, all the pandemic did was move up peoples timelines to move from the city to the burbs. They did it all at once hence the scramble. That demand has been satiated to a large part. You aren’t seeing investors buying multiple homes or other nonsense like in 2005.

Redfin data also indicates that suburban buyers are very stretched. In Bethesda and Arlington zip codes I checked, down payments are only averaging about 10%. In DC it’s a different story. All of the high demand and competitive neighborhoods have at minimum 20% average down payment and many, like CCDC are 30%+. Suburbs look to be maxed out.

I find this confusing. Weren’t there covid changes to jumbo loans that required 20% down? Are all these people finding cheap places or what’s the deal?

Anonymous wrote:

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Anonymous wrote:Everyone in tech (real tech) that I know wants to work in NYC, not DC.

Oddly, everyone in real tech I know live in CA and don’t want to live in DC but love the idea of sending their kids to TJ so they are moving to Fairfax.

Everyone in real tech I know lives in California or WA. When they talk about moving, they’re not talking about moving to NYC or DC. They’re talking about moving to the boonies, either Midwest to be near family, or Colorado or Montana or something “rustic” like that.

The funny part about city folk moving to the "rustic" areas is that I'm from the Appalachian Mountains in a rural area. It sucked. I hated it. Low population density. Drive everywhere. Nothing to do other than a few state/national parks that you can really only go to so many times. No shopping. No fast Internet (some areas in the mountains are still on dial up). No cable TV (Dish TV/Directv only some also use this for Internet but uploads with the second dish sucks). 45 minutes to the closest store (Walmart). An hour to the closest hospital. No shopping. Very few good places to eat out (or any really so you take what you can get). Going an hour+ to the movie theater once or twice a year is a major event because it's so inconvenient. No one I grew up with wants to live there any more. Oh and well water that is full of iron and stains your cloths red. Just remembered that "fun one" right before hitting submit.

They're not moving to your rural areas but places like Bend, Oregon.

Telluride, Jackson, Carmel....

Except those places are even more expensive than where they came from...

There are clearly nice places that are cheaper than Jackson & Telluride (which is why places like Coeur d’Alene, Ketchum and Bozeman are booming), but a lot of those people aren’t necessarily looking for cheaper, just a better deal. They’re trading a $2 million 1,200 sq ft shack in for a $2 million 3,000 sq ft house with a view. If they want cheaper, they’re going for Bozeman or the like. There are affluent small towns (of varying degrees) all over the country. There are still very few moving to real “rural” areas with depressed economies.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Everyone in tech (real tech) that I know wants to work in NYC, not DC.

Oddly, everyone in real tech I know live in CA and don’t want to live in DC but love the idea of sending their kids to TJ so they are moving to Fairfax.

Everyone in real tech I know lives in California or WA. When they talk about moving, they’re not talking about moving to NYC or DC. They’re talking about moving to the boonies, either Midwest to be near family, or Colorado or Montana or something “rustic” like that.

The funny part about city folk moving to the "rustic" areas is that I'm from the Appalachian Mountains in a rural area. It sucked. I hated it. Low population density. Drive everywhere. Nothing to do other than a few state/national parks that you can really only go to so many times. No shopping. No fast Internet (some areas in the mountains are still on dial up). No cable TV (Dish TV/Directv only some also use this for Internet but uploads with the second dish sucks). 45 minutes to the closest store (Walmart). An hour to the closest hospital. No shopping. Very few good places to eat out (or any really so you take what you can get). Going an hour+ to the movie theater once or twice a year is a major event because it's so inconvenient. No one I grew up with wants to live there any more. Oh and well water that is full of iron and stains your cloths red. Just remembered that "fun one" right before hitting submit.

They're not moving to your rural areas but places like Bend, Oregon.

Telluride, Jackson, Carmel....

Except those places are even more expensive than where they came from...