Housing bubble – or out of Housing bubble – or out of step with the real world type bubble?
The latter is for sure.
no_such_reality
February 6, 2013 @
8:24 AM
DC is a bizarre DC is a bizarre microcosm.
Lots of DINKS and lots of highly compensated people, lobbyist, lawyers, consultants all being paid by people that want to feed on the government. Think Solyndra.
Median household income was $84.5K. Carmel Valley’s median income is $82K. Just think, an entire metro area making more than Carmel Valley on average.
And the average Federal worker has a total comp package of $107K (includes retirement and health benefits). I’m guessing that’s a $80K salary.
All that said, DC also has a disproportionate amount of highly educated, highly motivated people.
FYI, the census.gov site is updated, 2010 census data is available down to the CDP level.
paramount
February 6, 2013 @
10:24 PM
no_such_reality wrote:
All [quote=no_such_reality]
All that said, DC also has a disproportionate amount of highly educated, highly motivated people.
[/quote]
I guess this is true relative to the country overall, but at least in my field it’s much easier to go from California to DC, than the other way around.
We rarely hire from the DC area, and we generally feel that jr/mid level here is equal to a sr+ in DC.
That’s because employers can be more choosy in California.
Many who do just fine in the DC area in terms of their job and skill level, would not survive in Cali.
sdduuuude
February 6, 2013 @
10:06 AM
I think you have to go back I think you have to go back to the early days of Piggington and run the numbers that Rich ran back then to determine.
The key numbers are the price/rent and price income ratios.
What do those look like ?
moneymaker
February 6, 2013 @
7:04 PM
When you say DC are we When you say DC are we refering to the Virginia area as well? Everywhere the Metro runs? I would guess the actually population of DC is not all that high. Just a minute…
moneymaker
February 6, 2013 @
7:10 PM
Washington DC has a Washington DC has a population of …632K, more than I would have thought. More than 50% black as well-http://quickfacts.census.gov/qfd/states/11/1150000.html-total population is growing @ 2.9% about the same as GDP.
spdrun
February 6, 2013 @
7:30 PM
He was specifically speaking He was specifically speaking to the city, though northern VA ain’t cheap either. Trinidad used to be an utter toilet (streets closed by cops due to gang violence) as recently as a year ago, if it isn’t still.
patb
February 9, 2013 @
8:41 PM
flippers are trying to sell flippers are trying to sell properties in trinidad for 550K
patb
February 9, 2013 @
8:40 PM
i am using the MSA i am using the MSA
kev374
February 8, 2013 @
12:45 PM
It’s not only DC, it’s It’s not only DC, it’s everywhere. Orange County is also in a bubble… prices have increased sharply, what used to be listed for $330-350k for a small townhome is now listing north of $400k, so $50k jump in a year? LMAO! Based on what fundamentals? This is nothing but pure bid-up speculation.
And of course the inventory situation is pathetic…if you exclude properties priced 25-30% over 2009 prices (new underwater listers trying their luck) and also exclude junk dilapidated inventory there is virtually nothing for sale!
no_such_reality
February 8, 2013 @
12:51 PM
Part of that is the insanely Part of that is the insanely cheap cost of money, particularly for Government supported conforming loans. It’s higher now but for a while there, it was running 3.125% with no points on conforming.
The loan payment on $400,000 is less than two bedroom rents.
spdrun
February 8, 2013 @
12:53 PM
$50k jump in a year, but $50k jump in a year, but $100k fall since 2006-7 for Orange County. Whereas DC never really fell from bubblier times.
paramount
February 8, 2013 @
11:15 PM
Remember, it’s not that Remember, it’s not that things are worth more, it’s that the dollar is worth less.
CA renter
February 8, 2013 @
11:48 PM
paramount wrote:Remember, [quote=paramount]Remember, it’s not that things are worth more, it’s that the dollar is worth less.[/quote]
Bingo. Worth less, and the price of using someone else’s dollars to leverage up costs less as a result. Gosh, if only we could figure out how this ends…
an
February 9, 2013 @
10:45 AM
CA renter wrote:paramount [quote=CA renter][quote=paramount]Remember, it’s not that things are worth more, it’s that the dollar is worth less.[/quote]
Bingo. Worth less, and the price of using someone else’s dollars to leverage up costs less as a result. Gosh, if only we could figure out how this ends…[/quote]
I thought leveraging is a recipe for going broke?
CA renter
February 9, 2013 @
5:19 PM
AN wrote:CA renter [quote=AN][quote=CA renter][quote=paramount]Remember, it’s not that things are worth more, it’s that the dollar is worth less.[/quote]
Bingo. Worth less, and the price of using someone else’s dollars to leverage up costs less as a result. Gosh, if only we could figure out how this ends…[/quote]
I thought leveraging is a recipe for going broke?[/quote]
It is when it all comes falling down! Using leverage in order to buy things up in anticipation of future price increases is a recipe for disaster. Many people are ignoring the disposition plans for many of today’s institutional buyers who (IMHO) are underestimating the true costs of maintaining all of these units over time. They are getting decent returns on these rentals because of the tight rental market (which is an anomaly caused by the foreclosures and the withholding of inventory at the same time), but those returns will look pathetic when (IF???) interest rates ever normalize.
kev374
February 9, 2013 @
8:57 AM
spdrun wrote:$50k jump in a [quote=spdrun]$50k jump in a year, but $100k fall since 2006-7 for Orange County. Whereas DC never really fell from bubblier times.[/quote]
2006-2007 prices were supported by funny money which doesn’t exist anymore so those price levels are not relevant 😉
February 6, 2013 @ 8:07 AM
Housing bubble – or out of
Housing bubble – or out of step with the real world type bubble?
The latter is for sure.
February 6, 2013 @ 8:24 AM
DC is a bizarre
DC is a bizarre microcosm.
Lots of DINKS and lots of highly compensated people, lobbyist, lawyers, consultants all being paid by people that want to feed on the government. Think Solyndra.
Median household income was $84.5K. Carmel Valley’s median income is $82K. Just think, an entire metro area making more than Carmel Valley on average.
And the average Federal worker has a total comp package of $107K (includes retirement and health benefits). I’m guessing that’s a $80K salary.
http://online.wsj.com/article/SB10001424052970203752604576641683529031952.html#
All that said, DC also has a disproportionate amount of highly educated, highly motivated people.
FYI, the census.gov site is updated, 2010 census data is available down to the CDP level.
February 6, 2013 @ 10:24 PM
no_such_reality wrote:
All
[quote=no_such_reality]
All that said, DC also has a disproportionate amount of highly educated, highly motivated people.
[/quote]
I guess this is true relative to the country overall, but at least in my field it’s much easier to go from California to DC, than the other way around.
We rarely hire from the DC area, and we generally feel that jr/mid level here is equal to a sr+ in DC.
That’s because employers can be more choosy in California.
Many who do just fine in the DC area in terms of their job and skill level, would not survive in Cali.
February 6, 2013 @ 10:06 AM
I think you have to go back
I think you have to go back to the early days of Piggington and run the numbers that Rich ran back then to determine.
The key numbers are the price/rent and price income ratios.
What do those look like ?
February 6, 2013 @ 7:04 PM
When you say DC are we
When you say DC are we refering to the Virginia area as well? Everywhere the Metro runs? I would guess the actually population of DC is not all that high. Just a minute…
February 6, 2013 @ 7:10 PM
Washington DC has a
Washington DC has a population of …632K, more than I would have thought. More than 50% black as well-http://quickfacts.census.gov/qfd/states/11/1150000.html-total population is growing @ 2.9% about the same as GDP.
February 6, 2013 @ 7:30 PM
He was specifically speaking
He was specifically speaking to the city, though northern VA ain’t cheap either. Trinidad used to be an utter toilet (streets closed by cops due to gang violence) as recently as a year ago, if it isn’t still.
February 9, 2013 @ 8:41 PM
flippers are trying to sell
flippers are trying to sell properties in trinidad for 550K
February 9, 2013 @ 8:40 PM
i am using the MSA
i am using the MSA
February 8, 2013 @ 12:45 PM
It’s not only DC, it’s
It’s not only DC, it’s everywhere. Orange County is also in a bubble… prices have increased sharply, what used to be listed for $330-350k for a small townhome is now listing north of $400k, so $50k jump in a year? LMAO! Based on what fundamentals? This is nothing but pure bid-up speculation.
And of course the inventory situation is pathetic…if you exclude properties priced 25-30% over 2009 prices (new underwater listers trying their luck) and also exclude junk dilapidated inventory there is virtually nothing for sale!
February 8, 2013 @ 12:51 PM
Part of that is the insanely
Part of that is the insanely cheap cost of money, particularly for Government supported conforming loans. It’s higher now but for a while there, it was running 3.125% with no points on conforming.
The loan payment on $400,000 is less than two bedroom rents.
February 8, 2013 @ 12:53 PM
$50k jump in a year, but
$50k jump in a year, but $100k fall since 2006-7 for Orange County. Whereas DC never really fell from bubblier times.
February 8, 2013 @ 11:15 PM
Remember, it’s not that
Remember, it’s not that things are worth more, it’s that the dollar is worth less.
February 8, 2013 @ 11:48 PM
paramount wrote:Remember,
[quote=paramount]Remember, it’s not that things are worth more, it’s that the dollar is worth less.[/quote]
Bingo. Worth less, and the price of using someone else’s dollars to leverage up costs less as a result. Gosh, if only we could figure out how this ends…
February 9, 2013 @ 10:45 AM
CA renter wrote:paramount
[quote=CA renter][quote=paramount]Remember, it’s not that things are worth more, it’s that the dollar is worth less.[/quote]
Bingo. Worth less, and the price of using someone else’s dollars to leverage up costs less as a result. Gosh, if only we could figure out how this ends…[/quote]
I thought leveraging is a recipe for going broke?
February 9, 2013 @ 5:19 PM
AN wrote:CA renter
[quote=AN][quote=CA renter][quote=paramount]Remember, it’s not that things are worth more, it’s that the dollar is worth less.[/quote]
Bingo. Worth less, and the price of using someone else’s dollars to leverage up costs less as a result. Gosh, if only we could figure out how this ends…[/quote]
I thought leveraging is a recipe for going broke?[/quote]
It is when it all comes falling down! Using leverage in order to buy things up in anticipation of future price increases is a recipe for disaster. Many people are ignoring the disposition plans for many of today’s institutional buyers who (IMHO) are underestimating the true costs of maintaining all of these units over time. They are getting decent returns on these rentals because of the tight rental market (which is an anomaly caused by the foreclosures and the withholding of inventory at the same time), but those returns will look pathetic when (IF???) interest rates ever normalize.
February 9, 2013 @ 8:57 AM
spdrun wrote:$50k jump in a
[quote=spdrun]$50k jump in a year, but $100k fall since 2006-7 for Orange County. Whereas DC never really fell from bubblier times.[/quote]
2006-2007 prices were supported by funny money which doesn’t exist anymore so those price levels are not relevant 😉
February 9, 2013 @ 9:39 AM
^^^
Except in DC,
^^^
Except in DC, apparently.