Sunday, November 26, 2006

Housing For Sale in Adams Morgan Neighborhood in DC

Adams Morgan is trendry gentrified neighborhood in Washington, DC. In the 2009 zipcode where this block is located as of October 2006 there were 392 units for sale. In December 2005, there were just 254 units available for sale. The number of days on the market for housing sold is up 258% compared with October 2005. The median sales price is flat year over year and the number of units sold is down 10%. Source: MRIS

75 comments:

  1. So we're looking at a ~50% increase in units with dropping sales... ouch. I hope they don't have ARMs (or weren't congressional staff moving on to new jobs).

    Keep up the good posts,
    Neil

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  2. REMINDER: this is just the begining.

    REMINDER: if you have to use an ARM IO or some other toxic mortgage than YOU CAN NOT AFFORD THE HOME

    REMINDER: last time RE did this the result was a 40% devaluation.

    REMINDER: this will end very badly for so many

    REMINDER: the RE industry loved all the press coverage on the way up but now seem to think the reality the MSM reports on is the "cause" of the correction.

    REMINDER: the home builder CEO's have been saying everything is okay while selling company stock like mad.

    REMINDER: if rents rise big time (like many use as a reason to buy) than that will be a negative for housing, rent is 40% of the CPI that's how homes doubling was hidden from the inflation numbers cause during the same time rents went down. higher rents = higher interest rates.


    i'm gonna go out on a limb and say that by this time next year foreclosures will be up over 100% YOY.

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  3. "The median sales price is flat year over year "

    Got that, Real Bob?

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  4. Have you graphed the $/SF price trend? Try doing a 18-month graph and see what it is doing.

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  5. anon, you obviously must be a realtor or own a home in 20009. The whole point of the previous argument was this.

    lance said that homes in dc proper wont go down, other bloggers will back me up on this.

    Now he is saying that 20009 wont go down.

    Well its flat, and the rest of dc proper is down 12%, do you really think 20009 is an island and that a 12% haircut wont find its way into that zip?

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  6. Hogwash! How can there be an increase in the number of homes for sale? Did they make more land?

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  7. THREADKILLA said:
    "i'm gonna go out on a limb and say that by this time next year foreclosures will be up over 100% YOY."

    And I'm gonna agree with you 100%. It's sorta like that old song "nothing from nothing is nothing." When prices were rising so quickly that the ink hadn't had time to dry, it really became nearly impossible for a property to foreclose. Now that we are heading back toward normal times, the difference between then (i.e., "nothing" ... or close to nothing ... foreclosing) and now, will be 100% ... or more! Ditto, with David's stats on number of properties on the market. Last year at this time it was almost impossible to find anything that was staying on the market longer than a few days ... before being sold. While David's stats show that the market has normalized somewhat in 20009 and is giving buyers a more balanced chance at buying ... It's still far from being a normal market. It's still a seller's market in that zip. I truely hope that changes and becomes a more balanced market for the sake of everyone. It just isn't there yet. Far from it...

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  8. Yes, it is kind of amusing that a lot of the bubble doubters point to the fact that prices are down (nominally) 5-15% as if that means the bubble story was disproven. Most bubble believers have always said that there would be a period of "floating in the air" before real values started to fall. Right now, we are seeing sellers desperately holding on, so inventory increases dramatically year over year, while prices fall moderately. In 2007 and 2008, sellers will begin to break more, as they realize that the ARM crowd is dwindling and the only ones left to buy are people who are completely price-oriented. By 2009-2010, we will start to see more serious real price falls, although what happens in nominal terms is in Ben Bernanke's hands.

    Personally, I am not a fan of Adams Morgan. It's nice to visit, but not that close to a metro stop, and more suited for a younger crowd that is going to be hitting the bars more often than I do these days, me being an old codger. I doubt it is priced for that younger crowd, though.

    Also, from my own personal anecdotal experience, young (25-40) professionals who buy in DC tend to be buying in the more marginal neighborhoods, while nonetheless paying prices that would have gotten them a Georgetown property a few years ago. I think Adams Morgan is probably off limits (even with an ARM) to most young professionals, who seem to be moving more to U Street and Columbia Heights. Unfortunately, like I said, I think they are paying 2000 Georgetown prices to do so.

    A Redskins fan

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  9. "anon, you obviously must be a realtor or own a home in 20009. The whole point of the previous argument was this.

    lance said that homes in dc proper wont go down, other bloggers will back me up on this.

    Now he is saying that 20009 wont go down.

    Well its flat, and the rest of dc proper is down 12%, do you really think 20009 is an island and that a 12% haircut wont find its way into that zip? "

    No, the point is that you said Lance had lost 12% of his property's value last year. When asked to back that up, you couldn't. Drop it if you want any credibility back.

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  10. Hey redskins fan -

    I'm 29 and make $175k/year. Just like 20,000, 40,000, 60,000 more of me in the DC area.

    I just wanted you to know that.

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  11. "While David's stats show that the market has normalized somewhat in 20009 and is giving buyers a more balanced chance at buying ... It's still far from being a normal market. It's still a seller's market in that zip. "

    Heh... I bet when you get to the top of that first big hill on a rollercoaster you like to yell out:

    "Don't worry everyone! Things have just slowed down for a moment, soon we will begin to go up again!"

    Seriously lance... RE markets move slowly. It was just last year that you were going on and on about how DC proper hadn't seen any price declines and that that just showed that the District was exempt from the declines the suburbs saw first... where did that argument go?

    -Leroy

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  12. If you want to see a suprising number go to foreclosures.com and look at Loudoun County, VA. In August it was 12 - It is now 60+ and climbing at approx. 5 a week.

    This is a suburb of DC and I think that realestate will crumble from the outer rings in to the city is starting to have a little validity.

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  13. The worst of the housing bust is over, economists said by nearly 2-to-1 in the latest WSJ.com economic forecasting survey.

    www.realestatejournal.com/buysell/markettrends/20061122-izzo.html

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  14. Redskins said:
    "Unfortunately, like I said, I think they are paying 2000 Georgetown prices to do so."

    Sorry Redskins, but it's almost 2007 ... not 2000! Not only has time moved on in 7 years (higher salaries, growing population in metro area, 9/11 dollars flooding the metro area), BUT --- in case you hadn't notice --- places like Adams-Morgan are vastly different today than they were 7 years ago. I can understand your nostalgia. But your nostalgia won't help you become a homeowner. Living in the present always leads to better decision making than living in the past. I hope you had a nice Thanksgiving.

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  15. Hey Redskins fan,

    I'm 28 and I make $65,000 a year. Just like, EVERYONE ELSE I KNOW MY AGE!

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  16. I own a home in Adams Morgan, probably only a block or two from the photo. I can tell you that houses stay on the market a long time and some get taken off the market after they don't sell. Housing is way overpriced in A-M as well as all of the area. Price reduced signs everywhere, and I'm willing to bet we're only cresting the hill...

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  17. "I'm 29 and make $175k/year. Just like 20,000, 40,000, 60,000 more of me in the DC area."

    Every anonymous poster on the internet is very, very rich. Very interesting.

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  18. peronally, I don't think adams morgan is good at all. Its a better investment then loudon county though. I have been there many times, it looks very slum-like. Lots of trash, people hanging out on corners. I like the lion heads on the bridges though and the nearness to rock creek park. Crime is pretty high also. It is a fun place for single people but I would absolutely not raise a family there. But, to each their own.

    But to set the record straight, I am going to ask lance to go out on a limb. You made the statement that dc proper would not go down, it did. At least you are owning up to the statement.

    Are you now saying that 20009 will not see any decrease in price YOY?

    I am saying that 20009 will drop in price such that it is at least less then the 2004 median price.

    Make a prediction.

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  19. Thredkilla said REMINDER: last time RE did this the result was a 40% devaluation.

    Yep... But last time people actually had a down payment! The last three years of this market shouldn't have happened. We never revert to the mean, it always undershoots...

    Since foreclosures are going up exponentially, 100% growth is optimistic. In most of the country, foreclosures are doubling every 90 to 100 days. Now, trees don't grow to the shy, but we could be seeing 500% to 800% higher foreclosures in a year. :( I hope that doesn't happen, but that's the current trend... :(

    To think, significant numbers of ARM's don't start resetting until end of 1Q 2007. 2Q 2007 will be interesting.

    Neil

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  20. its also not surprising to see so many homes for sale in that area because of the sweeping changes in the congress that were the result of the NOvember elections. many of the staffers of losing members (and lots of lobby and other hilltypes) live in this area, and have lost their jobs, and will return to home districts -- this happens in dc neighborhoods at each election.

    houses (not condos) in the district are somewhat insulated from the market because of the job turnover and the fact that there are no more homes being built in these areas.

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  21. Lance said...
    The worst of the housing bust is over, economists said by nearly 2-to-1 in the latest WSJ.com economic forecasting survey. But they still predict that the average selling price of a house will fall next year.

    http://www.realestatejournal.com/buysell/markettrends/20061122-izzo.html

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  22. Lance said...
    “Living in the present always leads to better decision making than living in the past. I hope you had a nice Thanksgiving.”

    Presently, foreclosures are rising, DOM are increasing, sales are down, YOY median prices are down 10% (again) and we have another Trillion in ARM re-sets in 07. How was your Thanksgiving?

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  23. Hey redskins fan -

    "I'm 29 and make $175k/year. Just like 20,000, 40,000, 60,000 more of me in the DC area.

    I just wanted you to know that."

    Wow...another over-paid corporate K Street lawyer whose only real contribution is the zeros to his corporate client's profit sheet.

    DC corporate lawyers are extremely useless to society. I thought you should know that.

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  24. Leroy, I never said that. I dare you to find that in the archives. You still don't understand that what I said was that longterm (a) it is much cheaper to buy than to rent and (b) there are aspects to homeownership where dollars just don't play into the equation. I also did say that DC value growth in value is undeniably valid and "real" growth in that we aren't looking at the same city today as we were looking at 5 or 10 years ago. And Adams Morgan is a great example. It's now where Georgetown was back in the late 80s. Ten years ago it was where Georgetown was back in the 70s ... If you happen to remember when there were nothing but old warehouses south of M Street (with news stores and ratty-tatty stores lining M Street itself) and not a chain to be seen anywhere up or down Wisconsin (or M Street). The only "decent" places were a few nice middle of the road restaurants on Wisconsin and lots of college (and other) bars on both Wisc. and M. I.e., It was where Adams Morgan was back in the late 80s (and maybe early 90s) prior to the gentrification it has experienced. DC's change in value is undeniably real.

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  25. I think this says it all ...

    On Black Friday, Fewer People, More Spent

    www.washingtonpost.com/wp-dyn/content/article/2006/11/26/AR2006112600436.html

    What is true for Christmas gifts is true for real estate. Current prices are a reflection of the economy and not vice-versa.

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  26. "Hey redskins fan -
    I'm 29 and make $175k/year. Just like 20,000, 40,000, 60,000 more of me in the DC area.
    I just wanted you to know that."

    Good for you. I prefer data to individual anecdotes though. There are some people who make that much in the DC area. They are a tiny portion of the overall population, though, even in the richest counties. The median income in DC is around 50K. In Montgomery, it's around 90K. So your income is certainly not typical. Even people making 175K or more should keep that in mind before you pay for a house, though. You don't want to pay $600K for something that is worth $250K, even if you can afford to.

    Lance-

    I hope you had a nice Thanksgiving also. Nostalgia is underrated, and keeps me going when it comes to pro football. However, my analysis of housing is not based on nostalgia. You are correct that is almost 2007. After that, I disagree with you.

    The major difference in the DC area real estate market 2005/6 vs. 2000, in my humble opinion, is the presence of many ARM loan users. Apparently, they are still in the market. I'd like to see these guys leave the market, and see the market adjust to their leaving, before I buy. You are right that things are different. I know the homicide rate is much higher in Prince George's County, and I believe that the crime rate is higher in Montgomery also, and I believe in DC as well (not sure). Nonetheless, housing prices are up in all those areas. I also sense that traffic is even worse.

    However, because I am feeling generous this week, I will grant you that the current job market and increased population should raise prices slightly. I'll even be willing to give you a 5% annual rise over 2000 prices. So I'll be willing to look at a house that cost $200K in 2000 if it costs $268K this year. Heck, it's the holiday season. Let's round it up to $300K. I'll even be willing to look at a property that has 50% nominal appreciation since 2000.

    Ooops... don't see any. Oh well... I'm doing fine renting, so continued success to all.

    A Redskins fan

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  27. Lance Lance Lance... you are going to have to learn not to challenge people to look up your earlier statements. It does NOTHING to enhance your credibility to say the least:

    Lets take a look at what you had to say in June...

    "An increase in rates may cool some real estate markets, but it will hardly make a dent in the District's. The District's increase in values is backed by real fundamental changes that are evident to anyone who has lived in this area over a period of time. Unlike places like Bethesda or Alexandria, the District is a very different place now than it was as recently as 5 years ago ... It is a drastically different place than it was 15 years ago. The real estate there has gone up in value like real estate everywhere, but not nearly enough to reflect it's real value and where it is headed. All one needs do is look at places like Manhattan to see how undervalued the District still is." -Lance June 11 2006

    "I can only speak for what I am seeing the in District, but I really don't think house prices here will decline in the least. Condos probably will go down a bit considering all the new ones currently being built, but even that longterm will do alright. The fundamentals are that there is a lot more money coming into DC (and the DC area) due in part to the tremendous growth of the IT industry here partly owing to 9/11."- Lance June 11 2006

    "I can understand the bubbleheads' desire to "wait it out" ... but the reports I posted show clearly what makes the "bubble" in this metro area so different from the "bubbles" in other metro areas. " Lance June 11 2006

    All these quotes and more can be found in your local bubblemeter archives!

    http://www.blogger.com/comment.g?blogID=13164186&postID=115000482297362381&isPopup=true


    -Leroy

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  28. David,

    DC made the CNN list of "where not to buy."

    http://money.cnn.com/popups/2006/biz2/newrules_wherenot/6.html


    Projected drop in 2007 of -6.3%.

    It should suprise no one that California had a bunch of locations on the list. Many with projected declines of greater than 10%. Cest la vie.

    Neil

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  29. "Good for you. I prefer data to individual anecdotes though. There are some people who make that much in the DC area. They are a tiny portion of the overall population, though, even in the richest counties. The median income in DC is around 50K. "

    Yeah, right. not too many lawyers here! I can't believe that any of you think you have any credibility when you say things like this.

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  30. leroy rocks! Thanks for looking up the priceless quotes that again prove lance is wrong.

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  31. Hey Lance, I guess Leroy needs to post those quotes on his fridge huh?

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  32. Leroy,

    I stand by my quotes. And they are being proven to be correct. (A) I have always spoken in the context of LONGTERM ... a concept which Bubbleheads seem incapable of understanding ... but which should be uppermost in the mind of anyone making a HOME purchase vs. speculating on real estate like a flipper. As Va_Investor has said, if you don't plan on being in your property at least 5 years, then don't consider buying. Rent instead. Longterm prices have not dropped and they will not drop in the District or even in the surrounding area in general. (B) As the quote you found says, I did predict that condo prices would go down for a short period (12 - 18 months) and that prices on houses in the District would flatten out during that period before resuming normal growth trends. And guess what, that is EXACTLY what is happening! Yes, post my quotes on your fridge ... it might help you (and Robert) to finally get it ... and to quit reading in your own biases. Simply put ... there won't be a bubble bursting ... because there is no bubble. Unless you think it possible for everyone to suddenly sell their homes and move to the woods to live, it is impossible to be in a situation where homes become valueless ... as is a hallmark of market bubbles ...

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  33. "Yeah, right. not too many lawyers here! I can't believe that any of you think you have any credibility when you say things like this."

    I have gone and looked up the most recent Census data about a zillion times for posts on this website. I am very busy and tired right now, so I won't do it again. But look it up yourself... www.census.gov the 2004 ACS survey, for Washington D.C. If I remember correctly, the median household income was under $50,000. They also break it out so that you can see what percent of people are making over $100K and $150K also, so please don't theorize that the median is 50K but 40% are making more than 150K or something. That isn't true.

    There are a lot of lawyers who work in DC. They don't all live in DC. But even the suburbs are not as wealthy as some people here pretend. Median household income in the wealthiest suburbs in the area is around 100K, IIRC. But check it yourself.

    This is not to say DC isn't a wealthy area- there is obviously a lot of wealth here compared to the rest of the country. But as regards housing, the median house prices are WAY out of whack with median household incomes.

    For me personally, DC area housing looks like a terrible investment.

    A Redskins fan

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  34. "Longterm prices have not dropped and they will not drop in the District or even in the surrounding area in general."

    Huh? LOL

    Let me guess... any and all drops that take place over the next couple years just aren't "long term" drops so long as sometime before the sun burns out prices rise again right? Makes perfect sense...

    "Simply put ... there won't be a bubble bursting ... because there is no bubble. "

    Simply put ... the bubble is bursting right before your eyes but you are too stubborn to admit it. I don't think you ever will, and you know what? That will be fine with me because it just doesn't matter what you think.

    A buyer who waited a year to make their purchase will have saved a LOT of money whether you ever admit your mistake or not.

    A 12% drop in median prices YoY is a LARGE drop and the market hasn't hit bottom yet. I want to hear your explanation for how buying just before a 20% drop is a good idea.

    Sure, if you buy something you can afford then you won't go bankrupt or anything, but that doesn't make it a smart decision.

    -Leroy

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  35. Redskins said:
    " If I remember correctly, the median household income was under $50,000. They also break it out so that you can see what percent of people are making over $100K and $150K also, so please don't theorize that the median is 50K but 40% are making more than 150K or something. That isn't true."

    First off, the median includes the college student at GU or GW or AU or elsewhere who is earning nothing (and being supported by his parents from another state) as well as the retiree living off of his/her savings. It also does NOT include the high paid lobbyist who owns a swank apartment in the city but has his home in either the suburbs or some other locale. Looking at $50K as $50K is unreasonable. Looking at it in comparison to the median income in other parts of the country IS reasonable ... and the DC area cities and counties have among the highest median incomes anywhere in the country ... yet our housing prices don't come close to the levels of housing prices in places like the northeast or the west coast. Doesn't that tell you something about how UNDERvalued (i.e., underpriced) our real estate is? WE've got more money to spend on real estate than a lot of other metro areas ... but we pay a lot less. Secondly, we all know that the rich are getting richer and the poor are getting poorer. Even the Christmas sales this year ("Less people spending more money") bear this out ... So, it's very possible that the median is 50K but 40% are making more than 150K ...

    Redskins, you might be able to make a case for real estate being overvalued in some parts of the country ... but this isn't one of them.

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  36. Lance said... Unless you think it possible for everyone to suddenly sell their homes and move to the woods to live, it is impossible to be in a situation where homes become valueless ... as is a hallmark of market bubbles ...

    Unless you think it is possible for all the companies that make up the US stock market to wink out of existance at once-- taking all of their physical assets with them-- stocks becoming valueless is hardly a 'hallmark' of market bubbles.
    Furthermore, since the Great Depression there have been limits to the amount of leverage that can be used to buy stock, so the potential loss is limited to the actual decline in the stock. Housing, by contrast has become more and more highly leveraged during the run up of this bubble. Housing only has to decline a little for today's buyers, qualified on the basis of 'teaser' rates, to face foreclosure when those rates reset.

    This has all been pointed out before-- as has the fact that homes are made-- not bought. Buying a house doesn't mean having a home, anymore than buying the trappings of a 'lifestyle' means you have bought a life.

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  37. Redskins, et al.,

    I agree that prices in Adams Morgan are out of whack for what you get -- singles bars, rats, crime, a hike to Metro, and some decent restaurants. Maybe Lance is right, and Adams Morgan is following in the footsteps of Georgetown, but you'd think property values would rise after the area improves, not before. "Improvement" being in the eyes of the beholder: Pottery Barn? Horrors!

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  38. "I have gone and looked up the most recent Census data about a zillion times for posts on this website. I am very busy and tired right now, so I won't do it again. But look it up yourself... www.census.gov the 2004 ACS survey, for Washington D.C. If I remember correctly, the median household income was under $50,000."

    And, as has been pointed out to you many times, the median in DC is meaningless because it includes a lot of very poor people in vast areas of the city that are irrelevant to the price of homes in, say, 20009.

    You just don't hear information that doesn't support your ridiculous theory.

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  39. "Wow...another over-paid corporate K Street lawyer whose only real contribution is the zeros to his corporate client's profit sheet.

    DC corporate lawyers are extremely useless to society. I thought you should know that."

    I'm sorry, I didn't catch that - one of my pro bono clients called while I was counting my money. What were you talking about again?

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  40. "And, as has been pointed out to you many times, the median in DC is meaningless because it includes a lot of very poor people in vast areas of the city that are irrelevant to the price of homes in, say, 20009."

    In 1999 and 2000, before all this bubble business started, there were plenty of rich lawyers in DC and its environs. There was also plenty of suitable housing for them.

    There has been some net job growth since 2000. Not as much as some people here act, but there has been very good job growth. But there has also been plenty of growth in housing for those people.

    Now, the areas considered suitable for well off lawyers have dramatically expanded. U St., Columbia Heights, Shaw, and many other parts of the city are supposedly gentrifying, and command prices that only someone who is making much more than the city median income, or even the city's bottom 80% income, can afford.

    Look, it's very clear what has happened in DC and the surrounding suburbs, and even the farmland a little further out. House prices have skyrocketed far more than rents, and to ratios that I think are historically way out of whack with area median incomes... in any area (DC, Montgomery, PG... whatever).

    If there were no bubble, we would see all these lawyers buying with 20% down, traditional mortgages. Or just paying cash. Instead, we see in 2005 that more than half of DC home buyers, and one-third of DC area home buyers, used ARM / non-traditional loans. That is what is going on- silly, non-traditional loans are putting a lot of people into more expensive mortgages than they can reasonably afford. Others- feeling the peer pressure but remaining fiscally sensible- are buying what they can afford: substandard housing with preposterous prices in marginal neighborhoods.

    You can sit around and deny what the Census data tell you if you want. I guess that's the "who you gonna believe? Me or your lying eyes?" school of housing analysis. Best of luck with that. I fear you will need it.

    A Redskins fan

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  41. Ok, I understand that there are a lot of wealthy lawyers in the DC area. I will also admit there are a lot of foreign born people making minimum wage and less on multiple jobs purchasing homes with grouping of funds from many family/friends to live in the house. I can only speak specifically to my situation and try to understand it. I have owned two homes one in SC 2000-2003 and one in Falls Church 2003-2005. I am 31 and have a personal income in the $60's (5% increase per year, thankfully). Even with the boom from 03-05, giving me a 20% down payment on a $450K home, I cannot adequately afford the Monthly payments on such a home without exotic financing IO Arm etc. This is not appealing to me.

    Can the market really expect normal (IT Professional) college graduates to forgoe their future savings to purchase a a house? A house a retirement portfolio does not make. Yes, we could have my wife work full time (teacher) and put our kids 0-3 yrs old in daycare, but what kind of life is that?

    This is the real dilemna that average middle class people are facing. So if you have a $175K salary, God bless you. If you make less than $50K, I feel for you. But regardless, don't hide from the true facts that the average family in this NOVA / DC area simply cannot 'keep up with the Jones'' and the 'priced out forever' theory does not work beause there are too many people in their homes right now that will not be able to afford it in 3 months, 12 months, or 2 years. They leave the market as owners, someone has to fill their shoes. Not enough $175K salaries to fill that void.

    Therefore, Prices must come down, or you will not have any teachers, civil servants, or even mid career IT professionals to service your communities.

    The salaries are not there.

    My 2 cents.

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  42. Lance said:
    "So, it's very possible that the median is 50K but 40% are making more than 150K"

    You're confusing median for mean here.

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  43. Anonymous said...
    “And, as has been pointed out to you many times, the median in DC is meaningless because it includes a lot of very poor people in vast areas of the city that are irrelevant to the price of homes in, say, 20009.”

    Yes, it does include a lot of poor people, and poor people don’t buy $500K+ houses. Furthermore, why buy a $500K+ house in infamous “20009” when the same house can be had for less, one block away. For $200K less, hell, I’d walk two extra blocks to the (insert price “justifying” attribute here).

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  44. "If there were no bubble, we would see all these lawyers buying with 20% down, traditional mortgages. Or just paying cash. Instead, we see in 2005 that more than half of DC home buyers, and one-third of DC area home buyers, used ARM / non-traditional loans. That is what is going on- silly, non-traditional loans are putting a lot of people into more expensive mortgages than they can reasonably afford. Others- feeling the peer pressure but remaining fiscally sensible- are buying what they can afford: substandard housing with preposterous prices in marginal neighborhoods."


    Right, I forgot - only renters save money by selecting a housing option that requires lower payments. All home owners are stretched to the limit and don't invest a nickel.

    Redskins fan, you have no credibility.

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  45. "Yes, it does include a lot of poor people, and poor people don’t buy $500K+ houses. Furthermore, why buy a $500K+ house in infamous “20009” when the same house can be had for less, one block away. For $200K less, hell, I’d walk two extra blocks to the (insert price “justifying” attribute here)."

    What houses are you talking about?

    Post an example of one. I guarantee it's in a much worse area that what we're talking about here, and it's a mile away, not 2 blocks away, from (insert price “justifying” attribute here).".

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  46. LOL at "credibility." Where did you get that one? I have to say I have been called a lot of the names in the book, but I hadn't heard that one before. I am not a politician.

    You attack a strawman argument that I didn't make. Anyway, I have posted here consistently for a year or so, and people can judge my views against what has actually happened.

    If you are making 175K, you can afford a 600K house, and still make some investments. But what do you get for that 600K? Do you get a crappy 80 year old house in a neighborhood that was a crack den ten years ago, and is still close to where those crack dealers live? Or a townhouse on a busy suburban street with an hour commute to the city? A townhouse that you need to do extensive repairs to? A condo? A frickin' condo for 600K? Is that worth it? I hope your other investments do well.

    Personally, I compare two things to the price of a house: area incomes and area rents. On both counts, I find DC area housing prices- in BOTH the city and the suburbs- to be way too high. So I am renting, and it has left me enough on the side to hire an image consultant if I ever get worried about my "credibility." LOL.

    A Redskins fan

    ReplyDelete
  47. Redskins fan,

    Way to change the subject. The question wasn't where *you* would like to live. They question was weather or not people in DC can afford these homes. And you've just conceded that they can, regardless of whether or not they're places you'd care to live.

    I'm happy for you if you enjoy renting a house in Silver Spring. Good for you. Me, I'd much rather live in a poor poor 600k condo (which is a 2br luxury condo in a central location) or 80 year old was a crack den 10 years ago (read - townhouse on the Hill). And I'm not lecturing you.

    ReplyDelete
  48. What? I did not concede that most buyers in DC could afford the houses they bought. I don't believe that. If most buyers in DC could afford they houses they bought, I do not believe we would have seen 53% of 2005 DC homebuyers use ARM loans.

    I was using the 175K income lawyer buying a 600K property since someone claimed to be making 175K. My example was purely speculative, meant to show how even sensible purchases by rich lawyers don't buy much in DC, and not meant as "this is what is happening on a wide scale."

    There are two differences between my example and reality:

    1) the 175K lawyer might not be buying 600K condos; more likely, he is buying million dollar properties with ARM loans... I say that's a mistake also.

    2) (MOST IMPORTANT)... as the Census data show, there are NOT enough 175K lawyers in the DC area to support local prices, in my opinion.

    A Redskins fan

    ReplyDelete
  49. So, basically, everybody does stupid, risky things except for you -- and especially rich people. And there are not many lawyers making money in Washington, DC. That's your story?

    Ok...

    ReplyDelete
  50. Anonymous said...
    “What houses are you talking about?”

    Houses that poor people can not afford

    “Post an example of one.”

    Any $500K+ home will do.

    “I guarantee it's in a much worse area that what we're talking about here, and it's a mile away, not 2 blocks away, from (insert price “justifying” attribute here).”


    So, we’ve gone all the way down to:

    “Home prices will not drop”:

    “In DC”
    “In DC proper”
    “In my zip code”
    “Within a mile from here”

    ReplyDelete
  51. Of course there aren't enough people making the kind of money to support the prices we see in the district. Not by a mile. DC is a relatively small city with an economy that is almost entirely dependent on federal spending. DC is not New York or even Chicago in terms of economic vitality and diversity, and real estate/general economic trends will eventually bear out this fact. It doesn't take a rocket scientist to figure out that prices will correct sharply, but the financial armageddon that so many of you cheerfully predict will not occur...

    Prices will correct significantly over the next few years in and around DC, more so than in other areas of the country, but there will be no blood in the streets, a reversion to the mean, etc etc etc.

    What genuinely amazes me about so much of the DC-related banter I read on this blog revolves around people who apparently want to live in DC (presumably because they like it), but apparently don't make enough money to live there, but at the same time make fun of/dislike people who already live there. So some of you guys at once desperately want to live there, yet so despise so many people who already live there because they're lawyers, leaches, government suckups, etc?

    I don't get it. Is there something I'm missing here?

    ReplyDelete
  52. anon said:
    "So, basically, everybody does stupid, risky things except for you -- and especially rich people."

    And they are rich because they don't make good decisions ... and Redskins is poor because he does make good decisions! It's a whole new paradigm out there! Wow!

    ReplyDelete
  53. LOL at the counter-arguments. I have never said anything about my income or wealth on this blog, so none of you know. I haven't said whether I am a "typical DC lawyer" making 175K while I post constantly on here, or a Saudi prince, or a bum under a bridge posting from a stolen laptop.

    Having said that, I remember mid-1999. Investment advisor clowns were on CNBC touting stupid, worthless stocks. I probably have less money than I imagine some of them have. But I knew stocks were a bad deal then, and I sold all of mine. A year later, stocks were down. Now those advisors are smart to get paid for advice or brokering or whatever they do, but their stock predictions were still wrong. Rich does not mean "expert on everything."

    And by the way, numerous confirmed rich guys, such as (if I remember correctly) Warren Buffet and John Templeton, have said that they thought US housing was in a bubble. So even if rich guys do have special insight, and even if you think I am not rich (and I am not saying if I am or not), there are still rich guys who believe as I do.

    But of course I never said all rich people in DC were making mistakes. The ones who sell properties they already owned or rent while they live here are quite smart. The 29 year old in his first job out of law school, working in the office 12 hours a day, and making 125K, who then buys an 80-year old townhouse fixer upper in a marginal neighborhood for $700K.... will probably not be joining the ranks of the rich anytime soon, even though his income is substantially above the DC area median.

    A Redskins fan

    ReplyDelete
  54. Redskins said:
    "The 29 year old in his first job out of law school, working in the office 12 hours a day, and making 125K, who then buys an 80-year old townhouse fixer upper in a marginal neighborhood for $700K.... will probably not be joining the ranks of the rich anytime soon, even though his income is substantially above the DC area median."

    What you don't get is that he already has ... While you sit back in your Silver Spring apartment ... waiting ... putting aside your extra pennies from your rent "savings" ... and waiting ... driving out to your local Silver Diner for an exciting "night out on the town" ... and waiting ... and waiting ... You'll be rich someday ... and living in the city ... just like he is!

    ReplyDelete
  55. "The 29 year old in his first job out of law school, working in the office 12 hours a day, and making 125K, who then buys an 80-year old townhouse fixer upper in a marginal neighborhood for $700K.... will probably not be joining the ranks of the rich anytime soon, even though his income is substantially above the DC area median."

    I guess that's because $700k will get you a townhouse that doesn't need much work on a nice block on cap hill. What you described is worth, and can be had for, 550.

    By the way, starting salary is now $135k or $145k, depending on the firm. $125k is so 2001. And 29 is a little old for a first year associate. I'm in my 4th year, my second job out of law school, and I make $175k plus bonus. As I mentioned, there are tens of thousands like me very happy to buy the homes you disparage and who would never in a million years want to live where you live, rent, own, squat, or burglarize.

    Fortunately, I dont have to settle for a $700k home. My wife makes almost as much as I do.

    HTH

    ReplyDelete
  56. Anonymous said...
    “As I mentioned, there are tens of thousands like me very happy to buy the homes you disparage and who would never in a million years want to live where you live, rent, own, squat, or burglarize.”

    Where are these tens of thousands to eat up all this inventory?

    “Fortunately, I dont have to settle for a $700k home. My wife makes almost as much as I do.”

    Yes, what a travesty for one to settle for a $700K home, I just don’t know what one would do!

    Where do you summa?

    ReplyDelete
  57. Lance-

    You haven't lived 'til you've had the grilled cheese and then the coconut cream pie there. But I think it's an independent, long-time place, not the chain Silver Diner. Besides the independent diner, there's also the indepedent (or local only) places like Mi Rancho, Sergio's, Crisfield's, and many others.

    But when I want the city, I can hop on the train and be there in minutes. As I get older, I want less and less of cities, though. Silver Spring is close enough.

    But city mouse/country mouse stuff has nothing to do with whether someone overpays for a property or not. There are plenty of buyers getting taken for a ride out in ex-urbs and rural areas as well.

    HTH-

    Congrats on making a lot more household income than most people in DC, or the entire DC area. It goes farther if you don't overspend on a house.

    A Redskins fan

    ReplyDelete
  58. "Where are these tens of thousands to eat up all this inventory?"

    Inventory is collapsing faster than you can say "pwn3d."

    ReplyDelete
  59. "Congrats on making a lot more household income than most people in DC, or the entire DC area. It goes farther if you don't overspend on a house."

    Well, since we're both pretty much in entry level jobs, we are quite satisfied with what our 300k+ combined income can afford us.

    ReplyDelete
  60. "Congrats on making a lot more household income than most people in DC, or the entire DC area. It goes farther if you don't overspend on a house.

    A Redskins fan "

    I'm just happy that I have more than you, Redskins fan. You seem like a real jerk and don't deserve to be happy. I'm glad you're not.

    ReplyDelete
  61. Anonymous said...
    “Inventory is collapsing faster than you can say "pwn3d."

    Thanks for that insight anon. Where did you find such hard data?

    ReplyDelete
  62. Here's the data:

    http://www.housingtracker.net/old_housingtracker/location/DC/Washington/

    ReplyDelete
  63. Inventory always goes down at this time of year. Right now, according to the old housing tracker site, it is more than 30% higher than last year.

    http://www.housingtracker.net/old_housingtracker/location/DC/Washington/

    Some collapse.

    A Redskins fan

    ReplyDelete
  64. "Inventory always goes down at this time of year. Right now, according to the old housing tracker site, it is more than 30% higher than last year.

    http://www.housingtracker.net/old_housingtracker/location/DC/Washington/

    Some collapse.

    A Redskins fan "

    30% higher (and falling) than the hottest market ever. Some bursting bubble.

    ReplyDelete
  65. "30% higher (and falling) than the hottest market ever. Some bursting bubble."

    Anon, up to date MRIS numbers are out. You may want to update your percentages.

    ReplyDelete
  66. "Anon, up to date MRIS numbers are out. You may want to update your percentages. "

    Your calculations are different? I don't understand - you seem unsure if there is or isn't a seasonal fluctuation in inventory. Post some numbers if you have them. If not, don't make them up.

    ReplyDelete
  67. Anonymous said...
    “Your calculations are different? I don't understand - you seem unsure if there is or isn't a seasonal fluctuation in inventory. Post some numbers if you have them. If not, don't make them up.”

    http://www.mris.com/reports

    ReplyDelete
  68. "Anonymous said...
    “Your calculations are different? I don't understand - you seem unsure if there is or isn't a seasonal fluctuation in inventory. Post some numbers if you have them. If not, don't make them up.”

    http://www.mris.com/reports "

    So, you refuse to post numbers? How embarrassing for the bubbleheads.

    ReplyDelete
  69. Anonymous said...
    “So, you refuse to post numbers? How embarrassing for the bubbleheads.”

    I was hoping that you’d post some numbers and maybe show me something I missed. But please, don’t let me get in the way of your nanny nanny boo boo, pants on fire routine.

    ReplyDelete
  70. "I was hoping that you’d post some numbers and maybe show me something I missed. But please, don’t let me get in the way of your nanny nanny boo boo, pants on fire routine. "

    I did post numbers. You said they were wrong, but refused to post any contrary numbers.

    ReplyDelete
  71. Anonymous said...
    “I did post numbers. You said they were wrong, but refused to post any contrary numbers.”

    Sorry anon, looking back through the post, I don’t see the numbers you posted. Just a statement that “inventory is falling”. Please re-post those numbers.

    ReplyDelete
  72. "Sorry anon, looking back through the post, I don’t see the numbers you posted. Just a statement that “inventory is falling”. Please re-post those numbers. "

    Does "30%" ring a bell, you flipping imbecile? I can't believe I'm even responding to you, you troll.

    ReplyDelete
  73. Anonymous said...
    “Does "30%" ring a bell, you flipping imbecile? I can't believe I'm even responding to you, you troll.”

    Nov 06-3166
    Oct 06-3488

    http://www.mris.com/reports/stats

    So, by your account that’s 30%. Hummm, imbecile, nice choice of words there anon. I can’t believe I tried to have a rational conversation with you.

    ReplyDelete