In 2008, the US lost 2.6 million jobs according to the Bureau of Labor Statistics. In the last two months of the year the job losses really accelerated (see chart below).
2008 Job Losses by Month. (NY Times Chart)
It is well known among economists that large job losses put stong downward pressure on home prices. As job losses continue to be high in the first quarter of 2009, expect job losses to play an increasingly large role in further reducing home prices.
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James - Out of curiosity, given that the DC area is still gaining jobs, what do you think will happen to home prices here?
ReplyDeleteActually, DC is not just gaining jobs, but gaining high priced jobs and losing low priced jobs:
ReplyDeletehttp://www.washingtonpost.com/wp-dyn/content/article/2009/01/06/AR2009010602935.html?sid=ST2009010700125&s_pos=
Thoughts James?
Sorry - these should be directed toward David as he was the poster. James - I would be curious to hear from you too.
ReplyDeleteBaltimore too please - prices in Baltimore especially around the BRAC areas are not dropping at all. Homes are still priced at 150-200% their 2002 selling prices...
ReplyDeleteI would call the BRAC area froth bubblets from the bursting bubble. When the big bubble burst, there was froth or bubblets. Some housing will retain value. The people who point out the crown molding and granite countertops they added as an option will not retain value. Places with picture rail, travertean tile or marble, and stone fences will not loose value.
ReplyDeleteWashington post article
ReplyDeleteWhat is your thoughts on this article?
Check the prices around Fort Belvoir. Doesn't seem like BRAC is sustaining those properties, even the ones that are less than 2 miles from both Ft. Belvoir and the Metro.
ReplyDeleteThat's because Rt 1 South is a slum and always has been. All full of section 8.
ReplyDeleteRumors are swirling about a Fed hiring freeze. That can't be a big positive for the area.
ReplyDelete"Rumors are swirling about a Fed hiring freeze. That can't be a big positive for the area."
ReplyDeleteI kinda doubt it. The playbook now is keynsian economics - just like it was in the 1930s. The rule is spend $$$ you have and then spend $$$ you dont have. No one else will hire, so the Govt will be the "hirer of last resort" in an effort to stimulate the economy.
TARP, shovel ready infrastructure projects, etc. These things just dont just administer themselves. You need a decent amount of manpower to do that.
In the 1930s hundreds of workers were hired to administer all of Roosevelts new deal policies - the same thing is likely to happen now. From the few sources I know of, they say the great depression in DC was like nothing had happened. With any luck, it will be like that again this time around.
For Fort Belvoir I'm talking about the area near the Franconia Springfield Metro up and down Beaulh Rd. right to Ft. Belvoir. Townhomes that were selling at $460K are now going for $300K. The area is hardly the slums.
ReplyDeleteI doubt there will be a hiring freeze. The fed. gov. is going to be one of the few places hiring/spending money. That is the entire point of the stimulus.
The Federal government is broke! That was not the case in the great depression. The Federal government is going lay off people like the States of MD and Va are going to do. Hold on to something solid when the storm hits.
ReplyDelete"The Federal government is broke!"
ReplyDeleteReally, things are bad, but there is no need to be so sensational. The government can print as much as it wants for the time being. Obviously there is the chance that the gov. can go broke, but right now the US has the strongest balance sheet in the world -- thus the run to US treasuries.
"Really, things are bad, but there is no need to be so sensational. The government can print as much as it wants for the time being. Obviously there is the chance that the gov. can go broke, but right now the US has the strongest balance sheet in the world -- thus the run to US treasuries."
ReplyDeleteYep - the govt was way more broke (relatively speaking) in the 1930's & 40s than it is now. With treasury yeilds being so low right now, the US Govt has a green light to print as much as it wants for the time being. The world is so much more broke than us, they are literally begging us to print til the inflation machine starts again.
If you were terrified by 2008, wait until you see most of 2009's numbers in regards to housing and employment.
ReplyDeleteI dont care about DC downtown, nor do I care about job losses. Im not worried about my job at all.
ReplyDeleteHowever, Im wondering if I should sign another year lease for rent or buy right now....I have a baby coming in May. Im thinking of buying in the north potomac/lakeland/kentland area. Anyone have any thoughts?
Anon - lets put it this way. I am the same bullish anon who is currently assailing Noz on the post below.
ReplyDeleteAs I see it, there is virtually no chance that prices will rise - and a better than average chance they will fall.
If you see a good place, wife loves it, and you can afford it. Go for it - dont look back. If you have any doubts, wait.
" Im thinking of buying in the north potomac"
ReplyDeleteThe fact that you use the term "north potomac" combined with the fact that you are considering living there betray the fact that you are a tool.
You probably think that attending a performance of "Mamma Mia" downtown and then dining at Bucca Di Beppa afterward means that you are cultured too, right?
hey tool belter....
ReplyDeletewhy do you attack me when asking a legitimate question. I'm not from this area you jerk. I don't think its prestigious or cultured, I just think its affordable. Now buzz of you gnat.
I know how everyone out there is feeling right now. But there are some good jobs available. Check out Jobnob.com for job openings all over the country, there's a lot out there, you just have to look.
ReplyDelete