January 19, 2006

Morning Feed

YOU THINK HE'S GOT WORRIES. The chances of a decline in housing pricing within the next two years in DC, Arlington, Montgomery and the rest of the suburbs increased to 34.5 percent, according to the Winter 2006 Economic and Real Estate Trends report issued by Private Mortgage Insurance Co. The Fall 2005 report estimated only a 20.9 percent chance of a decline. Things just got scarier for DC condo, co-op and house owners.

Now before starts looking like our friend Mr. Abramoff, the report goes on to say: "Because the national and regional economies remain strong, providing a counterbalance to slowing appreciation, at this point we believe a soft landing is the most likely outcome."

Everyone knows, the report said, that the housing price increases of recent years were "unsustainable because people's incomes can't support the kinds of home prices that result."

How many times have you had this conversation? You know the house on that street on Capitol Hill or Bethesda or wherever ... Where nearly everyone is a trade association hack, a government lawyer or a journalist ... It sold for close to seven figures and everyone says who can afford that? We can't. It's unsustainable.

The assumption being made though is that the economy will keep growing slowly. What if an unexpected economic downturn hits, what if the terrorists strike, what if ... kiss that soft landing goodbye. Ok then its time to worry.

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The feds want to take a big chunk out of the 110 acres that will be available when Walter Reed hospital moves out in 2011, says DC Delegate Eleanor Holmes Norton. The State Dept. wants land for new chanceries and the General Service Administration wants land for office space and sees no reason to share the name of that agency it envisions filling it.

But GSA taking a chunk and State taking another, there should be plenty of room to build fancy condos, offices, hotels and other revenue-generating facilities. Right? Maybe wrong. The feds have asked for portions of the property with which has the fewest historical buildings, thus is considered the easiest to build on.

3 comments:

Anonymous said...

You mentioned a potential 34.5% decline in Arlington, Montgomery and the rest of the suburbs... what did the report say about the District?

dcbubble said...

Like it says above...dc and the suburbs are lumped as one market

urbannomad said...

If I were guessing I'd say just the District has probably a higher chance. Because as much as some of us like it, the reality is that the number of people who want to live in the city, especially this city, are limited. On top of that the number of people who are willing to pay 300-400K for a 1-bd condo in dc are even more limited if not already gone all together. Or DC could continue to thrive who knows, just my opinion.