Thursday, June 22, 2006

The Bubblicious Fence

First we had the bubblicious wall, then the bubblicious bench and now there is the bubblicious fence. The bubblicious fence is located at 1117 10th Street NW in Washington, DC.

As of 6/22/06 it the bubblicious fence has 29 lockboxes hanging on to it.

The condo building is called Quincy Courts. It has a total of 135 units. Original sales began on 3/15/05. Many flippers and specuvestors bought here. Located at the edge of downtown and right next to the Massachusetts Avenue corridor it certainly has many other condo units to compete with for buyers.

[Please feel free to copy the bubblicious fence image onto other sites as long as credit is given.]

I checked ZipRealty and found 31 units for sale at this address which is actually more then the number of lockboxes on the site.

The bubbleheads have a new mecca in the Washington, DC area.

Prices for units that are for sale on the MLS:
Data from ZipRealty

Studios (4 units): 259, 269, 286, 342

1br 1ba (10 units ): 359, 359, 425, 449, 449, 470, 474, 475, 479, 480

2br 1ba (3): 479, 535, 609

2br 2ba (13): 529, 579, 614, 619, 638, 638, 749, 829, 839, 850, 859, 979, 1095

2br 3ba (1): 833

Total units for sale in MLS: 31 (as of 6/22/06)

176 comments:

  1. I remember seeing these units start to pop up on Craigslist recently, and thinking that based on the photos and the prices they were asking --I think over $400k for a 1BR--that they must be ripe for specuvestors. Viva la bubble!

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  2. Maybe we can get David Lereah to take a walk over here from the National Association of Realtors and take a look.

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  3. No worries. Most young people in DC are lawyers making between $120K and $140K a year. They will be snapping these condos up lickity-split.

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  4. Wow, the prices of the 2br 2ba unitis are all over the place.

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  5. It would be funny if somebody went to that fence with bolt cutters and made all the lock boxes disappear.

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  6. The sellers will do that once they figure out they are being lampooned.

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  7. james said...
    "It would be funny if somebody went to that fence with bolt cutters and made all the lock boxes disappear."

    Why?

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  8. GOOD WORK David Bubblemeter :>}

    Anon 9:56
    "No worries. Most young people in DC are lawyers making between $120K and $140K a year. They will be snapping these condos up lickity-split."

    Chances are that the young lawyers that are making $120K a year are smart. If a halfway intelligent person sees the bubblicous fence he will see despiration and be concerned about resale. At least he knows he is in the driver seat and can negiotate prices. If I was making that much I would buy a townhouse in Gaithersburg and take MARC. (One can only dream)

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  9. "If I was making that much I would buy a townhouse in Gaithersburg and take MARC. (One can only dream)"

    Sounds more like a nightmare! Why don't you just move to NC and get on with your life?

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  10. "Chances are that the young lawyers that are making $120K a year are smart."

    You clearly do not know any young lawyers making 120K.

    Just kidding, just kidding.

    A Redskins fan

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  11. Smart and wise are really different animals. A good education does not innoculate one from bad judgement.

    NOVA Fence Sitter

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  12. Nova Fence Sitter,

    I like your comment, and would add that "good education" does not necessarily equal "smart." I've met lots of SMART folks with little to no formal education, and plenty of DUMB folks with plenty of formal larnin'.

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  13. David,

    My search on Ziprealty brings up 36 properties for sale at this address...haven't figured out which ones you're missing yet.

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  14. Money magazine did an article recently on 3 different home buyers with exotic loans and how they should prep for the expected ARM adjustments.

    One of the case studies was a lawyer who didn't realize how much his expenses were about to go up.

    Mind you, he could afford the adjustment, but he "was shocked" to find out what could have happened.

    My $0.02.

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  15. Anon 11:50
    "Right. So just execute the plan and stop complaining about your life."

    Whose complaining about life. I have only posted complaints about the house prices.

    "And if you are in the process of moving to NC, why is buying "a townhouse in Gaithersburg and commuting on the MARC train" a "dream" to you? "

    Being in a townhouse in a halfway decent place is my dream. Not happening here, so Raleigh or Charlotte is on my radar screen. I like Carolina more than DC metro anyway.

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  16. Intelligence without common sense is worthless.

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  17. "Whose complaining about life. I have only posted complaints about the house prices."

    Weren't you complaining about how you lost your job and had trouble finding a new one, complaining about having to sell your house, complaining about living in an apartment, and complaining about your salary and the high cost of living? oh, AND you were complaining about how the DC area is undesireable compared to NC.

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  18. About the 5 your missing--I guess you didn't count the five for sale in the "wing" building, which only has 10 units in it (one per floor).

    So, 50% of that building is for sale! You can have your choice of 1 for $829k, 840k, 850k, 859k, or the top floor (I guess) for $980k.

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  19. Opps. I meant "you're."

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  20. A quick check (not terribly thorough) shows that these sellers aren't hurting yet...everyone seems to be asking at least $50k more than they paid...sometimes significantly more.

    Give it some time...

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  21. $300 condo fee...
    $200 property taxes...
    $1,200 I/O payment...

    Month...after...month...

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  22. A bunch of comments were deleted for being off topic. Be warned.

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  23. They will be lucky to get out without a loss, if I was one of them, I'd be undercutting the others to make sure I wasn't the one left holding the bag--the last one will sell at the lowest price.

    That's how it works.

    And I can see why they wouldn't want to live there--it's not yet a "neighborhood", a bit bland, despite the proximity to Logan.

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  24. "Being in a townhouse in a halfway decent place is my dream."

    Well, there's plenty of us that don't consider Gaithersburg heaven, and don't see it as "superior" to the city, as you seemed to be implying.

    Of course you're entitled, the comparison to the city condo just seemed a little odd--different animals, different priorities for those attracted to them: space vs. commute, or space vs. pedestrian lifestyle.

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  25. my question how many people do you personally know trying to sell a condo/home and how many do you know who are shopping to buy....?

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  26. DC Condo WatcherJune 22, 2006 4:20 PM

    The peak of listings at Quincy Court was 43, about 1.5 weeks ago. When I first checked the building a month ago, there were 19 units, and rapidly went up to 43. Back down to 36, because I think a lot of them were "Rent" or "Sale" whichever happened first, and some were rented.

    Right behind the building, is another 14 story condo building, about 6 months away from completion. 1 block up the street, there is another 9 story condo building about 2 months from completion.

    I would NOT buy in that area at this time unless in for the long haul (5 years +)

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  27. dc condo watcher
    2 condos in development nearby, interesting. Must be the builders are so far into it they can't bail out. It would be interesting to see the inovative marketing wizardtry they will have to pull off to entice buyers.

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  28. My dream is to move into some crappy loft in a run-down industrial part of town.

    I am seriously considering some Rust Belt cities for re-location. Real estate is a bargain in Midwest urban locations (outside of Chicago).

    Then I fix up the loft. Starbucks, Cosi, and Ann Taylor invade my neighborhood. I see more Acuras, Audis, and BMWs on my street. I sell my loft to a charming, pasty white couple with JD and MD after their names. I get 200 percent return on the sale. I become a Bubblehead Yuppie. And then I die.

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  29. "I sell my loft to a charming, pasty white couple with "

    Its ok to say that, but you can't say "I sell my loft to a couple of darkies"

    Right?

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  30. Mr. Yuppiehater
    You make this blogsite so much fun.

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  31. .02, 'Injun Lover, and IHateWhitie all live in Silver Spring. Coincidence?

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  32. Is Silver Spring the Bethesda end of the redline or the other end?

    My $0.02.

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  33. Hah! not that you would ever use public transportation...

    It is the long-dormant satellite town clinging to the boarder of your nation's capital. It was only recently revitalized and made remotely desireable because of, because of, ummm, a development boom.

    It is an amalgamation of the worst of the burbs, and the worst of urban living.

    But you gotta love Colesville road!

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  34. Does Silver Spring have a Cheesecake Factory yet? It isn't safe for decent folks until it has one (like Bethesda)

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  35. Question for all the anon (whichever side of the fence your on)

    Are you married and have kids?

    A lot of you guys sound just like I would have when I was 25, single and chasing girls all the time. A small rental on a nice pedestrian street would be great.

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  36. Chicks only dig guys who live in beige, shoebox apartments in the suburbs. Those of us in the city proper never get any action.

    Yeah, there aren't any gorgeous women cruising around Logan Circle on Vespas, wearing high heels and short skirts; especially not on hot days like this one.

    Skins Fan, how about cutting some of those babes loose and giving us losers in the city a shot?

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  37. David, I just don't see why you deleted my posts. They were all logically correct. There's nothing wrong with point out fallacies in others' arguments. That's not an attack.

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  38. LOL at you Silver Spring haters. Silver Spring has good and bad. There are a LOT of hotties around here, but I am a married man so I can just watch. Anyway, I certainly don't think Silver Spring or DC or this neighborhood or that neighborhood is the issue; all DC area real estate is overvalued right now. Silver Spring is just as overpriced as downtown DC.

    There is no Cheesecake Factory. Make of that what you will.

    A Redskins fan

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  39. Closer into Logan Circle is The Radius. Always a dozen or some units for sale, 1 bd were listing for $400k a month or two ago, now the typical offering price is $375k, with some in the mid $360k. That's already quite a drop in percentage terms, but I think that any 1bd in that place is worth $250k max.

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  40. Guys it is normal for a good portion of the units to be for sale after a new building is completed. Yes there was significant investor activity in pre-construction, but guess what, without investors these building would never get builr. There will always be buyers for these units if they are priced correctly. Just look at what happened to the bubblicious bench at Halstead-- very many lockboxes at first, but after a month or two it dropped to just a few boxes. Nothing out of the ordinary.

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  41. Any realtors onboard that can tell us whether these places sold or were rented? And if the flippers made $$?

    I watch Reston and the inventory is still at several year highs for condos.

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  42. "$360k. That's already quite a drop in percentage terms, but I think that any 1bd in that place is worth $250k max."

    I think this is great, if it is true. It makes these units much more affordable, and that just means more people with a vested interest in their nation's capital. What a concept.

    bryce

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  43. Spin, spin, spin that bad news, Bryce/Lance!

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  44. "Just look at what happened to the bubblicious bench at Halstead-- very many lockboxes at first, but after a month or two it dropped to just a few boxes."

    The lockboxes for those units aren't on the bubblicious bench. But, many of those units are still for sale. The lockboxes are stored elsewhere.

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  45. But...but..wha'appen to all the GS-15's and SES's who were gonna snap up all these condos -- and the additional 52,000 units coming on the market over the next 15 months (source: Washington Post). But...but...

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  46. Jerkstore, it's going to be just like what's happening in Norfolk...we've got all these navy folks to keep moving in, right? So if we keep building condos (and they are sprouting like weeds in a pasture), we have this endless supply of navy folks and other people who think Norfolk/VA Beach is such a great place to live, right?

    Except for the fact that one carrier is being moved elsewhere, Oceana Naval Air Station's fate is on tenterhooks, and there are plenty of mcmansions popping up around the area as well.

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  47. Anonymous said...
    "Jerkstore, it's going to be just like what's happening in Norfolk..."

    'cept that your mcmansions and condos are dirt cheap there compared to what we pay here with our much higher salaries. 4 bedroom/ 2 car garage houses going for $350,000! That doesn't buy you anything but a small condo here. With prices like that, don't worry, if the Navy pulls up stakes and moves to someplace like New Mexico, our bitter renters will pull up stakes from Washington and go running to buy whatever you can sell them ... And we'll be glad to be rid of them! Problem solved! Next problem.

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  48. wvu_84 I am totaly with you. I moved up to DC from NC and it was the worst decision of my life. Greed is what brought me up her. Now I am looking to go back. And the costal area is great. One of the last costal areas on the east cost.

    DC is all about traffic and insanity

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  49. Life is what you make of it, regardless of where you live.

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  50. Why doe these people think they can get DuPont prices in a still-shady area of town? These are the types of prices that you will see big reductions on.

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  51. Anon 4:55
    Carolina beaches rule! Which part of NC are you from?

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  52. Hah! the White house is no more than 2000 feet away from this place. The entire area has quickly transformed into a draw for tourists. (Hooters, The Spy Museum, the Verizon (MCI) Center, the Convention Center, sheese, there's even a Bed Bath & Beyond)

    I suppose its shady if you're from Poolesville, MD.

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  53. Wow, Maybe I can pick up a bargain there! My landlord gave me notice yesterday ... He said the neighbors were complaining that my place smelled.

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  54. Has anyone seen members of the large Mennonite community in DC? They're like Amish people, but they drive cars and ride the Metro. They live concentrated in areas like Mount Pleasant. (a shady neighborhood in DC)

    Nothing strikes fear into the hearts of outsiders like the sight of Mennonites waiting for the subway train to arrive! lol!

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  55. The mayor of DC testified before congress yesterday concerning the city budget. What is interesting is that while the mayor and the president of the united states have very different viewpoints, they are actually *collaborating* on hundreds of millions of dollars in expenditures for development of real estate in the city of washington. This includes the Anacostia waterfront, and a new library system.

    You can read excerpts from the testimony at www.dc.gov

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  56. "DC is all about traffic and insanity."

    No, if you actually live in DC, as you claim, then it's not all about traffic. You can walk, bike, metro about anywere in the city in 30 minutes.

    Now if you live in some suburban hellhole, then you have traffic problems. But why would you choose to live in such a place anyway?

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  57. "they are actually *collaborating* on hundreds of millions of dollars in expenditures for development of real estate in the city of washington."

    But DC is different (said the bubblehead with an ironic, bitter tone). Maybe it is more different than bubbleheads concede. I haven't seen the Feds building gigantic office complexes and and other jointly developed properties in every other city in the U.S.

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  58. anon (6:55) said:
    "No, if you actually live in DC, as you claim, then it's not all about traffic. You can walk, bike, metro about anywere in the city in 30 minutes.

    Now if you live in some suburban hellhole, then you have traffic problems. But why would you choose to live in such a place anyway? "

    You're hit the nail on the head as to why District properties are becoming ever more valuable (and pricey.) As the population increases, and the surrounding areas --- with their LIMITED land --- get more and more overfilled with people and cars, the District with its well planned urban landscape, historic homes, and amenities such as world-class museums unavailable elsewhere in the nation, is that sea of tranquility that those with the means are chosing to live in. Homes available at prices such as these are a relative bargain now compared to what they will cost when the District fills up sometime in the next decade and no new homes can be built. Then, prices will really sky-rocket to match those charged in places like Manhattan.

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  59. anon (6:55) said:
    "No, if you actually live in DC, as you claim, then it's not all about traffic. You can walk, bike, metro about anywere in the city in 30 minutes.

    Now if you live in some suburban hellhole, then you have traffic problems. But why would you choose to live in such a place anyway? "

    You're hit the nail on the head as to why District properties are becoming ever more valuable (and pricey.) As the population increases, and the surrounding areas --- with their LIMITED land --- get more and more overfilled with people and cars, the District with its well planned urban landscape, historic homes, and amenities such as world-class museums unavailable elsewhere in the nation, is that sea of tranquility that those with the means are chosing to live in. Homes available at prices such as these are a relative bargain now compared to what they will cost when the District fills up sometime in the next decade and no new homes can be built. Then, prices will really sky-rocket to match those charged in places like Manhattan.

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  60. No VA.

    A small sample from my area.

    An example:

    1,243 listing in Fairfax Co.
    97 in our zip

    2 listing Barclay

    Both same TH's

    599,000 on market now 90 days bought for 400,000 2 years ago
    595,000 on market 40+ days

    17 of the TH's were bought around the one listed for 599,000 in the last 2 years. 13 of them at an average price of 650,000

    This means if the above 2 TH's sell at 550,000 or less than 13 people will be stuck with townhouses valued at a minimum of 100,000 less they they paid.

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  61. Lance's arguments are embarrasing.

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  62. Anon 4:39AM, Norfolk girl again.

    True. But in the great scheme of relativity, housing prices here in the Tidewater have nearly doubled in the 3 years I've been living here. LOTS of flipping going on; I know because I was looking at buying a house until recently. The flipper model here goes as follows: buy a house in the ghetto, fix it up, sell it for twice what you bought it for. Right? Not so much. At the end of the day, it doesn't matter if you're in DC or the Tidewater, an overpriced piece of junk is an overpriced piece of junk.

    There's only so many 80-year-old houses in the ghetto with fatal mould infestations (you know, the kid you can see coming through the walls) being offered for three times what the purchaser bought them for that a girl can stand.

    On top of that, the condo prices here are still extremely high. Condos at the beach go for beach rates. Condos in downtown Norfolk are going for $350,000 for a 2-bdrm. Townhomes near downtown start at $850k. I know that's still cheap compared to DC, but this ain't DC. The kind of wealth and jobs that exist in DC just aren't here. There are at least 6 big condo developments going up, including a high-rise, in an area without the people and without the money to support them. It'll still hurt when the boom comes to an end.

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  63. Lance, are you laughing when you write some of this stuff. I mean, honestly.

    The District is a fine town, but it's not a true urban experience like most of our world-class cities. The landscape of the vast majority of the city is incredibly pedestrian, boring, charmless, if you will. I mean, I lived in Baltimore for 4 years and that town was more urban and felt more like a city than the district does. And DC is nowhere near filling up. It would take 30 or 40 years of massive in-migration for that to occur. I suggest you look-up DC's peak population. It would take a lot of childless couples to reach that level again.

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  64. Were ghettos ghettos before they became ghettos? Or did fundamental changes take place?

    Did native americans roam these lands freely, never conceiving the notion of one person "owning" a piece of land? Or did fundamental change take place?

    Nah, nothing significant ever changes, especially in terms of the availability of land and the character of neighborhoods. And if something does change, it stays that way throughout eternity.

    Y'all enjoy your exurb ghettos this weekend, with yer traffic and yer lawn mowers and yer drivin' to the Applebees. Y'hear?

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  65. an interested observerJune 23, 2006 10:47 AM

    I think a lot of people are getting off point. Now, even some bulls (VA-investor) have indicated that they don't think it is a good time to buy real estate from a financial perspective. Others persist in claiming we either have, or will have a "soft landing" though this usually remains undefined. I beleive the only question worth discussing is "In light of all available information, what do you think will happen to Real Estate prices going forward?"

    To that end, I propose a poll, just to pin everyone down on what they are saying. I suggest everyone give their predictions for the sales price of a hypothetical Bethesda SFH (Some may argue it should be a DC home, others may argue for the exurbs, I think this is in the middle and pretty indicative of the DC Metro market). The hypothetical home had a peak value in Aug 05 of 530K and is now valued at 500K. What prices do you see it fetching at 1yr, 3yr, 10yr in nominal, inflation unadjusted dollars?

    I'll go first
    2007- 450K
    2009- 400K
    2016- 520K

    I believe by doing this, we may have a more rational discussion of where people see the market going and their underlying reasons, rather than the same tired, unsubstantiated arguments over and over again.

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  66. I lived in Norfolk (2004 - 2005) in the Ghent area. All the doctors working at Sentara (by the thousands) are driving the prices up. The Sentara complex keeps growing and growing..... Also Ghent is a great place to live. I was renting in a nice apartment (Pembroke Towers for $750 month for 1 bedroom) and had a nice view of the Elizabeth river.

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  67. Norfolk girl, Don't worry about Oceana being closed down. That won't happen in a million years. The Navy is just playing its cards. They've been asking the city of Va. Beach to stop building near the base for years ... to no avail. The "threat" gives them the leverage to get this concession ... But there's not a chance they would move the base ... That would be too costly. Also, the reason you're seeing prices go up so high and so quickly in Hampton Roads is due to the same government spending tied to Iraq and 9/11 that is helping drive up prices in the DC Metro area. The new realities are very costly to the nation. And while the costs are being borne by the nation as a whole, the related expenses are being made for the most part in Washington via the Pentagon and places like Hampton Roads and San Diego via the military. Wars have always been a major factor in the expansion of cities and an increase in their fortunes. The high prices for housing in these cities reflect their good fortunes in being on the receiving end of government spending. It's simple economics. You can move to where the housing is cheaper ... but you won't have work there ... or at least not make there what you can make in booming areas.

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  68. 2007 - $500
    2009 - $550
    2016 - $680

    Perhaps you should choose a 1950s era Arlington garden apartment style condo. Then you might get a different answer!

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  69. No, real estate markets are local. You cannot apply this hypothetical Bethesda scenario to the entire region.

    Who buys an SFH in Bethesda? White couples with or planning to have kids. They are salaried professionals who want the mix of shopping-mall oriented lifestyles with access to a Metro station.

    How many SFH homes are there in Bethesda? I suggest that there are a limited number of SFH homes in Bethesda, and that *all* the land for SFH homes in Bethesda was used up in the past. (this doesn't preclude "tear down" purchasers)

    Will prices drop? Yes. Will they still be under today's real value in ten years? HAhaha! Guess we'll have to wait and see.

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  70. Rationale discussion? Why are you posting here?

    Here is my prediction
    2007- 485
    2009 - 450
    2016 - 550

    I have the same feeling as when I'm picking lottery numbers - who knows. I think its going down but my gut tells me it won't go down alot. Too many factors to know for sure.

    NOVA Fence Sitter

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  71. an interested observer,


    2007- 600K
    2009- 700K
    2016- 1.2M

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  72. Bethesda median household income. (MEDIAN!): $107,631

    Median home price: $604,434

    Median age: 42

    Next door to Bethesda we have Chevy Chase MD. Median household income: $104,771

    Median home price: $630,928

    Median age: 45

    These are relatively wealthy people who are in these homes for the long-haul to raise their kids and play out their careers in powerful jobs in the capital city.

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  73. I live in "the ghetto" in dc. I bought a home (not a condo) years ago and my household income is a smidge north of $160,000. I have no car payment.

    Guess I should sell the house, (comps on my street are still going to contract for about $110,000 more than I paid) move to an apartment in Silver Spring and buy a car so that I can start saving some money. I'll get right on that. (actually, I suspect my living expenses would actually increase if I were a renter, especially with that electric rate hike in MD. Zowie.)

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  74. Silver Spring Median Household Income: $63,509.

    Now I see why the renters in Silver Spring are, in fact, bitter. Career change fellas. You can do it.

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  75. anon 8:15
    "Silver Spring Median Household Income: $63,509."

    "Now I see why the renters in Silver Spring are, in fact, bitter. Career change fellas. You can do it."

    Hmmmm! Should I go to law school or medical school?

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  76. We really need more detail the just the median numbers...quartiles would be nice. However, I don't think a household with the median income can afford the median house.

    NOVA Fence Sitter

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  77. My guess is that prices peaked in the spring of 05 and will not pass these points until 2013 and will double 05 prices by 2020.

    I gladly stake what little reputation I have on these predictions. BTW, this is just a reprise of the last "cycle".

    The precise bottom will be 2009.

    That and $1.50 will get you a cup of coffee.

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  78. how many tens of millions more people exist today than were alive during the last cycle?

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  79. "However, I don't think a household with the median income can afford the median house."

    Perhaps they purchased modest starter homes in other areas when they were in their early 30s (as opposed to now, when they are in their 40s), and sold those homes a few years ago? That would easily generate a 20% downpayment on a 600,000 house.

    In any event, whether they paid too much and are now priced into their Bethesda homes, or if they are living comfortably with their current financial arrangements: they're likely to stay in those homes in Bethesda for the long term; 20 years or so. Either way, they're fine.

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  80. wvu_84 said...

    "Hmmmm! Should I go to law school or medical school?"

    You don't need to go to law school or medical school to increase your earnings, though an advanced degree is definitely helpful in this metro area. I read somewhere that we have the most advanced degrees per capita of any part of the country. Advanced degrees can be had with fairly little pain in one of the many programs that local universities have set up. Most employers around here will even help pay at least some of the tuition and other expenses if the degree can be applied to your present job (IRS regs allow them to write them off if they do.) But this is all a matter of choice, obviously the average income for Silver Spring is sufficient to get you into a property in Silver Spring ... or there wouldn't have been any sales there since the prices went up generally in the area. And there's nothing wrong with Silver Spring, I lived there for 5 years before moving into the District 10 years ago. Nice people, relatively cheap housing expenses, great parkland all around, and really easy access to parts of the DC metro area.

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  81. that was supposed to be "all parts of the DC metro area." ... I keep fat-fingering!

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  82. how many more tens of thousands of dwellings exist today than were built during the last cycle?

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  83. Lance
    Yes, you don't need to go to medical or law school to increase your earnings. If you want to increase your earnings enough to afford a house in the fine neighborhoods of Silver Spring I see only 3 possibilities medical school law school or start your own business and be sucessful.
    Other statements in your post makes me wonder if you have been asleep for 3 years and just woke up.

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  84. Lance
    "obviously the average income for Silver Spring is sufficient to get you into a property in Silver Spring ... or there wouldn't have been any sales "

    Let's apply this logic elsewhere and see how it works. Medical insurance is skyrocketing, but everyone's income is sufficient to get medical insurance. Over 40% are uninsured, must be they can afford health insurance and chose not to have it. This logic is not working for me. Help me out Lance.

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  85. It is probably a matter of "guns or butter" in many of those cases wvu.

    Butter= new cars, clothes, dinner out etc.

    guns = investments, savings, ins.

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  86. "how many more tens of thousands of dwellings exist today than were built during the last cycle?"

    Let's take a closer look at the basics:

    1,000,000. This is one million. The population of the united states has grown by OVER 110,000,000 new people in my lifetime.

    1,000. This is one thousand. There is a fundamental difference between 1,000 and 1,000,000; but for the sake of your argument, lets say that residential housing units have increased by twenty million, 20,000,000 in the past three decades. I don't know for certain, but I suspect this is a very generous number that overcompensates for the sake of your argument.

    So, 20,000,000 new residential housing units for 110,000,000 new residents. Average household size in the us is about 2.5 people, isn't it?

    Gowing forward, we're facing a total population of 400,000,000 residents of the united states in the next 20 years. And how many thousands of new housing units will there be? We'll all be renters by then anyway, right? Forced out of our homes by the oversupply of homes.

    ReplyDelete
  87. va_investor
    "It is probably a matter of "guns or butter" in many of those cases wvu."

    I don't understand what you are trying to say.

    ReplyDelete
  88. VA, "guns or butter" referrs to government spending for military vs. social purposes. "Guns" does not mean investment or savings.

    ReplyDelete
  89. It does in my context.

    ReplyDelete
  90. va_investor
    "Butter" means "new cars, clothes, dinner out etc"
    "Guns" means investment or savings.

    What are you trying to tell me?

    ReplyDelete
  91. "Obviously the average income for Silver Spring is sufficient to get you into a property in Silver Spring ... or there wouldn't have been any sales there since the prices went up generally in the area."

    ...because people never buy things they can't afford.

    Once again, embarrassing. I suggest we all stop responding to Lance.

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  92. WVU
    "Let's apply this logic elsewhere and see how it works. Medical insurance is skyrocketing, but everyone's income is sufficient to get medical insurance. Over 40% are uninsured, must be they can afford health insurance and chose not to have it. This logic is not working for me. Help me out Lance."

    Put simply, if people couldn't afford to buy in Silver Spring at the prices that properties were selling for, then nothing would have sold until sellers had lowered their prices. And that didn't happen. A median income is just that ...

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  93. wvu,

    I am saying that some people are not prudent enough to prioritize insurance.

    ReplyDelete
  94. median income is just that .... Some fictitious level of income where half the people are wealthier and half the people are poorer. And in our country where the wedge between rich and poor is ever expanding, the poorer ones are just LESS able to buy than before while the richer ones are MORE able to buy. So, using "median" income as the level where people should be able to afford to buy really means nothing. It's just that those who already would have had a hard time buying are now having a harder time ... and it doesn't help that with the rich getting richer, they are pushing up prices even further. Not a pretty truth ... but much truer than the fiction that there is a bubble out there.

    ReplyDelete
  95. Something tells me the bitter renters were terrified in their certain knowledge that armaggedon would unfold at the stroke of midnight on January 1st, 2000. Planes were going to fall out of the sky, bank accounts would be eradicated, and blood would flow from their bathroom faucets.

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  96. There is a huge housing bubble that is going to set the national economy back by at least 10 years.

    The earth is flat, and sailing beyond the horizon will lead to certain death.

    Both statements have a ring of truthiness that influenced people's thoughts, decisions, and actions over time.

    ReplyDelete
  97. anonymous (10:03)

    you've obviously never been qualified for a house loan. if you had, it is very difficult to overstate income/ understate debt etc. every loan person i've ever dealt with has required tons of paperwork and copies of statements to qualify me. i know a lot of folks on here think mortgage lenders can just lie to get you qualified. all i can say is that that has never been my experience .... and since underwriting rules are written by the feds, i don't believe you'd have that many lenders out there willing to risk jail time just to get a couple extra "sales." i suspect most people disagreeing with this have never even applied for a loan, or they'd know all the documentation and verification that is involved in getting your "information" accepted as a basis for the loan.

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  98. Lance said...
    "You're hit the nail on the head as to why District properties are becoming ever more valuable (and pricey.) As the population increases, and the surrounding areas --- with their LIMITED land --- get more and more overfilled with people and cars, the District with its well planned urban landscape, historic homes, and amenities such as world-class museums unavailable elsewhere in the nation, is that sea of tranquility that those with the means are chosing to live in. Homes available at prices such as these are a relative bargain now compared to what they will cost when the District fills up sometime in the next decade and no new homes can be built. Then, prices will really sky-rocket to match those charged in places like Manhattan"

    Lance, you must be joking. Have you ever really experience world class unban life? Coming from Chicago, I think DC is far far behind. Georgetown is no where near Lincoln Park, and Potomac River is a joke comparing with Lake Michigan. Giving the beautiful Grand Park and Millinium Park, National Mall is just so so.

    Wake up, buddy, DC may be in progress, but it needs years of more work to catch up with those world class cities.

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  99. va
    "I am saying that some people are not prudent enough to prioritize insurance."

    I agree with that statement. Why are you telling me this, or what prompted you to tell me this?

    ReplyDelete
  100. Lance said...
    "you've obviously never been qualified for a house loan. if you had, it is very difficult to overstate income/ understate debt etc. every loan person i've ever dealt with has required tons of paperwork and copies of statements to qualify me. i know a lot of folks on here think mortgage lenders can just lie to get you qualified. all i can say is that that has never been my experience .... and since underwriting rules are written by the feds, i don't believe you'd have that many lenders out there willing to risk jail time just to get a couple extra "sales." i suspect most people disagreeing with this have never even applied for a loan, or they'd know all the documentation and verification that is involved in getting your "information" accepted as a basis for the loan."

    Are you in la-la-land? Go to goole and search for 'no documentation no credit check loan', it will give you thousands of links for those lenders who don't need any documents to qualify one for a home loan.

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  101. Anon (10:29)

    Sorry, I've been to Chicago, and while it is okay, it is by no means a world class city ... way too midwestern. I think my european and other international friends would agree that the US only has a few world class cities in terms of culture, entertainment, etc. ... And while Washington isn't the best (NYC surpasses it easily), it is at least on the list ... Not so Chicago ... no real culture there ... just midwestern Americana ... fun for a weekend ... not for living.

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  102. Lake Michigan is, ummmmm, a "lake" while the Potomac River is, ummmm, a "river".

    The two bodies of water are fundamentally different. They have different shorelines, which means differing ability to build along those shorelines, different tidal influences (the Potomac is influenced by ocean tides, Lake Michigan is not), and those tidal influences must be accounted for in engineering efforts, etc. Besides, almost all of the Potomac shoreline in DC is a sheer cliff face. I suggest jumping off the cliff from the Foxhall area to get an idea of what I'm referring to.

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  103. http://tinyurl.com/ltqqw

    Lending standards have slackened. That is part of how this whole bubble thing occurred.

    Lance, you are about 10 months late to this discussion.

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  104. Anon (10:34) re: no-doc loans

    Again, you obviously have never been through the loan process ... If you had, and had requested a no-doc loan, you'd know that (1) you have to put a substantial down payment to get one (something like at least 20%) and (2) there interest rate for these is at least one percentage point higher than for other loans. Bottom line: If someone was able to put 20% down on a property, they are not going to just walk away from it ... and your hope that they get foreclosed on isn't even a remote possibility.

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  105. Yep, there is no comparison between NYC and DC... yet everyone, whether they love or hate DC, makes that comparison. Which just goes to show.... they're in the same league, even if one does consistently dominate the social scene.

    And emerging DC "shady" "ghetto" neighborhoods are showing up on the radar of people in the know in NYC.

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  106. Lance said...
    "Anon (10:34) re: no-doc loans

    Again, you obviously have never been through the loan process ... If you had, and had requested a no-doc loan, you'd know that (1) you have to put a substantial down payment to get one (something like at least 20%) and (2) there interest rate for these is at least one percentage point higher than for other loans. Bottom line: If someone was able to put 20% down on a property, they are not going to just walk away from it ... and your hope that they get foreclosed on isn't even a remote possibility. "

    FYI, I owned a house and sold it last summer, re-fied couple of times. I knew all the gimicks to get one to sign up for a loan. It is YOU who are assuming lots of things.

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  107. Uh, my employer (large fed gov. contractor) hired a service specifically to verify employment status and income for employees who are in the loan approval process. Yes, mortgage companies DO look into this stuff, and it is taken seriously, even if it doesn't fit into your world view.

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  108. anon (10:41)

    Of course DC and NYC are in the same league ... that is what I said ... they are both world class cities. How defined other than than through what they have to offer? Easy ... they both attract a lot of the same kinds of people. Chicago is easily one of America's great cities ... it just doesn't play on the international stage like DC. And size isn't everything.

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  109. "Lance said...
    Anon (10:29)

    Sorry, I've been to Chicago, and while it is okay, it is by no means a world class city ... way too midwestern."

    What's wrong with midwestern? Sorry to say so, but to me, eastern people are much more rude than midwestern folks. Actually, I'm thinking about moving back to Chi-Town.

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  110. re: no doc loans

    I would add that excellent credit is required.

    I have found, however, with the advent of "credit scores" the entire process can be alot easier. It depends on the Lender.

    I've had some "kitchen sink" me and others request nothing. I refi'd 4 properties at once thru Nationwide (all rentals) and did not have to produce one piece of paper.

    When I refi'd my home thru a Broker, he wanted leases, tax returns, stock and 401 statements, w-2's and paystubs, bank account statements, etc. I think the guy was just an inexperienced moron. My home has an LTV of 30%.

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  111. I say just let the foreclosures speak for themselves. They are coming.

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  112. va_investor,

    Good point that the amount of documentation required should varying dependent on your LTV ratio and other factors such as one's credit score. I'd imagine it's like when you go to Home Depot and they open a credit line on the spot for you based on nothing more than your ID and social security number. With that in hand they check to see your credit score and if it is clean, you get a credit line that varies dependent on how high your score is. The lending process in this country is VERY evolved. Our country wouldn't be on the sure footing it is on if it was giving out as many bad loans as the bubble heads are counting on for a "burst" to occur. All these lending processes are way too controlled by too many parties for a total failure to the magnitude they are hoping for to occur. Yes, there will be foreclosures ... and the number of foreclosures will be within the variance that was calculated when these loans were issued. (i.e., to maximize profit, the lenders will have allowed some questionable loans to go through ... knowing that if you're to let the goog through, some bad must be let in at the same time if you're not to stop the process altogether.) But that is like when the airlines overbook. They know they'll be giving away some tickets for free flights in compensation, but it is worth it because the plane will have bene flying full. Like the airlines reservations systems, our financial systems are so advanced that I have no fear of a collapse like being predicted by the bubble heads.

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  113. Ok - i now believe Lance is deliberately throwing out stupid statements for his own amusement, such as...

    Like the airlines reservations systems, our financial systems are so advanced...

    There have never been this many sub-prime loans issued before. Because of this, the estimates about the number of foreclosures are based on the old model of who was likely to default. Now, it is hard to say just how many will be willing to just walk away...

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  114. Washington, DC is over-rated as an urban center of life. Downtown DC is dead during weekends. The only parts of town that have any activity happens to be in the DuPont Circle, Adams Morgan, and Georgetown areas. And that's it folks.

    I have seen far people partying in clubs, bars and streets full of people in better East Coast cities like Philadelphia and Boston. Washington, DC doesn't come to close to the quality of night life to any East Coast city except for Baltimore. This town is booooooooooooring!

    I tell my Midwest friends that if they are moving to the East Coast, try moving to NYC, Philly, or Boston. Washington, DC is the LAST resort.

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  115. 10:49 AM I completely agree with you. People on the east coast are so self involved and rude it makes me sick to my stomach. NOT all, but most. I think it is a product of the lifestyle here, fast paced, no time for waiting. If it were warmer in Wisconsin I would be there in a heart beat. I just hate the cold!
    Bob

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  116. Lance wrote:
    You're hit the nail on the head as to why District properties are becoming ever more valuable (and pricey.) As the population increases, and the surrounding areas --- with their LIMITED land --- get more and more overfilled with people and cars, the District with its well planned urban landscape, historic homes, and amenities such as world-class museums unavailable elsewhere in the nation, is that sea of tranquility that those with the means are chosing to live in. Homes available at prices such as these are a relative bargain now compared to what they will cost when the District fills up sometime in the next decade and no new homes can be built. Then, prices will really sky-rocket to match those charged in places like Manhattan.

    The Good:

    DC does have fun things to do. Fantastic parks, plenty of museums, family activities, etc. and these are usually on the weekend. But you don't want to live there. Metro in, have a good time, and get back to the suburbs to raise a family!

    The Bad: DC is going to continue to be an office park/museum district because the residents are ~80% black who blame all the cities problems on "racist" whites and the other 20% of the residents are white-guilt ridden uber-liberals. This cannot be fixed since bringing this up is a taboo subject. Hell, I would be amazed if this post isn't deleted.

    I live near Seven Corners and the shopping center is full of people from the district who come to buy their clothing and furniture at Ross, Sears, or HomeDepot. If you want "character", you can buy a lamp for $120 at a snotty Georgetown mall and maybe do some celebrity spotting and see a Congressman's wife _or_ you can pay 1/4 of that at Ross. What do you think the vast majority of people choose to do?

    Yes, "outback" is a chain and lacks the character of fancy steak houses in Georgetown, but the food tastes better and costs half as much. If you want ethnic character, there's Eden Center around the corner with an incredible Vietnamese shopping center. You can get an incredible haircut and manicure before shopping at dozens of little shops that put "Chinatown" to shame.

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  117. Seven Corners!? The armpit of the Ffx. County/Arlington confluence. Next you're going to tell us that the Chili's restaurant on Route 7 there is in Zagat's guide. And again: DC has its own Home Depot; and if you look into it you will find it is Home Depot's most profitable outet.

    dc's black population is at 60%.

    ihatewhitie(yuppie); you hate many things, don't you? why do you live in a place you despise? please let us know when you've moved away.

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  118. ihateyuppies,

    if "partying" is how you define culture, they you're 100% right ... DC isn't right for you ... or you, right for it for that matter! Let us know when you've left!

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  119. It's odd to hear all these postive forcasts for the Norfolk / Virginia Beach area since the market seems to have gone into a sudden dive:

    http://www.benengebreth.org/housingtracker/location/Virginia/Norfolk/

    I think the speculation has been extreme in that area. Plus the amount of building going on doesn't seem to make much sense given the slow population growth.

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  120. ihateyuppies, this is true.

    Sometimes when I visit Philly, I'm shocked cause I feel like I'm part of a real "city". There are people of all types and backgrounds (meaning career/lifestyle/education). It feels vibrant and alive. Which you wouldn't expect given Philly's less than stellar reputation. I've read the city is receiving a lot of NY area refugees, so that may be helping it. And they have some great residential condo projects there.

    Downtown DC, to me at least, feels like a giant office park. So yes, Dupont and Adams Morgan can be nice, but in the end, the options are very limited. I'm too used to tall, graceful buildings and widely varied architecture. And DC just doesn't have that. I hang out a lot on development forums, and the most inactive are DC. Nobody seems to care about all these condos, they're just there. It reflects the incredibly weak inner diversity of the people in this area.

    As for comments about Chicago. I grew up in the NY area, but I was incredibly impressed with Chicago. It seems to have a distinct culture and background, something DC just doesn't possess, and never will.

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  121. The truth hurts, huh, Anonymous 12:14 and "Lance Said".

    Without the seat of the federal government; the foreign embassies, and IMF/World Bank, Washington, DC would be...would be like Richmond or Baltimore. Seriously.

    btw...The weather sucks here today...it's hot and humid. My body is covered with sweat after spending 5 minutes outside. The weather in Chicago is partly sunny and 70 degress right now. Ahhhhhhh!

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  122. I guess to each their own. I was born in NYC, have lived in LA, Berlin, London, Warsaw and NYC as an adult and "settled down" in DC 5 years ago. Bye and bye, I've also lived out in the 'burbs and on a working farm. After the initial break-in period (whaddya' mean the Metro STOPS running at night?), DC really grew on me (although I think I'm getting to be old enough to appreciate boring) and it continues to improve, albeit sometimes in fits and starts. I'd like to raise children in the city, like I was raised. My block is school age child intensive, so education is always a hot topic of discussion. It IS far from perfect even w/ the local cluster school but its nice to see increasing numbers of families stick around beyond pre-school. Czesz.

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  123. Chicago has the best downtown in the USA.

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  124. I've lived in NYC, DC, and now I'm in Rome, Italy. (I follow this in hopes of maybe returning to DC to buy in a few years in the future.) Two out of those three are world-class cities. Dc is not one of those two.

    Lance, population in DC is shirnking. Check the latest census data. Your ceaseless 'limited land' argument falls flat therefore. In real terms, land availability has increased then, because there are fewer people.

    Second, DC is no New York City. Not even close. And I'm from Chicago. No go there in the comparison department. Chicago may be too midwest, but DC is too sleepy southern. Chicago has 10 million people, an amazing skyline, theater scene, mutliple sports teams, you name it.

    Lance - don't you have any customers to attend to, being that you're a real estate agent? Or are you a paid real estate tout who spends all day on blogs to cheerlead the industry?

    Whatever the case, you spent an awful lot of time on this blog during U.S. working hours...

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  125. Lance always makes the same arguments, like he's reading them from a speaking points sheet. And then the way he counsels people on how to feel, what to buy - creepy. Like a real estate agent trying to push a reluctant buyer to sell.

    Anyhow, it's obvious because - well, he's admitted on earlier posts on this blog and others that he's a real estate broker, so no surprise.

    Helpful to know something about the messenger. Buyers beware.

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  126. Adams Morgan here.

    I propose we call this version of the 'bubblecious bench' the 'flipper fence'.

    I'm a renter in one of those six-figure income households everyone seems to think are dying to pay $400,000 for a pasteboard condo. Let me count the reasons me and my fellow yuppies are holding out.

    (1) Rents are cheap in DC. You can find a nice one-bedroom in the best neighborhoods in DC for $1200-$1600 a month. Mortgage, taxes, and HOA fees for that condo would be over $3000.

    (2) Like everyone else in DC - particularly those young lawyery types - I'm from somewhere else, and probably don't plan to settle in DC forever. Why tie yourself down with a mortgage?

    (3) Like almost every other young professional in DC, I still have student loans to pay off. Law school ain't cheap, you all, and most parents don't foot the bills for those advanced degrees. It's hard to look a $350,000 mortgage in the face when you and your sweetie still have six figures in student loan debt.

    (4) DC is great, but the schools still suck. If you're still in DC (how'd that happen?), and you got married along the way and had kids, chances are you're now moving to the suburbs. Not that many professional make so much money that $10,000-$30,000 a year for private eductation doesn't pinch.

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  127. Bill lied (again):
    "Anyhow, it's obvious because - well, he's admitted on earlier posts on this blog and others that he's a real estate broker, so no surprise"

    You know that's not true. Whenever you can't present a rational counter-argument, you default to attacking the messenger. I bet you work for Jerry Falwell? or the Bush administration? You use the same deceptive tactics. So, I guess your agenda is to get people to stop buying so that prices fall and on your shoe-salesman salary you can finally buy something?

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  128. Bill,

    Sorry to read your post this morning about receiving notice from your landlord. I guess we won't be hearing from you while you go out and find another bargain rental? Oh joy!

    ReplyDelete
  129. anon (1:10) you're oh so correct. most people who've lived in world class cities know why DC qualifies for the list and Chicago doesn't (as nice as it otherwise is.) With, of course, the exception of Michael who says he's in Rome. From his posts, I starting to suspect no one has told him that Rome, NY is named after a better known city in Italy ... and that he should clarify that he is chatting from state-side. 'Course, if he really is chatting from the orginal Rome, then it begs the question as to how he is surviving without a Denny's on every corner since his "culture" and intelligence are definitely at that level.

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  130. "most people who've lived in world class cities know why DC qualifies for the list and Chicago doesn't"

    Of course, Lance can't say who these people are or give any actual reasons. Chicago doesn't have museums? theaters? a downtown? spectacular skyscrapers? sports teams? a bigger population than DC? A bigger and better shoreline?

    "With, of course, the exception of Michael who says he's in Rome."

    Oh, the one guy who has lived in a decent sample of cities actually contradicts Lance. So much for that. So, knowing Lance as we do, we know that Lance will either ignore the evidence right in front of him and pretend it doesn't exist or...just make something up.

    "From his posts, I starting to suspect no one has told him that Rome, NY is named after a better known city in Italy"

    And I'm sure Lance won't forget to throw in a baseless insult.

    "Course, if he really is chatting from the orginal Rome, then it begs the question as to how he is surviving without a Denny's on every corner since his "culture" and intelligence are definitely at that level."

    This, after Lance actually whined about all the baaaaad bubbleheads and their claims that he's a realtor and played like he was some big victim of ad hominem attacks.

    Lance, are you this idiot?:

    http://www.lancehorsley.com/

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  131. Oh, and for those of you who think that DC runs a close second to NYC in culture, here's a trivia question:

    After New York, which city has the most theaters per capita?













    Answer: Minneapolis

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  132. Oh, more live theater seat per capita trivia, for those who think DC is second to NYC as a cultural mecca.

    After NY, which city has the most theater seats in a single concentrated downtown district?














    Answer: Houston

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  133. Keith,

    Once you come to understand that "bigger" is not necessarily "better", then you will also understand why Chicago --- as nice as it is --- is not a "world class city".

    I'll give you a hint as to what helps define a world class city ... "it is home to people whose decisions affect everyone around the globe in some fashion or other". NYC?, yes. Washington?, yes. LA?, yes. Paris?, yes, London?, yes. Chicago?, no. As nice as Chicago is, its people do not make any decisions that directly affect the lives of people throughout the globe. Washington can drop a bomb at whim wherever it wants, or determine interest rates that set the stage for the world economy. LA can make entertainment that the whole world sees and is directly defined by. Paris can affect and influence politics in the anglophone countries by thrusting its weight in the EU and other non-anglophone strongholds, London can affect matters financially through the very large stake its citizens hold in the US stock market and its own financial markets, Chicago ... well, it's a great town, but it doesn't play on the world stage. It is an American icon. It sets out to get the "biggest" things such as the Sears tower... Not realizing, like you Keith, that bigger is not necessarily better. THAT is an attitude espoused by those who confuse quantity with quality ... and that is usally because they have never known quality.

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  134. Bryce,

    Why do you think it is that the bubbleheads have to turn to insults and general "nervous antics" whenever facts beyond a shadow of a doubt are presented that contradict their ferent hope that the US economy collapse so that they can buy property here at bargain basement prices?

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  135. Keith said...
    "After NY, which city has the most theater seats in a single concentrated downtown district?"

    and which city has the government supported Kennedy Center for the Performing arts?

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  136. Keith ... it's the same old issue of quality vs. quantity...

    Could that be what is holding you back from becoming the happy homeowner you really wish to be? Are you thinking to yourself? "give me a McMansion or give me nothing at all!"?

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  137. Lance said...,
    "no. As nice as Chicago is, its people do not make any decisions that directly affect the lives of people throughout the globe"

    Ever heard of the Chicago Board of Trade, or the Chicago Mercantile Exchange or other financial markets based in Chicago.

    Ever heard of Oprah Winfrey?

    Get a clue!

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  138. David said: "Ever heard of the Chicago Board of Trade, or the Chicago Mercantile Exchange or other financial markets based in Chicago.

    Ever heard of Oprah Winfrey?"

    Again, its decisions that affect people around the world that give an indication of world class status. Your examples affect people in the US ... not around the world.

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  139. Sorry David ... but your Oprah Winfrey example has me chuckling. Do you really think she is watched around the world? If she were, she'd be laughed at ... her shows are sooo sophmoric!

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  140. and I guess Cleveland qualifies because it has Jerry Springer?

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  141. "Washington can drop a bomb at whim wherever it wants, or determine interest rates that set the stage for the world economy."

    Yes, Lance, by virtue of merely living in DC, Ben Bernanke calls you up and asks if he should bump the rates up at the next FOMC meeting, and George Bush drops by to ask your advice on whether or not to nuke Pyongyang.

    Of course, DC housing prices were much lower 6 years ago. But I guess that was in the days before DC had the White House, lawyers, or lobbyists, right, Lance?

    And as David pointed out, Chicago has the Merc. Speaking of which, care to check those futures on DC housing prices, Lancy?

    Lance, the volume of your posts relative to the utter lack of facts, logic, or even (intentional) humor are the achetype of quality-free quantity.
    You have no clue about quality. Lancy. You are the archetype of the sad, bitter realtor who is desperate to validate their own shallow idiocy by getting some sap to buy their shoddy sales pitch. And it clearly drives you nuts that somewhere there are people who see through you. In fact, we're laughing at you.

    Lance Horsely = Willy Loman

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  142. And Lance, you may knock David for his Oprah Winfey statement, but didn't you claim LA was a world player because of their entertainment industry? Checkmate, Lancy.

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  143. Keith, your dumbness ... is only surpassed by your smug arrogance. I can accept arrogance from someone who has something to be arrongant about ... But you? You can't even see the difference between Hollywood's delivering a "Gone With the Wind" to the world and Oprah telling everyone what book to buy to make her rich. Yeah, you sure are one smart one, aren't guy!?! Don't go use all those smarts in one place. Did you say you were still a renter? And would be till prices dropped something like 50%? Yep, you're a real genius!

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  144. I think Lance bought last summer.

    Now, he spends his time convincing himself that it wasn't a mistake and playing ostrich with the ever-growing number of news stories that put DC at the top of the list when the crash occurs.

    And (for someone as cultured as Lance) he should recall the influential story that came out in that pathetic rag, the Economist, about the impending housing collapse...

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  145. Lance, if you think the CME and CBOT are not globally influential, you truly are a dimwit.

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  146. LAnce said...

    " Again, its decisions that affect people around the world that give an indication of world class status. Your examples affect people in the US ... not around the world."

    Again, Lance, clearly you have no idea that it is the finance power that dominates the politics in this country. That's why NYC cities and Chicago always is (and will always be) more world class that DC. Go check yourself: how many Fortune 500 companies are headquatered in DC? Does DC have any real influential trade market of anykind? I know for sure that world class cities such as Paris, Tokyo, or even Shanghai have all those key financial elements.

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  147. Lance is a paid real estate promoter -- he's admitted it on the DC housing blog. Check it out.

    ReplyDelete
  148. an interested observerJune 24, 2006 5:44 AM

    Lance said:

    2007- 600K
    2009- 700K
    2016- 1.2M

    Lance,
    I'm interested in your logic. Which assumption or assumptions are you making to arrive at these numbers?
    1) Rents will increase>10% annually over then next 10 yrs (would be required to support those prices at current P/E rates)
    2) Prices will continue to expand as a greater multiple of rents.

    One of these two must occur to support the prices you predict. There are also only 2 possible ways wo achieve option 1. Either:

    a) Annual median income in the region will grow at >10% annually
    or
    b) Housing expenditures (both prices and rents) will make up a greater portion of income in the future.

    I would be interested to hear which assumptions you are making with regard to the relationship between prices and rents, and between prices and incomes.

    Any others can chime in as well, though it seemed like most other poll respondants were within a fairly range of agreement (leaving me to wonder what all of the bickering is about)

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  149. interested observer,

    Why are you assuming my projections are based on rents? My calcs were not based on rents in the least ... In my previous posts, you might recall I said I believe that if any connection exists, it is that rents LAG selling prices and it is selling prices which ultimately drive rents since selling prices are one of the components of the cost of providing rental housing. Also, after something I read yesterday pertaining to creating a permanent class of renters (which I posted the link to), I'm starting to believe that the connection between prices and rental prices is even weaker than I first thought. Many rentals are just that ... Commodity-like housing that is fundamentally so different from ownership housing, that it's "price" bears no relation to selling prices. (I.e., it's "cost" is lower than for producing real estate that is sold to be bought ... This is evidenced in the complete difference of materials used in rental housing vs. sale housing. How many rentals do you find with granite countertops, steel refridgerators, quality hardwood floors, etc.? Housing built to be rented just costs a whole lot less to build to begin with ... so, even though cost is a factor in determing rental price ... the cost building/buying rentals is far less than building/buying a non-rental.)

    So, my calcs are straight forward. For 2007 prices go to the $600K I projected based on the still high increases we are experiencing here in the District. For example, on the DC Bubble blog an increase of 20%+ was listed for the District last year for single family houses ... which is in line with what I've observed from sales in my neighborhood. I don't know what is going on in Bethesda, but I'm going to assume it is similar to what is going on here. Then after that I assume that price increases drop off quickly based on increased interest rates. So, the 2009 number is based on an 8% per year increase ... and this 8% comes directly from what I hear the bubbleheads saying they believe interest rates will rise to. I beleive interest rates will be going up because we are entering an inflationary period aking to what happened after the costs of the Vietnam War started affecting the US economy in the late 70s. So, in an inflationary period, housing is always one of the leading indicators (i.e., goes "up" first) ... So, conservatively, I'm saying it is only going to go up by the "cost of money" (8%) which should reflect the "real" cost of money (traditionally something like 4% or 5%) plus inflation. After that, I think things settle down a bit and at least through 2012, prices only rise by something like 7% a year ... but then pick up because we'll have reached a point where new population in the area will have exhausted the housing that stopped being built sometime in 2006. The squeeze of more buyers (and not enough supply) will cause prices to start increasing to something like 10% annually. (I didn't save my spreadsheet, so I don't remember exactly what year I chose to initiate the increase in.)
    So, overall, believe it or not, my price increase projections are based on very conservative estimates ... AND on the very assumptions that the bubbleheads are stating as "facts". Maybe the difference is that I believe we are entering an inflationary period?

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  150. Lance,

    Based on my personal situation, I hope you are right! Rents are increasing. I have never had a vacancy and now look forward to some rent increases.

    BTW, any other landlords out there? I am looking to form a group for investors to chat.

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  151. an interested observerJune 24, 2006 10:36 AM

    It sounds like you choose #2- Prices will become a greater multiple of rents. In your argument, you seem to have the impression that there is some difference between rental properties and purchase properties. This is often not the case. Often the same property will be rented and owned over a period of time. People rent out their houses when leaving the area and re-inhabit them after returning.

    I don't disagree that we could see an inflationary period. Generally, this would indicate aditional interest rate hikes, which would dampen demand for housing. By the way, the bond market is currently betting against persistant rate increases, as evidenced by the inverted yield curve. This indicates that bond traders, usually a pretty savvy group, see interest rates 10yr from now not being much higher than they are now.
    So in your inflationary scenario, you seem to either see median incomes in the metro area increasing >8% annually and maintaining the new level of home price/median income-or if you think that affordability will return to historic norms, you imply median income growth rates of closer to 12% annually.
    Is this the scenario that you are predicting?

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  152. Va_investor,

    I recently re-rented my basement rental ... changing the carpet and repainting the walls. I upped the rent by $100/mo over what the last tenant had been paying to help cover the expenses that came to about $2,000. From one on-line ad I received some 40 phone calls and 25 emails ... despite my pulling the ad the same day because the place was rented within 3 hours of my posting the ad. I.e., in hindsite, I could have raised the rent far more than I did. I suspect the rental market is going to experience the same frenzy that the housing market experienced over the last 5 years. (And, of course, rents will skyrocket in response to the frenzy.)

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  153. interested observer,

    you're making a link to income growth that I don't believe is justifiable when you are talking about a specific geographical real estate market. as I once heard a poster on some other site say "we can't all live where we want to live ... I'd like to live in Potomac, but I can't .. " the point I'm trying to get across is that as this city and this metro area transforms itself into a world class city like NYC (i.e., as it "grows"), "what" will be affordable to "whom" will change. People will willingly move into smaller and smaller houses/condos at higher and higher prices near the core of the city as "the market" allocates the very limited real property available. If you are looking at a specific house, using your assumptions, it will appear that that house becomes unaffordable to the type of buyer currently in the house ... and so, the price must fall so that it again becomes affordable. Your assumption doesn't account for the fact that the market is dynamic. By that I mean that the type of person/family that is in the 3 bedroom rambler in Bethesda today is not the same person/family that lived in that house when it was built in the 1960s. Then it was "less than average income" family moving out to the 'burbs to take advantage of cheap land and have a house that probably wasn't affordable in some more desireable place like upper northwest in the District. Currently, that rambler is home to a family making above average incomes for this area ... but not at the level of say a family living in some place such as Massachussetts Heights in the District (where the Clitons bought 6 years ago.) 10 years from now? Who will be living in that 3 bedroom rambler? Maybe the people who would like to buy in Massachussetts Heights but can't afford to anymore ... they'll "settle" for Bethesda ... bringing their Lamborginis with them into a neighborhood that started life as a place for "cheap" housing for that less-well-off-than-average family in the 60s ... and, the less-than-well-off-than-average family in the '10s might be looking for cheap housing in the wilds of West Virginia ... or some towering building in Tysons.

    So, yes, there IS a link between incomes and the price of housing ... but there isn't a link between income and any particular standing house or condo.

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  154. And I want to add ... This disconnect may be where bubbleheads and housingheads are "seeing past" each other. Bubbleheads are correct that the market needs to "correct" itself to provide more affordable housing. AND housingheads are correct that longterm the value of the "current" inventory of houses will appreciate at a rate far in excess of inflation. And both are right! Bubbleheads will get the homes they can afford by buying in West Virginia or some new tower in Tysons, and housingheads will be secure in keeping their monthly payments stable in their appreciated houses in transformed neighborhoods.

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  155. of course, I'm well aware that Bill and Keith will come in and instead of addressing the issues, attack me ... because they don't want people looking at what I have to say. And why don't they want people looking at what I have to say? Simple ... They're counting on people holding on to the incredible notion that real estate values can plummet 50% (despite it NEVER having happened anywhere in this country at any period in its history.) So, why would they want people to believe the unbelievable? Simple ... while you all holding off from buying waiting for the promised windfall discount buying opportunity, they'll be out in the market looking for bargains ... swooping in on the 10% - 15% bargains. You know, I'm starting to wonder if they're not maybe real estate agents ... looking to get themselves some bargains that they'll resell later at a BIG profit ... to you!

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  156. "You can't even see the difference between Hollywood's delivering a "Gone With the Wind" to the world and Oprah telling everyone what book to buy to make her rich."

    So according to Lance, LA housing prices are high because of a 67 year-old movie.

    "it is that rents LAG selling prices and it is selling prices which ultimately drive rents since selling prices are one of the components of the cost of providing rental housing."

    And Lance doesn't even understand how housing prices are determined. The housing price is a function of rents and the inverse of interest rates, not the other way around. Lance is like a dotcommer saying Pet.com's earnings have to go up because their stock price is high.

    "So, the 2009 number is based on an 8% per year increase ... and this 8% comes directly from what I hear the bubbleheads saying they believe interest rates will rise to."

    Um, higher interest rates drive down housing prices. If you don't get that, then you really are a joke.

    "the point I'm trying to get across is that as this city and this metro area transforms itself into a world class city like NYC"

    And transformations like that drive both rents and prices, and fail to explain the rise in prices relative to rents. Therefore, as anybody with an ounce of sense recognizes, you're full of it.

    "I'm well aware that Bill and Keith will come in and instead of addressing the issues, attack me"

    Bill and I always destroy you on the issues, and you always throw a net tantrum in response. So now you have a marty complex to boot. You must be really, really scared.

    You really are Lance Horsely, aren't you? That's hilarious.

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  157. Yep ... I understand why Keith is a bubblehead. He can't see the forest for the trees. He can take each and every sentence out of context, analyse it based on his incorrect information, and then put it all back together so jumbled that even IF he had analyzed against correct assumptions, it is completely wrong. Damn, I'd hate to be driving down the same street as him. I'm sure he'd drive the wrong way down a one way street and STILL find a way to justify in his simple mind why HE was wrong and everyone else was right.

    Imbeciles like this guy are really funny if you think about it, aren't they?!

    Yep, he's a bubblehead!

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  158. Btw, higher interest rates drive down sales ... not prices. There's a difference that is well beyond your capabilities to understand Keith. And incidentally, since I guess you couldn't follow facts that took more than one sentence to explain, I will repeat that that 8% rate is comprised of 4 - 5 "real" appreciation and the rest inflation ... and so, that 8% represents a MINIMUM appreciation no where near what it has been over the last 5 years. But against that works against your lost hope that nominal prices will actually decrease (though they have NEVER done that before), so you just can't accept that even minimal appreciation will occur. But I feel like I am trying to explain this to an idiot ... 'cause you are an idiot.

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  159. Speculation and a glut of inventory drives down sales -- as in, when the price of a simple home is way beyond the average buyer's grasp, Lance.

    Try again. We're not convinced, Mr. real estate agent.

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  160. Bill, just because a simple home is way beyond YOUR grasp, does not mean it is beyond the average buyer's grasp. If it were, you wouldn't have had all those buyers out there putting multiple offers on homes. I.e., just because you are a loser, don't assume everyone else is. And again, I know how dense you are, I am NOT a real estate agent.

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  161. Keith to Lance: "Bill and I always destroy you on the issues, and you always throw a net tantrum in response."

    Lance's response: "Imbeciles like this guy are really funny if you think about it, aren't they?! Yep, he's a bubblehead!"

    Game, set, match.

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  162. That is a 135 unit building. 31 units are on the market. That is about 20%. Is 20% of the units on the market high? What is the average percentage of on sale units/total units?

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  163. johnny,

    good point ... especially considering that we know that speculators bought a lot of the units. if i were a bitter renter, i'd be high tailing my ass down there looking at these places and finding a desperate seller to sell me one at a price i could afford. i certainly wouldn't be sitting around on my duff waiting for them to drop by 50% in price. i'd be smart enough to realize that some other bitter renter would have already gone in and bought "my" unit long before it dropped by that much ... I'd also figure that those real estate agents/flippers, Bill and Keith, were already in there working their deals thinking I wouldn't show up to help bid up the price.

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  164. I just got off the phone with my landlord, he said he was serious about evicting me because my neighbors said my place smelled. I can't understand it, I clean the litter box every month ... and throw out the trash at the same time. There's no pleasing some people.

    I think I'm gonna look into the trailer park down the road. My mom and dad grew up in trailer parks ... so did my grand-pop ... 'Course my sister/aunt said my dad was also my grand-pop ... so, I guess I can't count him twice. We've got a "close" family. It has lead to high intelligents!

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  165. Hey Bill!

    My dad and mom grew up in a trailor park too! Then we moved to Silver Spring so that we'd have a basement for me to live in. I wonder if we are related?! Did your mom sleep with you too?

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  166. "2 condos in development nearby, interesting. Must be the builders are so far into it they can't bail out"

    I don't think the builders are worried. The cost to build these buildings today is actually cheaper than before. So even if they sell the condos at half price, they still make a big chunk of profit. That is the beauty of building new houses and buildings in major cities instead of some nowhere place.

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  167. Realtors now urging clients to offer incentives rather than lowering price. Hey-need to make that commission and counties need that property tax right. Just wait out the storm and go for the lower price.

    Also, DC radio on real estate programs going on hiatus due to the soft landing (best new spin in financial engineering)in real estate

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  168. Seven Corners!? The armpit of the Ffx. County/Arlington confluence. Next you're going to tell us that the Chili's restaurant on Route 7 there is in Zagat's guide. And again: DC has its own Home Depot; and if you look into it you will find it is Home Depot's most profitable outet.

    dc's black population is at 60%.

    ihatewhitie(yuppie); you hate many things, don't you? why do you live in a place you despise? please let us know when you've moved away.


    Thanks for helping to prove my point. A traditional liberal response to criticism is to accuse their opponent of being a "hater". How... predictable. Makes _Conservative Christians_ seem thoughtful and independent by comparison.

    I said I live near Seven Corners and indeed, I never had to "move away". I got the message, along with most middle class families that want a government that address their needs, not Karl Marx's, to stay away.

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  169. The real KeithJune 25, 2006 3:50 PM

    I love the fake post in my name, along with Lance's fake sophistication, because they show so perfectly the housinghead mentality that created this bubble.

    It's the old con game of fake elitism to sell snake oil. Unfortunately, Lance and his ilk have only conned themselves. The more they convince others and then throw their tantrums when the I point out their folly, the more they make my point for me. I mean, attacking me for pointing out that higher interest rates drive real housing prices down? Assuming 8% appreciation when the DC median home price decreased during the year? It's too perfect.

    Keep up the good work, housingheads. As the old saying goes, it's ugly up close, but so very beautiful from a distance.

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  170. Keith:

    "Assuming 8% appreciation when the DC median home price decreased during the year?"

    Where do you come up with these numbers? DC Bubble posted the numbers last month. Row houses in the District UP by 20%+ in the last year. Condos and free standing houses ALSO up though not by as much. Just keep wishing ... and denying reality. That'll make you a homeowner.

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  171. Inside the DC Bubble:

    Thursday, June 1
    DC HOUSING MARKET FLAT AND NOT SINKING

    During the three-month period ending March 31, DC housing prices jumped ... ok not jumped ... but rose 1.47 percent, according to the Office of Federal Housing Enterprise Oversight. Over a one-year period, prices were up a much sharper 20.84 percnet, said the OFHEO.

    Most striking though is the fact that houses have gone up about 5.2 times their value since 1980. This statistic illustrates the paradym shift that has happened here in DC over the last 25 years or so. As a point of comparison, over the same period homes in the state of Virginia went up only 3.5 times their value and homes in Maryland rose four times their value.

    In a nutshell, the paradigm shift argument states that capital disproportionally shifted to DC over the past few decades as the city revived and gentrified. Contrary to the title of this blog, the housing market in D.C. is not a bubble waiting to burst.

    posted by dcbubble at 2:12 PM

    www.ofheo.gov/media/pdf/1q06hpi.pdf

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  172. Here is my guess

    2007- 450K
    2009- 375K
    2016- 175K

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  173. Realtors keep talking about a soft landing. I hope all of those lockboxes are made of rubber. These people that got themselves into this situation really astound me. Now everyone is claiming they didn't understand the terms of their ARM mortgages even though we have all be yelling from every hilltop that this was going to happen. No pity from me, there are much more deserving people out there for my sympathy.

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  174. Very close by to this building is Samual Gompers park, better known as Cocaine Park when I lived in DC 7 years ago. It is not marked on the map, but you can see the green little triangle at 10th and Mass.

    Besides coke dealers, it was where you would go for trannie hookers. By 8pm there were usually 3 old trannies and a couple dealers. They sort of blended in with all the homeless.

    The whole neighborhood was a really trashy.

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  175. How soft a landing will it be? Just talked to a NOVA investor who was convinced until this week that he was up $300K on a rental condo he owned. After a lot of angst he listed the place at a few thousand over his cost, but in this market it's doubtful he'll get his asking price. He isn't calling this landing a soft one and his bleeding hasn't started yet.

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