Sunday, November 13

DC Housing Bubble: Popped

In August I wrote that the DC Housing bubble was popping. Over the weekend the press ran a couple of stories that there is indeed a problem in the housing market in areas including DC. Here are a couple of pics of places for sale around where we live. Notice that these three have "REDUCED" posted.

This house has been on the market for over six months. There have been a couple of "Open Sundays."

This is a new addition to the market. Almost as if it went on the market at a reduced price.

These are right on Rock Creek Park. Earlier in the year they were going for just under $600,000. The one with the "Price Reduced" is now going for $475,000 and it's the highly coveted corner unit, with greenhouse.

Walking around today there were lots of for sale signs. I had talked with one member of our IT staff. He mentioned that he has a couple of programmer friends that are now stuck with second properties that they are desperate to get rid of but so far have had no luck.

Lynn Edmonds and his wife, Sebnem, could barely wait to sign on the dotted line back in May when they committed themselves to pay $796,000 for a three-floor townhouse under construction in Alexandria's Cameron Station.

But since May, the sales prices for the development have fallen -- and units like the one the Edmonds bought are now being sold for $699,900. The Edmonds are facing the prospect of a $100,000 loss in value before they even walk through the front door. - Washington Post

This whole article is good and includes other sad stories. You can put us in the same catagory as this family:

But many would-be buyers have withdrawn from the real estate market, saying prices are just too high to consider making a purchase. Dan McGrath, an organizer for the Service Employees International Union, and his wife, Teresa, who works at the Environmental Protection Agency, have been married for four months, have a combined income of about $100,000 a year and would ordinarily be good candidates to become first-time homeowners. But the McGraths, who live in the District's Shaw neighborhood, have been shocked and repulsed by the prices for homes in the area, including the $400,000 price on one 800-square-foot studio they visited.

"We can't figure out who -- for the life of us -- would buy a place with two doors for $400,000," said McGrath, 28. "We want to think about a future but homeownership here is just not possible."


Housing Market Cooling, Data Say - Washington Post

DC Housing Bubble Popping - FFI

Long Island Housing Bubble Popping - FFI

1 comment:

Anonymous said...

The question I love asking Realtors is this: Why should housing be more expensive now than it was 4 years ago?

And then I usually say, "And don't tell me, 'Because it is'. Explain why it should be. How is a house *more* valuable?"

They usually hem, and haw. Then they try the old "You don't understand" line. And I get them to try to explain it to me:

I usually say, "Is it interest rates? Are they better now? Hmm...
Is it the economy? Is that better now? Hmmm....
Is it salaries? Are they better now? Hmm..
Is it unemployment? Is that lower now? Hmm...
Is it inventory? Are houses scarcer now? Hmm... "

Then they usually tell me that I "really just don't understand" and I point out that for someone who *does* understand, they sure can't explain it.