Anonymous wrote:Real estate might dip when interest rates increase significantly. But I cannot imagine 5, 6, 7% interest coming any year soon.

While many are fleeing DC in record numbers due to telework, isolation during COVID in small space, dismay at how schools handled COVID, and crime, DC will surely replace many of those folks with people fleeing cities with worse crime and less jobs. This new recession can only help DC.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can tell people all day long "it's basic supply and demand," but they won't listen. Too bad for them.

Population has not exploded so dramatically in the last five years to explain this current price swell.

1. It's called "supply" and demand for a reason. We overbuilt pre-2008, but then we overcorrected and have built millions fewer houses than needed to keep up with population growth.
2. The distribution of population age matters. The millennials are an unusually large generation and they are in their peak home-buying years. This means that the demand for housing is higher than would be predicted by population growth alone.
3. Prices are also a function of interest rates. Cost of ownership has gone up by a lot less than prices have.

+1

DC absorbed so many people from across the U.S. in the Great Recession. I remember being surrounded by out of state plates on the road, especially CT and NY. Plus, DC is the nation's capital, and we are a favorite for many new immigrants. At this point, it's rare to meet someone from here, at least where I live. Yet we aren't building many new subdivisions in the burbs. We are mostly tearing down old inventory and replacing it, and building new townhome communities with affordable dwelling units, or apartments and condos. So the SFH inventory is very tight, and even more so if you cannot buy new. And it is only going to get worse, the more we tear down.

Not. Even. Close.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can tell people all day long "it's basic supply and demand," but they won't listen. Too bad for them.

Population has not exploded so dramatically in the last five years to explain this current price swell.

1. It's called "supply" and demand for a reason. We overbuilt pre-2008, but then we overcorrected and have built millions fewer houses than needed to keep up with population growth.
2. The distribution of population age matters. The millennials are an unusually large generation and they are in their peak home-buying years. This means that the demand for housing is higher than would be predicted by population growth alone.
3. Prices are also a function of interest rates. Cost of ownership has gone up by a lot less than prices have.

+1

DC absorbed so many people from across the U.S. in the Great Recession. I remember being surrounded by out of state plates on the road, especially CT and NY. Plus, DC is the nation's capital, and we are a favorite for many new immigrants. At this point, it's rare to meet someone from here, at least where I live. Yet we aren't building many new subdivisions in the burbs. We are mostly tearing down old inventory and replacing it, and building new townhome communities with affordable dwelling units, or apartments and condos. So the SFH inventory is very tight, and even more so if you cannot buy new. And it is only going to get worse, the more we tear down.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can tell people all day long "it's basic supply and demand," but they won't listen. Too bad for them.

Population has not exploded so dramatically in the last five years to explain this current price swell.

1. It's called "supply" and demand for a reason. We overbuilt pre-2008, but then we overcorrected and have built millions fewer houses than needed to keep up with population growth.
2. The distribution of population age matters. The millennials are an unusually large generation and they are in their peak home-buying years. This means that the demand for housing is higher than would be predicted by population growth alone.
3. Prices are also a function of interest rates. Cost of ownership has gone up by a lot less than prices have.

+1

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can tell people all day long "it's basic supply and demand," but they won't listen. Too bad for them.

Population has not exploded so dramatically in the last five years to explain this current price swell.

1. It's called "supply" and demand for a reason. We overbuilt pre-2008, but then we overcorrected and have built millions fewer houses than needed to keep up with population growth.
2. The distribution of population age matters. The millennials are an unusually large generation and they are in their peak home-buying years. This means that the demand for housing is higher than would be predicted by population growth alone.
3. Prices are also a function of interest rates. Cost of ownership has gone up by a lot less than prices have.

Anonymous wrote:People have literally been saying that prices would fall every few months for ten years. I can show you posts.

Anonymous wrote:

Classic signs of a RE bubble popping (in no particular order):

- Realtors selling their own houses. (i.e. Listing agent is the owner...). If they are selling...
- You see more and more of "No home sale contingency" - Really? You wanna sell yours, but I shouldn't sell mine?
- Multiple, relatively fast paced price reductions - They overpriced it, and now are just trying to find a floor where a buyer will step in.
- RE is all over the news. Real estate is boring. If the media is talking about it, it is NOT boring and that can mean only one thing.
- Quick flips on the market - Really? You bought it last year for xxx and now you want yyy? For...holding onto it for a year? Because...you know you'll never get this price down the road?
- Lots of immigrants selling. This is a bit unusual, but I've been an agent for over 30 years, and I've seen this many times. Immigrants, especially from Asia, are very prudent and rarely flip RE for profits. If they are selling...
- Opendoor/Zillow/LLC owners selling. This one is self explanatory.
- New houses sitting on the market - If new houses are sitting...with presumably the latest in design trends, layouts, finishes etc...
- Price reductions on new builds - see above.
- You see lots of "defensive" talk from current owners that it's not a bubble. Pretty self explanatory. They are scared.

There's many many more reasons, but in the end it's all about wages vs real estate. If wages are NOT rising in line with real estate, then by definition it's a bubble. Don't be the "Greater Fool", buy what you can comfortably afford, is priced realistically, and plan to be in it for many many years. The transaction costs for RE are about the worst for any asset class.

Classic signs of a RE bubble popping (in no particular order):

- Realtors selling their own houses. (i.e. Listing agent is the owner...). If they are selling...
- You see more and more of "No home sale contingency" - Really? You wanna sell yours, but I shouldn't sell mine?
- Multiple, relatively fast paced price reductions - They overpriced it, and now are just trying to find a floor where a buyer will step in.
- RE is all over the news. Real estate is boring. If the media is talking about it, it is NOT boring and that can mean only one thing.
- Quick flips on the market - Really? You bought it last year for xxx and now you want yyy? For...holding onto it for a year? Because...you know you'll never get this price down the road?
- Lots of immigrants selling. This is a bit unusual, but I've been an agent for over 30 years, and I've seen this many times. Immigrants, especially from Asia, are very prudent and rarely flip RE for profits. If they are selling...
- Opendoor/Zillow/LLC owners selling. This one is self explanatory.
- New houses sitting on the market - If new houses are sitting...with presumably the latest in design trends, layouts, finishes etc...
- Price reductions on new builds - see above.
- You see lots of "defensive" talk from current owners that it's not a bubble. Pretty self explanatory. They are scared.

There's many many more reasons, but in the end it's all about wages vs real estate. If wages are NOT rising in line with real estate, then by definition it's a bubble. Don't be the "Greater Fool", buy what you can comfortably afford, is priced realistically, and plan to be in it for many many years. The transaction costs for RE are about the worst for any asset class.

Anonymous wrote:Nobody smart, with money and good credit, is waiting for a "crash" -- the only people talking like this are broke malcontents trying to spin yarn. They're not convincing anyone, we all see they're broke and on the sidelines.

Anonymous wrote:

I drove on I66 from 234 for years and there was so much more traffic headed towards the beltway than away from it. I just don't believe it. I'm sure there is VA job growth but your explanation for home prices going up closer to DC (because wealthy people want to be cool and live closer to DC) sounds....well....fake. Like a reason a child would make.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Instead of building new neighborhoods, we are tearing down existing inventory and replacing with new builds. That's zero net gain on inventory. Consider how many new SFH developments you've seen in last few years. Probably 1 or 0. If zoning were to curb tear down activity, inventory would skyrocket.

??????

I guess some people have an ideological axe to grind regardless of the facts. It laughably doesn’t pass the “open your eyes” test.

There are definitely new developments being built. Teardowns aren't a major problem for building new housing. Land in general is. People can only live so far from work and as that land fills up with housing, new developments are pushed further and further out. Before you know it, you're building in Frederick MD or Gainesville VA. Only so many people can deal with those kinds of commutes.

Commutes to where? It’s funny that people who say these types of things don’t have a good understanding of where the job growth is occurring.

If all the good jobs were in the exurbs, housing prices closer to DC would be cheaper, not more expensive, than the exurbs. I know it's a DCUM VA meme to claim everything is happening in Virginia but the real estate market shows that people want to be closer to DC, not further from it.

First of all, the point is about job growth and commutes. The belief that people who buy in the exurbs commute to DC is wrong. Currently, the unemployment rate in NoVA is substantially lower than DC and prior to the pandemic, Loudon county was leading the region in job growth which I can only assume is continuing. People that live in Stafford don’t need to commute to DC because there are plenty of high paying jobs in NoVA. There is a similar story in Frederick county, MD.

Second, a substantial number of people that live in DC reverse commute to jobs in the suburbs. For affluent people, the choice to be in DC is one of lifestyle and proximity to private schools. It also can be a strategic choice because it allows you to drive to work in Bethesda, Arlington or Fairfax with limited traffic.

Therefore, the price signals reflect the price of lifestyle amenities. But in any case, you don’t have a good grasp of the regional market and current market price signals. Arlington has had the highest median sales price throughout the pandemic, while the most expensive houses are undoubtedly in Great Falls. In fact, several zip codes in DC have seen declines in median prices.

The regional job picture is no longer DC centric and it’s quite clear that NoVA is leading the region by far in high wage private sector job creation. There may have been a time that DC led in construction and service jobs from 2017-2020 (I won’t bother checking but it seems plausible) but that time is over now.

This isn’t about memes, it’s about reality. There are about a dozen Fortune 500 companies HQ’d in NoVA, predominately in finance, technology and professional services. Not to mention major divisions of companies, like AWS/Amazon. DC has 1 (2 if you count Fannie Mae which could leave too!). There are also a number of major law firms that maintain offices both in DC and NoVA.

For people that only work in and around government, it’s easy to see how they could have a DC-centric view of jobs but if you work in the private sector in a high paid job, you’re going to be working in NoVA and most likely between Tysons and Herndon.