Housing Prices

any new thoughts on the market? it has clearly sloooooowed way down. does anyone have any advice or stories about surviving a prior housing crash and needing to sell?

 

Prices are starting to drop signifcantly. There are several resales I have been tracking that have dropped almost 80k. Too many greedy investors in the area making dumb decisions to try to resell in under a yr.

 

The recent price drops are just the beginning. The big boys (builders) are already designing new product line that will be much cheaper and as nice or nicer as their current product line. You will see the start of this new much cheaper product line soon as they will sneak it in.

The job lay offs are coming next as the Government starts cutting back to keep costs in line because of the recent hurricanes the un-winnable war and especially the high energy costs just wait to the heating bills this winter that is going to put a shock into the economy.

I dare say we are going to see the largest recession this country has ever seen for the next 5 to 6 years and possibly more. Their is going to be massive layoffs in the DC area from the Government cutbacks both private and public.

What where realtors saying are few months ago just a correction and leveling of prices I don't think so, I say we will see 30 to 40 percent drops from the current prices over the next few years.

Remember the price crashes in the early and mid nineties and the bankrupt builders all over the place. Yes that was the dc area. Our government cannot afford it's present level of employment and programs.

High energy costs will put the final nails in the coffin. People that don't help cut back on saving energy such as less driving trips and keeping the thermostat a few degrees up or down are just helping to contribute their own demise.

I have lived through five recessions 3 in Texas in the eighties 1 in southern California in the nineties saw the one here in the nineties and now the national one soon to hit us hard for the next 5 to 6 years at least. I still have major connections to Southern California Texas and The DC area and my building buddies say we are in for one of the worst ever crashes. Of course you won’t hear that in the news or from your realtor. This is what the builders are saying in private, just as some Military officials have told me in private the Iraq war is a no win situation as presently being waged. Just how much fuel and energy does the Bush entourage use every time he takes a useless trip to the hurricane devastated areas? How many homes could have been built or re-built for those displaced people from one of Bush’s useless trips from just in the fuel savings alone.

Lee J Buividas

 

Job layoffs??? EVERY tech company in the DC area is looking to add people. Especially those who already have an active clearance.

 

I don't quite share Lee's negative outlook. I know for our company, US goverment work is on the upswing. And getting bigger.

 

Well I am not being negative so to speak, just feeling a cycle change in our economy. Layoffs will come especially because Homeland security is a joke. We saw a small part of that because of FEMA and the billions in waste doing research and developing products that will make us no safer then using a mouse trap for security. The government needs to cut back on spending in order to pay for the hurricanes and especially this no win war boondoggle, which could possibly bring back the very unpopular draft if we continue to have little success over there, especially what the public perceives, I guess Bush has about until next spring or summer to show the American public what this war is accomplishing and how we are safer because of it. Homeland security will soon ware on the public as expensive BS. Does the average American feel any safer since 911 I know I don't and I don't feel any less safe since before 911 either. Homeland security is creating a lot of inconvenience to the American public without most of us feeling anymore safe. Homeland security will go the way of the dinosaur and the real things that will actually make us safer will be molded to other agencies. The public will tire of the waste and money spent on Homeland security over the next few years as the public sees what a boondoggle it really is. Fema is already a joke and still continues to be and you got to be wondering how that clown who testified to congress last week how he even got that job. Thank god he is gone and he is just the beginning of a much larger problem in FEMA and Homeland security.

The big killer of the economy is going to be high energy prices. Most of you don't work with minimum wage people and the lower paid who build your homes. They need raises to have the bare essentials like gas to get to work. Builders can not raise prices to cover this as people are not buying now or can builders afford to pass on the higher costs for materials because of higher energy prices. A lot of you live in a dream world of working and living and never having to deal with the lower paid in any kind of major way unless they are mowing your yard or cleaning your home. The economy is a very delicate balance between the haves and have nots when that gets to far out of sink big problems happen for everyone. We are now starting to see this in industries that employ a lot of low wage earners yes again the building industry. The building industry has a major impact on all of the economy and when it goes it also creates big problems for everyone no matter how insulated they think they are. Hence Homeland security and all it's private support businesses is going to be rich target for major cutbacks, especially if there are no major terrorist attacks. I say this because Homeland security has been a major boon to the local economy and when it is seen as a big waste pit as it is so goes the local economy here in the DC area. These are my observations and so far they are proving true with the beginning of steep declines in home prices and the lack of sales which I said would happen many many months ago when a lot of people here were drunk and high on how much their home has gone up. I am not negative just a realist and our government is going to cut back on spending in a big way and I am just saying through my observations where are lot of the cuts are going to come from. Yes that is going to put a big crimp on this economy and lifestyles here and it is starting to happen.

Lee J Buividas

 

I will add i would rather be prepared for the worst in the economy and be prepared then not. Homeland security from what I can see prepares this country for nothing since what have seen during the hurricanes. Our military seems to be the only ones with their act together these days and what a shame to have to waste them in Iraq.

Lee J Buividas

 

Lee,

Sure must be nice to have all this "insider" information coming at you from all your super-secret "buddies" with their brilliantly polished crystal balls. Where can I get one? This ain't the oil-speculating economy of 80's Texas.

 

Layoffs will NOT come because one aspect of Homeland Security, FEMA, did a poor job. Homeland security is a "piece" of the pie when it comes to defending this country from terrorism. I sure feel safer since 9/11... How many attacks have there been on our home soil since then? Plus, how many plots do you think have been stopped that will never see the daylight in the media?

As far as the "boondoggle", I will agree that it is not going "as planned". But IMO, the best way for us to stop terrorism is for the peoples of the Middle East to put an end to it. And getting a democratic based government in the middle of the Middle East [:0] will go a long way towards this end.

You sure are quick to bash Homland Security and FEMA did they not give you a job or contract? Or are you just buying into the Democrat biased opinions? MS. and AL. also got hit hard and they aren't faulting FEMA like LA. is? Why is that? Becaquse those states were better prepared? Sure, FEMA could have done better but I think the state of LA has alot of blame to take.

Lee, I think you need to get more information from multiple sources before you start your diatribes.

 

Now Now Now I have no secret buddies , well I take that back possibly this international sort of underground beer drinking club with a running problem counts as secret. known as the Hash House Harriers and here is the local web site http://www.dchashing.com/ I am hosting one of our events on sat oct 8th 3pm and if any of you want to come and run or walk a few miles then hang at my house and drink eat and party into the night you are certainly welcome. http://www.gfh3.org/ this website will give you the info for the next sat event and how to get here. The picture on the website does not include me they said I was too ugly and not old enough to be in it. ha ha ha There is a lot of younger people in this group too.


If you ever see a bunch of what appears to be crazy people running or walking around blowing whistles and shouting On ON looking for flour to follow on the street,woods or just about anywhere including at times even shopping malls to hotel lobbies or whatever, well you might of seen a bunch of hashers looking for beer during and at the end of the trail. ha ha ha A lot of our military enjoy this craziness to let of steam and just have a good time. So there go, these are my secret buddies
which can be found almost anywhere on the planet and even the space station eventually if one of our group from California (JPL) ever gets to go if the space program stays intact and keeps getting funded. Although I don't think they are going to let him lay a trail from earth to there. I have heard our space program does not allow flour to be thrown from the space shuttle. [}]


Lee J Buividas

 

T8erman just to reply why do we need homeland security when we have all these organizations such as the National Security which I might be wrong has a large group of buildings right on 28 we have the CIA we have military intelligence we have DEA we have the border patrol the FBI the secret service and God knows what else even the criminal division of the IRS. Do we need such a huge organization such as Homeland security to what I understand to be the place all these organizations are to report to somehow so all this info could be consolidated? Personally I don't think this is working too well as of yet or ever.

Israel is a democratic country in the mid east and what a mess that is all the time with their neighbors and Israel has a lot more security going for it then we will ever do for Iraq under the present circumstances. Iraq does not have a chance in hell unless we send a lot more troops there and we can stay possibly forever. I don't think the American public has the wear with all for that. I am not a democrat or republican I vote for the person and I did vote for Bush the first time and did not vote for anyone the second time. My personal opinion we should either go in and put many many more troops in Iraq for the long term possibly for my lifetime or pull out now and let happen, what is going to happen and hope for the best. It took a lot of years but Viet Nam is starting to do fine without us, just as Cuba will go democratic when Castro is gone and be a better place, which could be soon. We can't police the world by ourselves and we don't have world support to go at it in Iraq and never did. If anyone thinks we are going to change the world for the better by forcing our will is in for a rude awakening. WE are not an island to ourselves we tried the isolation stuff in the past in other ways and it did not work. The big stick only works in the long term when the world is with us and very few are with us in Iraq.

Terrorism, the kind that caused 911 and most of the other problems of this kind around the world is not coming from one country it is based in radical Islamic teachings and as we are starting to see can happen anywhere and that is where the war on terrorism needs to be fought. This stuff is going on everywhere as we have seen just recently in London.
Our battle in Iraq is just diverting our attention from where the real battle grounds are. This enemy seems to be hidden everywhere. Maybe the solution is hidden in the countries that have not been major victims of terrorist attacks, just a thought.

Right now we have our own little battles such as the dog wars in our neighborhoods or the pipe stem wars the speeding wars the hospital wars getting to work wars the grocery store wars and on and on and we are going to correct the wrongs of the world all by ourselves??? I don’t think so!!!! Interesting article in one of our newspapers how the Iraqi’s are really starting to feel not written by the propaganda the Bush government is giving us. The article follows from the Washington Post


The infamous words of Rodney King "can't we all just get along"

Lee J Buividas

Baghdad Neighborhood's Hopes Dimmed by Trials of Occupation
Some Who Welcomed Americans Now Scorn Them

By Ellen Knickmeyer
Washington Post Foreign Service
Tuesday, September 27, 2005; A01

BAGHDAD -- In the chaotic, hopeful April of 2003, Baghdad's Karrada
district was one of those neighborhoods where residents showered
flowers on U.S. forces entering the capital. Revelers threw water on
one another and the Americans, exuding joy at the crushing of a
dictatorship that had silenced, tortured and killed their people.

Now, with the end of the third and in many ways hardest summer of the
U.S.-led occupation, the lights of Karrada are dimmer. The collapse of
Iraq's central power system has left Baghdad averaging less than eight
hours of electricity a day.

The crowds on the sidewalks have thinned -- kidnapping and other forms
of lawlessness since the invasion mean Baghdad's comparatively
liberated women seldom leave home without a good reason.

Car bombings and other insurgent attacks, as unknown in Baghdad before
the invasion as suicide subway bombings were in London until this
summer, have killed more than 3,000 people in the capital since late
spring.

Leaving the house for work each day has become a matter of turning the
key and consigning one's fate to God, said Jassim Mohammed, 41, a
Karrada merchant who has lost two of his closest friends and one of
his lighting shops in car bombings since the Americans came.

"Now in Iraq, no one and nothing can protect you but that. Every
morning you kiss them goodbye," Mohammed said, referring to his wife
and children, "because you don't know if you will be back or not.
Everyone in Iraq does that now."

Mohammed's remaining shop, its chandeliers sparkling with their
Czech-made crystal pendants, is one of the last bright spots at night
on Karrada's grubby streets.

Like the rest of Baghdad, Karrada is messier, more beat-up than it was
before the invasion. Merchants leave some damage from bombings
unrepaired, anticipating more violence. Rubbish tends to pile up in
once-tidy streets, neglected by a weak, cobbled-together government.

And more than two years after flowers and water cascaded onto the
arriving Americans, what's being thrown on Karrada's streets, and who
is throwing it, have changed as well.

Mohammed, a courtly, gentle-mannered man, carefully chose the harshest
word he could think of for urine.

In Karrada this summer, Mohammed and the neighborhood watched as
American soldiers on patrol grew irritated at an Iraqi who had left
his car in the street to run inside a store on an errand, blocking
their armored convoy.

The Americans took one of the empty plastic water bottles they use to
relieve themselves when on patrol, Mohammed said. When the Iraqi
driver ran out to move his car, an annoyed American plunked him with
one of the refilled bottles and rolled on, Mohammed said.

"He started crying," Mohammed said of the Iraqi driver, humiliated in
front of the neighborhood.

Mohammed, who said he had been one of the happiest people in Karrada
to see the Americans when they came in April 2003, retrieved the
bottle and handed it to the weeping man.

"I said, 'Give this to the Iraqi government,' " Mohammed said. " 'Tell
them this is the sovereignty the Americans have brought us.' "
Breakdown in Order

Many in Baghdad were sure that the mightiest army in the world had a
plan for what would follow the invasion. Hiding in their homes, they
waited to be told what it was.

A month after the Americans arrived, Kareema, a 42-year-old
engineering student, wondered when they would reschedule oral defenses
for master's theses.

Kareema was sheltered in her dark home with her four sisters and
sisters-in-law -- all doctors or engineers who had devoted their lives
to learning and their careers and waited only to resume them. Outside,
looters had stripped classrooms of desks and blackboards, burned
university buildings and ransacked a museum holding artifacts charting
5,000 years of civilization in Iraq.

The breakdown in order and the dismissal of Iraq's security forces
unleashed a crime wave that still lingers. Daylight kidnappings and
robberies are common. Parents hire armed guards for their children's
school buses. Boys and girls in middle-class neighborhoods routinely
fight off strangers who attempt to shove them into the trunks or back
seats of cars and take them away for ransom.

And three summers into the U.S. occupation, Kareema and her sisters
and sisters-in-law cloak themselves in black and wear black gloves
when they go out, a neighbor who knows them said. But these days, the
neighbor said, the sisters seldom go out.
A Web of Problems

When the Americans came, they protected only a few public buildings
from looters, said Nagham Emad, 23, a university student lingering in
a Karrada ice cream shop, spooning up her frozen sundae slowly to put
off the return to a dark, hot home.

One of the buildings was the Oil Ministry, Emad said. The others were
Saddam Hussein's marble-and-gilt palaces, which the Americans took
over for their offices. Now, when power outages darken the rest of
Baghdad, she said, massive generators make the barricaded, highly
guarded palaces of the Americans glow.

The lack of electricity, like the lack of security, remains one of the
two biggest complaints among Baghdad's 6 million people.

The Americans had underestimated the problems with Iraq's
infrastructure, a U.S. official in Baghdad said on condition of
anonymity. A U.S. military spokesman, Lt. Col. Steve Boylan, said a
large part of Baghdad's electricity problem is that even as supply
increases, it is being inexorably outstripped by demand.

But the problems go beyond the dilapidation of the electrical grid
under Hussein, the unplanned-for insurgent sabotage that regularly
undoes repairs, and myriad other difficulties.

Rather than being centrally controlled, the flow of power throughout
Iraq is allocated by switches at hundreds of substations around the
country, the U.S. official said. Without a strong central government
to enforce compliance, individual substations at times balk at sharing
electricity, and the Shiite Muslim south and Kurdish north cut the
flow to Baghdad.

As a result, the official said, not only are Baghdad's homes and
businesses robbed of power, but the city's leaky water system
continually runs dry and its purification plants face contamination.

A similar web of problems has plagued Iraq's oil industry. Insurgent
attacks, artificially low prices and unchecked smuggling have helped
cripple American plans to make Iraq self-sufficient through its oil
industry. Iraq exported 1.46 million barrels a day in August, down
from July, and down from the 2 million barrels a day before the
U.S.-led invasion.

Insurgent attacks at the end of August shut down the main pipeline
from the northern oilfields just as it was being brought back on line
after attacks blocked exports for most of 2004. The shutdown came as
Hurricane Katrina hit the U.S. Gulf Coast and world oil prices jumped
to more than $70 a barrel.

Iraq, holder of the world's second-largest oil reserves, earlier this
month instituted gas rationing, allowing each vehicle in Baghdad onto
the streets only every other day. Heads of households struggled to get
themselves to work and their children safely to school.

By the end of that week, rationing briefly overtook security and
electricity as Baghdad residents' main topic of complaint in a summer
that was too hot, too dark and too dangerous.
Mixed Feelings

Americans, and the rest of the world, frequently compared the chaos in
New Orleans this month to the situation in Baghdad. But New Orleans
didn't look that way a month ago. And three years ago, neither did
Baghdad, Karrada's people said.

"We used to have electricity," said Emad, the university student. "We
used to have water."

"Entertainment," interrupted Emad Mahdi, a driver for a government
ministry who was with her.

"We used to be able to walk in the streets with our heads high, not
afraid," Emad said. What happened in New Orleans -- the contrast
between official words and deeds -- should give the world a better
idea of the U.S. performance in Baghdad, she said.

"They failed there, they failed here," Emad added angrily. "Americans
should take a lesson from what Americans have done for three years in
Iraq."

"In the States now, everyone wants to help, but here -- everyone
forgets about us," said Saif Ali, a 27-year-old merchant with a mobile
phone shop two doors down from Mohammed's lighting store.

Like many heads of households in Baghdad, Ali awakes three or four
times each night to switch generators and appliances off and on. One
of his aunts has spent the summer lingering between life and death --
one of seven members of his family injured by bombs, he said.

Across Iraq, many people express shared sentiments about the past.
They are happy that Hussein and his repressive regime are gone, but
they are nostalgic for the safety, the lights and the other elements
of normal life of that time.

Their thoughts about the future vary widely. Ali, like many Shiites
now assured of power by their majority status under Iraq's version of
democracy, is hopeful.

But their thoughts about the present are uniform.

"We can't think about how bad it is," Ali said.

 

And what do you think will happen if we abandon Iraq? It will be come THE breeding ground for future terrorists. Much worse than Afghanistan after we abandoned them in the 80's. IMHO, giving Islamic peoples a true taste of Democracy (i.e. freedom) will go a loooong way towards controlling (loosing used) the Extremists.

As for our Intelligence Agencies, each has it's own unique charter and mission. Much of the work certainly crosses boundaries thus the need for an overall lead Organization and Intelligence-czar.

Do you think the CIA, FBI, and other focus entirely on terrorism? The CIA still needs to monitor ALL countries to a certain extent, there are still alot of bad people in our own country that the FBI needs to track down.

 

I agree, Iraq is now a training ground for terrorists . But only as a result of the US occupation.

About giving islamic people a true tase of democracy, why not our biggest ally, Saudi Arabia (you know, the country that gave us 15 of the 19 9/11 terrorists). Or what about Kuwait, didn't they promise us a democratic government when we freed them back in '91?

 

Lee

No the DC area will not go into this large recession you are predicting. You may see a slight turndown but thats it. The Govt is making clearances harder to get and is requiring people to have them. ie A clearance in the DC area is 100% employeement. I do agree on the housing prices though

 

And I thought "Chicken Little" didn't open until November 4th. Let me see if I can summarize Lee's (and others) major points. Economy in the area is about to go south (either from oil price influence or cutbacks in government spending that will result in huge job losses) and the housing market is about to collapse as well.

Let's discuss the housing market first since that is what this thread was originally about. While the price trend of the past 3 to 4 years may not make sense if you are solely focused on the numbers and assume that there has to be a correlation between increases in household income and house prices, if you look at the whole picture there seems to be little that indicates more than return to "normal" house value increases.

Houses in general have little intrinsic value. What defines the value of a house is two things: how much someone is willing to pay for it and how much someone is willing to sell it for. A collapse in the housing market would require two forces in conjuction. A sudden reduction in the demand for houses coupled with a glut of desperate sellers. Remember, although houses are an investment, the majority of houses are owner occupied. So if the housing market was to slowdown or even start to show losses, most owners simply would not sell unless forced to by other external influences (job loss, or economic change). Eventually the prices would stabilize once the supply dried up and the market would return to normal. There is little chance that a slowdown in the demand is going to occur, especially in areas like Ashburn, given the factors like the huge inlfux of workers from the military base closures and realingment (Ft. Belvoir will pick up 20K+ new employees alone). Once you start to add in the additional contractors, services, etc.. that will be required to support just those new residents, the possibility that more than a minor reduction in demand will occur in the next 4 to 5 years. The Washington region added 84,500 new jobs between August 2004 and August 2005. That meant the area needed an additional 53,000 homes, but only 25,000 new units were built. Because Northern Virginia is the country's third-fastest producer of new jobs and has the country's second lowest unemployment rate (2 percent), there aren't nearly enough homes to house them. There are no workers to fill those jobs in Northern Virginia and the workers have to move from somewhere. There's no pile of vacant housing sitting out there to speak of.

Even with the slowdown in overall resales in our area, the only "losses" sellers are seeing on houses is in the amount of profit. Example, house purchased 9 months ago for 700k, would have sold for 975k 2 months ago but sold for 950k a week ago. So they "lost" 25k in profit but still realized nearly a 40% profit in 9 months. Over the past 20 years, 64 cities have seen home price declines of 10 percent or more over a period of two years. But all of those declines occurred in conjunction with a weak overall economy, something not present now.

On the issue of the local economy, Lee's assertions that a drastic cut in spending by the govt. is just around the corner which will cause a collapse in the job market here is ludicrous. Even if you assume hypothetically that govt. cut back on spending there are few industries in our area that would be affected. NoVa is a high-tech and services economy, most business here understand the cyclical nature of govt. spending and are positioned to provide services to both the public and private sectors so that a downturn in one market does not sink the business. Good example is the local economy after the Interner bubble. Many would have bet that a collpase in the high-tech stocks would have been a "nuclear bomb" to the NoVa economy and yet once the dust settled we returned to normal in a very short time period (and kicked off the current housing boom).

Could we continue to see house values doubling every 3 years? Yep. Could we see a return to 8% to 10% annual growth in values? Yep. No one can truly predict the direction of the market.

 

Well intersting enough. But, Does anyone have any advice or similiar stories of knowing someone that HAD to sell in a buyers market? We've been relocated out of state and only purchased several months ago... We had planned on staying in the area for a long time or else wouldn't have bought. But, my husband's job was relocated. Unfortunatly, we don't have a buy out with the company.

 

FWIW ... there were two houses on my street, directly across from me. One went up for sale about 3 weeks after the other. One sold within 2 weeks, that was in July ... the other is still on the market, and has moved to another realtor.

The same model with basically the same amenities and backyard area. The one not yet sold is even a corner lot. I have no idea of the asking price, but I understand the other went around the mid 700's (!!!???!!!) .



Neil Z.
Resident since 1999

 

Kuwait held their general elections 2 years ago. Women also voted. They are similar to England now. They have a ruling family but most positions are based on elections.

As for other countries, we really do not have much we can do other than diplomatic influence. We are IN Iraq which should (hopefully soon) enable a democratic process to take foothold. And contrary to the occassional news articles, most Iraqis still want us there. Unfortunately, the "Someone blown up" article will almost always win out over the "We love America" article.

 

Washington Business Journal - 4:05 PM EDT Thursday
Job growth outpaces new homes
Joe Coombs
Staff Reporter
Job growth will vastly outpace the rate of residential development in Greater Washington in the next 25 years, according to a report released by the Metropolitan Washington Council of Governments.

The region will gain 1.4 million jobs by 2030, according to research compiled by the council. Also by that time, the region will have added 2.1 million residents in a 30-year period and 821,000 households; the research tracks growth trends from 2000 to 2030.

The boom in jobs and population is expected to hit the area's largest suburbs the hardest, including Montgomery and Prince George's counties in Maryland and Fairfax County in Virginia. More than half of the employment growth will occur in those counties, the report says, but the majority of the population growth be concentrated in Fairfax, Loudoun and Prince William counties in Virginia.

The discrepancy between jobs and households shows a shortfall of about 92,000 homes.

"The good news is that we are growing and we have a very robust economy," says Jay Fisette vice chairman of the council, in a prepared statement. "The bad news for our jurisdictions is there are potential issues of congestion as a result."

 

Reality Check!!

If you can't afford the area and get to work, people will not move here.

The country is going into a major reccession.

Just check with the builders in our area and see how sales are, virtually stopped.

Very little is selling and it will get a lot worse.

Further these articles are propaganda from the the Real estate industry in disguise, to try to scare people into buying way over priced homes that are not selling.

The article says a possibility of congestion give me a break!!!

Right now the proposed solutions and money to improve traffic congestion will not even begin to keep up with the growing traffic problem, much less improve it. Just where are all these projects that are going to improve traffic.???? Where is the money??? And how many billions of years will it take to just get the few started and done. Sterling Blvd & 28 interchange is now going to take a year longer or more and that has has been annouced very quietly. Hell they can't even finish the waxpool interchange on time. Traffic and high housing prices is going to kill the big job growth being announced all the time. It is happening as we speak and homes are NOT selling and that is what is happening not the propaganda by the real estate industry disguised as stories about the Washington real estate market. If all this was true about job growth and shortage of homes, homes would sell no matter the price.

Lee J Buividas

You all missed the party of the year with a 7 mile run in the newly formed swamps and chest high water nickednamed the (Death March ([}]) last saturday in pouring down rain. Afterwards drinking, eating, and dancing well into the night. It does not get any better then that.