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Sunday, June 21, 2009
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46 comments:
Current inventory numbers in Northern Virginia are inflated by REO's and short sales that are not available for purchase.
San Diego has a similar problem and has added a new code to their MLS status field...Contingent.
From the San Diego MLS...
To all our members that list and sell REOs and Short Sale properties, we’ve got a new status for you
to capitalize on - Contingent! This status is applied to listings that include any of the following conditions:
Offer accepted contingent on court approval
Offer accepted pending lender approval of Short Sale
Offer(s) submitted awaiting REO approval
Offer(s) submitted awaiting Short Sale approval
Offer accepted with _____ hour first right of refusal
This is a mandatory field and agents must comply.
This change was implemented on May 20th, 2009.
What effect did this have...
One month later, Actives stood at 10,376 with 3,466 Contingent, or more than 25% of listings.
However, it may actually be more than 25%. Here is a comment from a local market watcher:
Facts on the ground (as of this writing):
In the zip codes I work (92101, 92102, 92103, 92104, 92116) there are 903 properties active. There are 210 properties contingent. Upon reviewing these listings I would estimate that there are another 200 or so that should be listed as contingent. I suspect the fines that Sandicor is handing out will take care of this in the next month or two. That will mean a 20-40 percent minimum drop in standing inventory.
Current Inventory for Alexandria, Arlington, Fairfax, Loudoun, and PWC stands at 7889. If 30% of these properties aren't for sale, we're looking at only 5500 properties for sale.
Well, since none of our local housing pumpers have decided to kick the thread off today... I guess I will have to import one:
http://tinyurl.com/m5n9no
"Washington-area home-sellers enjoyed another good month in May. Sales of existing homes were up 21 percent over May 2008, and it was the best May we've seen since 2005.
Sales were much lower than they were in 2005. However, that was a different market, driven in part by irresponsible lending and eager investors. Those factors created artificial demand that drove home sales higher than they would have been otherwise.
Since 2005, the housing market has been painful to watch, as you know. However, things are looking up for the first time in a long while. Inventory is down and sales are up. Competition among buyers is increasing, and that is important because it is the force that will drive a rebound in home prices.
...
I have friends who are trying to buy a home in Northern Virginia while mortgage-interest rates are still low. Every time they find a home they like, three or four other offers come in for the same property.
...
For now, however, there are reasons for cautious optimism in the Washington region. "
All I can say is...wow... cluelessness on a nearly Lance level.
We WANT housing prices to "rebound?"
His friends are trying to buy "while mortgage rates are still low..." (ooh, scary!)
This guy wants to see his "friends" get out bid?
Most importantly, he is missing the fundamental truth of the housing bubble...
Prices were too high and needed to fall.
A housing bubble is not a good thing for anyone but speculators.
A serious RE investor looking for cash-flow positive rentals doesn't want a bubble.
New buyers don't want a bubble.
Companies and industries trying to attract talent to the area don't want a bubble.
The economy in general is harmed by a bubble. Bubbles do not generate new productivity, they are a miss-allocation of resources.
Oops, hard to beat the pumpers..
Leroy,
Do you think Chris Sicks even considers the internal contradiction in his statements, or that he's aware of it but hopes his excited readers won't notice it?
And aren't you going to talk more about your fabulous successes? :-) I know I, for one, will believe anything posted on "the internets."
Another story, not as bad as the first but that isn't saying much:
http://tinyurl.com/l9qt2r
"A tale of two markets divided by the conforming-loan limit
Mortgage rates are low and sales are booming for cheaper homes. But sales are at a virtual standstill for pricier homes because buyers can't get jumbo loans at acceptable rates."
Can't get acceptable rates, or can't get acceptable prices? Oops, I forgot it is always about the payment...
"Reporting from Washington -- Roused by a combination of low mortgage rates, sagging prices and government largesse, first-time buyers appear to have entered the housing market with a vengeance. According to the latest statistics from the National Assn. of Realtors, half of existing-home sales were to rookies who had never owned homes before."
At least the author recognizes that the recent uptick in activity is a product of government intervention...
"But at the top of the housing ladder, the move-up market remains at a virtual standstill, stymied by the inability of sellers to attract buyers who can obtain financing at rates close to what first-timers are paying."
Which is to say they are limited to financing at market rather than artificially-low government subsidized rates.
"Even if the sellers manage to hook a buyer who qualifies for a mortgage under today's super-strict underwriting guidelines, the sellers are probably going to have to invest much of their profit in their next home if they hope to move on."
Super-strict underwriting guidelines? Is that like where they ask you to actually prove you are a high salaried lawyer with no debt rather than just taking your word for it? (and OF COURSE you are going to have to use your "profit" to "move-on")
"Eighteen months ago, housing at all levels had a predictable supply of mortgage money. But when Fannie's and Freddie's accounting problems got the better of them, and most of Wall Street's investment bankers were unable to pay their bills, private investors pulled out of the mortgage market practically overnight."
This is my favorite. Fannie and Freddie's "accounting problems got the better of them?"
Accounting problems?
Is that what we are calling "losing tens of billions of dollars and becoming insolvent" these days?
Anyways, the article has some interesting information but nothing ground-breaking.
It really says something when the usually very "progressive" LA Times is complaining that the government isn't helping the rich out enough and wants to see government subsidized rates for buyers above $750,000.
"And aren't you going to talk more about your fabulous successes? :-) I know I, for one, will believe anything posted on "the internets.""
Since you mention it,
My farm had a good year last year, despite the less than ideal weather.
High corn prices are like striking oil for me.
But what should I do with the extra money? Despite my obvious expertise in financial matters, I am confounded by whether I should leave this money in a checking account where I could access it from an ATM, or perhaps put it in a savings account.
I am of course an expert stock trader and handily beat the market last year by shifting to bonds just before the peak and back into the market just after the bottom. So I suppose I could keep that up.
Does anyone have any advice to offer on what to do with my corn profits?
Considering the continuing ethanol boom in corn prices this isn't a problem that is likely to go away for me. Every year it seems like I keep getting these checks in the mail and I am forced to find places to put the money. It can be stressful.
"improve the economy by destroying wealth"
Excellent point.
The bucks for clunker thing irked me because my beater Corolla (30+ MPG) doesn't qualify. You gave me another reason to be grumpy. Maybe I'll keep driving it.
"REO's and short sales that are not available for purchase."
I'm not sure what that means in the grand scheme.
Based on what I saw in the 1990's, I expect prices have bottomed and will hold at this level for several years.
VA_Invest or that lawyer-investor who lives in Lyon Village, Bill(? haven't heard from him for a while), are out there. Lurking, watching, ready to pull the trigger.
My opinion - This is an opportunity of a decade. Back in the early 1990's, I attended a Resolution Trust Corporation (RTC) auction, as I recall the ticket to get in was a cashiers check for $5K.
Today, there's no such barrier and everything is listed on sites like Frankly.
Makes it easy to scan the market. We also have blogs like this one with the local buzz.
CRT, Contrarian, Sara, and others give me much to consider.
Your comments have value. It helps me think things through and make my decisions.
Thank you.
Thanks for the best laugh I've had all weekend, Leroy!
Since you wisely asked me (and less wisely asked others too), my suggestion would be that you bury your excess cash near the corn. One single dollar bill per stalk should suffice. You will then have not only a bumper crop of summer corn due to the excellent fertilizer value, but also, in January, small $ bills (I think they call them "green shoots") will begin to appear on the stalks, even through snow. If you are in Europe, plant the local currency and that is what will sprout. Of course, you will then have a problem with more excess cash next year, but I never worry past tomorrow myself. You could always send the extra cash to me.
My target retirement destination is Ar, the Fort Smith area. Homes are smaller in Ar., most being under 2000 sg ft, on a slab, no basement or attic space and generally 3 bd, 1 1/2 or 2 1/2 baths...DUH! They must be crazy to expect people to pay those prices! Snort..a new home there on a slab and a 1/4 of an acre is similiar in price to an older PW 4bd, 3 1/2 ba on an acre.
Leroy said...."High corn prices are like striking oil for me."
All I can say is...wow... cluelessness on a nearly Lance level.
Leroy, you WANT corn prices to "rebound?"
You want your "friends" to get out bid for a bushel of corn?
Most importantly, Leroy is missing the fundamental truth of the corn bubble...
Prices were too high and needed to fall.
A corn bubble is not a good thing for anyone but speculators.
A serious farm/corn investor is looking for cash-flow positive acreage.
New buyers don't want a bubble in corn.
Companies and industries trying to attract talent to the area don't want a bubble in corn.
The economy in general is harmed by a corn bubble. Corn bubbles do not generate new productivity, they are a miss-allocation of resources.
Obviously Leroy wants a bubble in corn -- because he/she owns some - but does not want one in housing -- because he/she doesn't own some.
Leroy is just talking his book...
Riddle me this, how do you know you missed the bottom in your housing target area search?
Answer..20111..we burned thru the bottom fer sure in Jan 09..I didn't say PWC. Altho I think Woodbridge is probably the only reason we wouldn't see RE values rise this year.
1.Interest rates rising.
2.Multiple offers on homes - privately owned as well as foreclosures.
3.The average days on the market steadily lowering.
4.Short sale homes actually selling.
Leroy,
I agree with your points:
A housing bubble is not a good thing for anyone but speculators. . . . A serious RE investor looking for cash-flow positive rentals doesn't want a bubble. . . . New buyers don't want a bubble. . . . Companies and industries trying to attract talent to the area don't want a bubble. . . .The economy in general is harmed by a bubble.
The local governments, the entire Congress, the Federal Reserve, and the new President have been feverishly intent on their goal to pump up housing prices.
Robert, I agree that you will continue to prosper in your government contracting work. But there will be unrest in the rest of the country with double-digit unemployment. I do feel very sorry for those people.
Robert - Leroy is making a joke. Its actually pretty funny if you get it.
CRT -
Actually anyone reading this blog realizes that I was the one making the joke. Which is funnier, some bitter renter angry that home prices are running away from him, or corn bubbles?
Seattle also cracking down on REO's and short sale listings...
Seattle Blog
I know this is not local info., but I see a trend that may eventually hit the MRIS causing inventory to plummet overnight. Nobody should be surprised.
Robert said: "Actually anyone reading this blog realizes that I was the one making the joke. Which is funnier, some bitter renter angry that home prices are running away from him, or corn bubbles?"
Since you asked, Leroy's joke was funny. Your "joke" was not.
Possibly the most important post on the relation of unemployment and house prices yet by
Calculated Risk:
Take a look at the graph, but the bottom line is:
It appears real house prices declined until the unemployment rate peaked, and then remained stagnant for a few years. Following the late 1980s housing bubble, the Case-Shiller index suggests prices declined for a few years after the unemployment rate peaked.
Although there are periods when there is no relationship between the unemployment rate and house prices, this graph suggests that house prices will not bottom (in real terms) until the unemployment rate peaks (or later, especially since the current bubble dwarfs those previous housing bubbles). And it is unlikely that the unemployment rate will peak for some time ...
I'll post some similar graphs for a few Metropolitan Statistical Areas (MSA) later, comparing local house prices with the local unemployment rate.
Robert, Leroy,
I thought both jokes were pitch perfect.
But then, as I've said before, I am easily amused.
anielarke, bottom in what? House prices, housing starts, monthly payments? I still contend that there's no way to tell if this was the bottom until we see how much of it is seasonality, which we won't be able to tell until mid-winter.
Cara,
It is intuitive that there would be a relationship between unemployment and house prices. Of note, the Washington DC metropolitan area has the lowest unemployment rate of any of the major areas. And the last few ticks in the unemployment rate have been lower, although I do expect that to turn a little higher in the coming months.
Still, as I've mentioned before, it's the employment base that is more of a factor on house prices than unemployment.
Someone suggested an interesting example the other day where you had a stay at home mother and the husband was laid off. Then they would both start looking for work and the first to find work would take the job and the other stay at home.
So, when the husband was working and the wife was staying at home -- not looking for work -- neither would be unemployed, but when the husband is laid off and they both start looking for work, they are both counted as unemployed. Not sure how prevalent this is, but you can see how this would artificially boost the unemployment rate.
Robert,
I'm hoping Bill (CR) will use DC as one of the examples since we had such a nice long-flat period after the last boom/bust.
But, the "uptick" you claim was (a) statistically insignificant, (b) less than last March-April, and (c) SEASONAL!
The seasonally adjusted data have unemployment flat and high by the standards of this region.
Part of how we were able to inflate a bubble as large as we did was due to our ridiculously low unemployment. Which is also what leaves us* so vulnerable when it rises.
* or rather particular home-owners.
Besides, your cited example displays exactly how accurate a predictor of distress unemployment is. If you're making the point that it's not 1 to 1, and may even be non-linear, point taken.
That's also true in CR's graphs. The unemployment is way more spiky than the housing prices are, and there are many points where unemployment peaked without any effect on house prices. It's more of, how does unemployment interact with the contraction of a housing bubble? And the striking part is prices staying flat, or even continuing to decline in real values after unemployment has long since subsided.
arkey,
sorry I misread your handle. Yes, I think the bottom is clearly in in your neck of the woods. First to crash, first to recover, unlike C-S's general prediction. But I think that's due to the effect of speculators which until this bubble hadn't been as large of a percentage of transactions, such that this bubble is behaving a bit differently (less sticky, faster price discovery and subsequent potential for recovery).
"Obviously Leroy wants a bubble in corn -- because he/she owns some - but does not want one in housing -- because he/she doesn't own some."
Once again I can't tell if you are trying to be funny or not.
To clarify for everyone else though...
I do actually own some farm land that grows primarily corn, but that hasn't stopped me from recognizing the ethanol thing as the stupidity it is.
I mean they are burning food and trying to pass it off as green energy.
The same goes for the stupid "lets scrap functional vehicles to promote the production of very slightly more efficient vehicles."
Combine that with efforts to re-inflate housing bubbles as a road to economic "recovery" and it is clear to me that our government is in need of some very basic courses on economics.
I think with a few exceptions (or perhaps there is a silent majority as many of the boosters comment the most), there is a lot of denial on this blog with how bad things are. We are on track to have higher unemployment than the early 80s recession. This is likely to be the worst recession in the region (and nationally) in 30 years.
I hope to be wrong, but I think come December if anyone looks back at many of the comments this late spring/early summer they will be shocked with how naive some were.
I think by December we will likely be at 12-13% unemployment in DC and 8-9% in VA and MD (statewide with corresponding increases for DC suburbs in VA and MD).
The federal government is not going to get us out of this mess any time soon or perhaps ever meaning the private sector will need to come back which will take time. There just are not enough jobs being created by the federal government and those that are being created are being filled by needlessly byzantine, slow rules that stymie any recovery effort. Maybe if Obama and Congress finally pass one of those laws that would modernize federal hiring.
There also is a lot of pain in the retail sector even in the DC area. And remember, even if a national chain has strong sales here they are going to fall apart if sales are sluggish elsewhere. Be ready for some more companies to go out of business after another sluggish Christmas season (like Circuit City did early this year).
Again, I hope to be wrong, but all signs point to a lot more pain.
Robert:
Here is a different perspective on the San Diego market,
tbw,
I am not arguing that we are in a deep, painful recession. But,the statements that we will whether it much better than most are very valid.
I don't think it will be protracted; but do believe it will (and has) altered every type of lending (both res. and commercial). Things will eventually get back on track. How long? I don't know, I'd guess 2 or 3 years. It will be a decade or more before memories of this loose lending fade.
That said, Tyson's is going to be unrecognizable in a decade or two. I regret selling the properties I owned there.
zerodown,
I'm not bullish on San Diego real estate, but I do think the dynamics of the whole short sale/REO's contingency problem was addressed in that market and the results I believe would be similar here.
I do not see anything in San Diego that rivals the fundamentals of Washington D.C. going forward. Sorry if I did not make that clear.
I'm bullish on this region only, although if I had to pick another market it would be Silicon Valley, but a distant #2.
TBW,
Most of what you said I agree with. Retailers failing, yes. Unemployment going to 8-9-10%, yes. Government spending not the total solution, yes.
But I would argue the tone of this blog is overwhelmingly negative.
I think the problem that is perplexing you and the rest of the bears on this blog is what is happening to inventory and home prices in the region. They seem disconnected from the statistics. I have admitted and will admit again, I'm puzzled with what is going on. It has nothing to do with my thesis of increased federal spending, because too little of that has even begun.
You tell me? Has everyone gone insane?
Are investors starting to balk at the price increases on shorts and reo's or is the season simply over?
I've noticed listing lasting longer. Have the banks stopped accepting the 0/0 days on the market?
Are people waiting for the much anticipated wave of foreclosres? Are they coming? Were the recent multiple offers a "head fake"?
What effect will the possible 8K experiation have on "regular" buyers?
Any thoughts?
If one chooses to look only at the DC metro area's previous bubble, one would conclude that the timing of the end of the declines and start of the stagnation period is unrelated to the timing of the peak unemployment. I.e. that continued increases in unemployment for the area can't by themselves pull house prices down.
This I think would be a myopic view. Looking instead to those cities that had the largest 80's bubbles, and hence the ones closest in magnitude to the current housing bubble may be a more realisitic test-case:
LA, NY San Fran, Boston, and Seattle
Here we see all possible behaviors for the post-bubble price level. In LA the continues decline eventually brought prices back down to what they were before the 80's boom.
In NY and Boston, the commencement of the stagnation period essentially coincided with peak unemployment, and the price levels maintained a higher plateau than the had been the case before the bubble. This to me seems like the most likely scenario for the DC area now. Why? Because some of the change was in fundamentals of jobs/income/desirability, AND the bubble itself encouraged a building and rebuilding boom that raised the quality of the housing stock (crappy McMansion, shoddy construction cases aside).
But in no case other than Seattle or Dallas was unemployment and any house price movements totally disconnected. This can be attributed to vast changes in their underlying economic drivers and migration. I claim that increased Federal spending, or Federal government jobs is not a drastic shift that would make employment and housing detach from one another, and thus, the previous large housing bubbles, including our own, are the most likely models for the current case.
Now, this bubble was so huge, that the crash could be worse. And it is possible that like LA we may revert to the wonderfully affordable city that we once were (long before I got here). I find this to be a bit overly "optimistic" given that only LA, and to some extent SF, have done that before, and we do have better underlying fundamental economic drivers than those two.
va_investor,
I think the season is beginning to start to wind down. I'm still seeing well-priced shorts going under contract in a week. I only ever saw two 0/0 deals though. Each local market will have slightly staggered timing, but I do think the spring rush is beginning to sputter out. I doubt it's the mortgage rates those are back down, I doubt it's people expecting more REOs in the pipeline, (bird in the hand is worth 100 in the invisible bush). I think it's just seasonal. And list prices going back up over cash-flow positive after a few bidding wars successfully broke out, making buying unattractive.
Do landlords have a season for buying too? Is it really that much harder to rent it out if you don't take ownership before August? We're not a university town... I wouldn't think landlords would be strongly seasonal, what do you think Va_investor?
From Jim the Realtor the 5 stages of buyer's grief:
ArtElectric commented,
There is always somebody with more reach than you have.
Not just more reach, but more frustration too, because they are further along in the hunt.
The Five Stages of Buyers’ Grief:
Denial - Buyers are adamant about not overpaying.
“The only house I’m buying is the one I can steal from the bank” is a common theme. Buyers read daily about how bad the economy is, how bad the real estate market is, and figure this might be a good opportunity. They begin their search.
Anger - With every house on the internet, most buyers take matters into their own hands.
They surf the web in search of that steal, thinking that there will be plenty laying around. How hard can it be to find a deal? But then they realize that a cursory overview of the inventory produces junkers and over-priced turkeys. Anger begins to set in when they realize it isn’t going to be as easy as they thought.
Bargaining - Early on every buyer wants to make low offers - we’re stealing one, right?
But the good listings always seems to have competing offers, with 95% of the buyers chasing 5-10% of the inventory. This is where ArtElectric’s thought comes in - there are other buyers who are further along in the five stages of buyers’ grief - and they outbid you. Virtually every buyer will lose out on 1-3 offers before succeeding.
Depression - It’s hard enough just to find a good deal, to then lose out on one or more is depressing.
Many give up for a while, deciding that it’s not meant to be, they’ll wait until the market comes down more, wait until the economy gets worse, banks unleash the shadow inventory, etc. But there’s a haunting feeling that it won’t get easier.
Acceptance - Buyers loosen up on their demand to steal one, and shift to acquisition mode.
By now most just want to get it over with, and accept that the successful search and purchase of a home is more time- and energy-consuming than they thought. The next one they find that suits their needs, they step up a little sooner, and a little higher than everyone else, and finally land one.
Today’s buyers don’t like these feelings, and many will wait it out, hoping it’ll get easier, later. But with the government backstopping the markets and banks being very deliberate about processing their short sales and REOs, it could be a long wait.
Will the banks start unloading? I think they could double or triple their output of REOs in good areas and sell every one of them today.
We’ll see if the demand holds up - the fourth quarter of 2009 should be very telling.
I think investors (I know this one is) are pissed at Banks raising prices so quickly. Perhaps it's justified and they were giving away the store in Nov. - March.
Quite obviously, we have different parameters than "normal" buyers. But, when I check tax records and see the same unit closed in January, Feb or March for 30% less - I'm either kicking myself or blaming irrational exurberance.
I expect the multiple contracts will dry up with a lack of over-bidding( now,and) in late summer/early fall. We'll see. Don't take that to the bank. Perhaps we had a windfall and unique opportunity for buyers over the winter? Who knows?
I'd be very reluctant to compare our region to some of those you mentioned. This area has always been expensive (my personal experience dating to 1981).
Va_investor,
"I'd be very reluctant to compare our region to some of those you mentioned. This area has always been expensive (my personal experience dating to 1981). "
I'm glad I'm not drinking coffee. It would have been all over my keyboard. You've obviously never lived in Boston, NY, LA or San Francisco if you're objection to the comparison is that we're more expensive. Rents in all of those places are like something I can't describe in polite company, and house prices are even worse.
The point of the comparison was that the current bubble is so much larger than the last bubble that it's descent could have secularly different consequences than our 80's bubble. The examples of other cities with more massive 80's bubbles shows a range of behaviors that might happen this time here.
The reason to look is because obviously any relationship between national unemployment and national house prices is going to be the aggregation of what happens in different markets with different employment conditions. Thus is inherently tenuous. These other markets ARE relevant as examples of what can happen to house prices as a result of employment conditions whether these were the cheapest cities in the country or the most expensive. That part is basically immaterial because it should mostly scale with income. However, these do happen to be relatively good matches in income and house price.
Cara: All of my rental properties are condos in Alexandria and Arlington and I have one duplex under contract which I am going to renovate and rent. From my perspective landlords buy when prices are low (I bought houses at the end of 2008, sold them in early 2009 and bought condos in early 2009). Those new condos were easily rented. I have a condo which I just received a 30 day notice on because the couple renting it bought a house in Arlington. I am going to raise the rent by $100, and it will still be slightly under market so it should rent quickly too. I find in Arl and Alex, the market is year round. Most of the people I rent to are in the military, work for the government or government contractors. For the studios, a few are law or graduate students and they tend to rent in August. I have had some of them pay rent for July in order to secure the place for August. The second strongest season is Dec/Jan when people seem to be transferring to the area. I have some National Science Foundation tenants who are on one or two year grants and they often come into town in January. Most are academics, so I think that is timed to the academic semester system. The people I know who are landlords for houses tend to have government jobs which bring them back and forth from overseas to the area, and they rent the houses when they are out of country. They have not had any trouble renting them to people who are coming into the area from other parts of the country where they can't sell their houses. They then have to rent in this area. Of course, there are many long time landlords who have owned houses for a long time, but I think the market is about the same for them in Arlington and Alexandria. McLean tends to get more embassy personnel at all levels, so it could be more tied to the summer market. I suspect outside the beltway is also more seasonal.
anielarke,
Thanks. There might be a bit of seasonality for landlords out in Burke, because the major reason to live there is the schools and bike-trails, lakes, which means a lot of renters will have kids, but I do still think it's a minor effect for landlords.
Which is why it's kind of wierd that there's been a feedin frenzy amongst the cash-flow positive THs in Burke lately. I think it's just that a lot of investors expected there to be more REO inventory than there has been and are rushing in so as not to miss the boat. And this is just happening to coincide with spring/summer (though there could be a minor modulation from the foreclosure moratoria depressing the REO inventory).
"I'd be very reluctant to compare our region to some of those you mentioned. This area has always been expensive (my personal experience dating to 1981)."
Expensive compared to what exactly?
The stupid myth that DC has "always been expensive" is one of the stranger things to come out of the bubble to me.
DC has historically been a relatively cheap city by any reasonable standards. More along the lines of Dallas, Houston, Atlanta, etc than Chicago, LA, San Fran, NY, Boston etc.
Then, once prices doubled, people started saying retarded things like "oh, well DC has always been expensive," as if that was somehow an explanation for prices doubling.
Leroy,
Thanks for backhandedly calling me a retard. I moved here from upstate NY, with a brief stint in Cincinnati, so YES DC is and has always been EXPENSIVE as hell.
p.s. I have a relative that morons used to refer to as "retarded".
va_investor,
Since when are upstate NY or cinncinatti,comparable to NYC, San Francisco or Boston?
DC has always been expensive compared to not living in a city at all, or living in a city with high unemployment, or living somewhere with little job-growth. That's not the same thing.
It's like me and tall people. Just because anything over 5'11" is all just "tall" to me doesn't mean that 7 feet isn't a heck of a lot taller than 6 feet.
NAHB affordability index for 2000, after the bubble had already started here,
Metropolitan Area (CMSA or MSA) Component (PMSA) Housing Afforabiility Index
Atlanta 74.9
Austin 57.5
Boston 51.3
Cincinnati 76.7
Los Angeles Los Angeles 40.2
New York New York 42.1
San Francisco Oakland 32.1
San Francisco San Francisco 10.3
San Francisco San Jose 18.3
Washington-Baltimore Washington 77.1
I've complained about this metric before, but as a rough measure I think you get the picture.
Oh I am willing to allow for the possibility that otherwise intelligent people can still say retarded things.
Yes, DC is more expensive than upstate NY or Cincinnati. Nobody ever claimed DC was the cheapest place on earth. In a meaningful comparison to other major cities DC has historically been relatively cheap. That was what the discussion was about.
You can't just make any dumb statement and then follow it up with, "my personal experience dating to 1981," as if that was some kind of proof.
"p.s. I have a relative that morons used to refer to as "retarded"."
You do know what the word "moron" means right?
You can hardly claim to be offended by the word "retarded" while using the word "moron" yourself.
From Wikipedia:
""Moron" was coined in 1910 by psychologist Henry H. Goddard[3] from the Greek word moros, which meant "dull" (as opposed to "sharp"), and used to describe a person with a mental age located between 8 and 12 on the Binet scale.[4] It was once applied to people with an IQ of 51-70, being superior in one degree to "imbecile" (IQ of 26-50) and superior in two degrees to "idiot" (IQ of 0-25)."
TBW said... Those gov't jobs are going to be too late to offset the pain that is going to come in 2009-10. I think with a few exceptions (or perhaps there is a silent majority as many of the boosters comment the most), there is a lot of denial on this blog with how bad things are. We are on track to have higher unemployment than the early 80s recession. This is likely to be the worst recession in the region (and nationally) in 30 years. I hope to be wrong, but I think come December if anyone looks back at many of the comments this late spring/early summer they will be shocked with how naive some were. I think by December we will likely be at 12-13% unemployment in DC and 8-9% in VA and MD (statewide with corresponding increases for DC suburbs in VA and MD). The federal government is not going to get us out of this mess any time soon or perhaps ever meaning the private sector will need to come back which will take time. There just are not enough jobs being created by the federal government and those that are being created are being filled by needlessly byzantine, slow rules that stymie any recovery effort. Maybe if Obama and Congress finally pass one of those laws that would modernize federal hiring. There also is a lot of pain in the retail sector even in the DC area. And remember, even if a national chain has strong sales here they are going to fall apart if sales are sluggish elsewhere. Be ready for some more companies to go out of business after another sluggish Christmas season (like Circuit City did early this year). Again, I hope to be wrong, but all signs point to a lot more pain.
I can find article after article, quote after quote from experts, that suggest WDC is going to ROAR. Show me a source that says WDC is going to shrink.
National pain, sure. Regional pain, nope. Home prices have bottomed.
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