I read that the Ryan family company made its fortune paving roads.

by Steve S. on Aug 15, 2012 8:47 am • link • report

I've just learned what an Ayn Rand disciple Ryan is. When the government helps him, he's "pulling himself up from his boot straps", but when it helps others, it's "government dependancy". It reminds me of the old Calvinist idea that if you "made it", God looks favorably on you and vice versa. Street cars are not yours while the car you drive is yours. Never mind that you wouldn't be able to drive without government built roads.

by Thayer-D on Aug 15, 2012 9:04 am • link • report

John Mica, head of the House Transportation and Infrastructure Committee won his GOP primary.

by Tom Coumaris on Aug 15, 2012 9:10 am • link • report

Ryan would be an absolute disaster. I think that is quite clear here.

I love the GOP mindset... We are all about jobs, jobs, jobs, but really we are all about social issues, and military spending... Because dropping a lot of 100k bombs on Iran will certainly create a lot of jobs? I think the Dems need to hit this issue harder, especially in the few urban areas that are actually contested. Northern Virgina especially. Talk about how Ryan wants to spend half as much in 4 years as we do now. Not sure how anyone can vote for this guy, especially if you live up here.

by Kyle-w on Aug 15, 2012 9:23 am • link • report

Wait, how many of Paul Ryan's political opponents were against the auto bailout?

by Kolohe on Aug 15, 2012 9:32 am • link • report

@Kolohe
Of course all Democrats were for the auto bailout, I think it's mentioned to show how Ryan is hunky-dory with 'big-government' spending when it's to the benefit of roads and the auto industry and/or politically advantageous for him, but cries waste when it comes to rail and public transit.

by jj on Aug 15, 2012 9:49 am • link • report

That Florida ad is just.......wow. Are they unironically copping that old fake Robot Insurance commercial from SNL?

by andrew on Aug 15, 2012 10:01 am • link • report

Not too thrilled to see that Gallaudet's campus plan makes no mention of the significant amount of land that the university owns at the Florida Market site, and doesn't seem to do much to open up their campus to the surrounding neighborhood (it's currently a walled fortress).

If they really intend to squat on the land, they're no better than the slumlords at Howard, who have been blighting Shaw and U Street for years with the same practices. The city should consider extending the blighted property tax to nonprofits and academic institutions; they're often the ones doing the most harm to our urban fabric, and they are completely unaccountable for it.

by andrew on Aug 15, 2012 10:05 am • link • report

@ Andrew et al. I've long wondered if DC could impose a property tax on reserved parking spaces, particularly one that would make sure churches and nonprofits pay. Or put their parking under concession to be operated as unreserved commercial parking lots.

by Steve S. on Aug 15, 2012 10:41 am • link • report

If you moved here in 2009 and wanted to buy a house, you got lucky. I came here around second half of 2010 for my job, thinking I may be able to buy a house in the near future. Even with me and my finance working, I don't know if it will be possible. Who's buying these houses now. And I don't want to hear anyone say they bought in 2009 because they knew that's when the low point was going to be. Nobody knew for sure and nobody knew prices would drop that much.

Personally, I think this town is over priced, and def neighborhoods that are overhyped (Col. Heights). This whole area is so intertwined with the Federal Government, what if all those cuts do happen. If you really do want to buy a house and live the new urban lifestyle (walk to subway, bus lines, grocery store, etc), it seems as if you have to be near the 1%.

by Nickyp on Aug 15, 2012 11:03 am • link • report

@ Nickyp
You're exactly right, it does take a lot of money to afford the "new urban lifestyle". It's a matter of supply and demand, and there's clearly more demand than supply. All the more reason to push for the DC street car plan.

by Thayer-D on Aug 15, 2012 11:11 am • link • report

Real Estate in DC has always been overpriced. Just some years it's more overpriced than others.

Home ownership is over-rated. Renting usually makes more sense.

by Juanita de Talmas on Aug 15, 2012 11:12 am • link • report

Every car you can do without is like $100k more mortgage you can afford. Interest rates are crazy low too. Look at FHA loans. Still the payment is a kick in the gut every month.

by NikolasM on Aug 15, 2012 11:17 am • link • report

@Attack ad: be happy they spelled "greater greater washington" correctly.

by goldfish on Aug 15, 2012 11:22 am • link • report

@Nickyp

I agree. My wife and I moved to Petworth in September 2010, and I think we were just far enough north that it hadn't gotten crazy yet. We are getting a ton of activity now, we have houses getting flipped all over the place.

@Juanita

The facts disagree with you in 98 of 100 metro areas currently, DC included.

Lets chat in 15 years when I own my DC rowhouse (which even at 2% appreciation, will be worth $400,000.) All the while, my current payment even on a 15 year mortgage (2,050 including taxes and insurance) is what it would cost me to rent the whole place. Lets chat in 15 years, when the rent on my place is $2,500, or even $3,000+, and I own the place outright.

Renting can very often make more sense given an individuals circumstances, but with interest rates where they are, and prices (depending on your thoughts on the future market) where they are, if you can stay for a while, buying most likely is the much smarter financial decision, across the nation.

by Kyle-w on Aug 15, 2012 11:33 am • link • report

Juanita,

No, houses in DC weren't always expensive, in fact until 2002 and after, housing prices in the District were fundamentally depressed. There were no such things as bidding wars, you could buy beautiful, recently renovated 3 story row homes a block from Eastern Market for 315K (as I did in 1998) that were sitting on the market for months.

DC's real estate had decades of artifical price depression, brought on by the fact that DC (the city) was broke, run by criminals that made organized crime look childish, the murder capital of the nation and the worst schools in the nation. Entire swaths of NE DC were still burned out carcasses from the 60's race riots and had never been redeveloped. DC was bleeding population. All these things act together to depress realestate prices and the difference was stark.

Thats all changed in the past 12-14 years.

And no, homeownership in DC is not overrated, and you as a renter are paying far more to put a roof over your head than the average buyer.

Your money is thrown away, the thousands you spend every month aren't paying down loans or debt, not getting you closer to "owning" anything. That and your costs excalate every year, in DC that escalation has been averaging 4-6% per year.

My costs are fixed. I will pay the same price for the roof over my head in 10 years that I do today.

At the end of this fictional 10 year period, I will have maximized my opportunity costs and accumulated equity in an appreciating asset that so far totals in the hundreds of thousands. You will walk away in 10 years having paid someone elses mortgage and not a shred else to show for it.

I am not saying everyone should buy a place, but if you are going to be staying put for atleast 5 years, it is a no brainer, especially in places like DC

by anon on Aug 15, 2012 11:41 am • link • report

you could buy beautiful, recently renovated 3 story row homes a block from Eastern Market for 315K (as I did in 1998)

And the median household income in 1998 in DC was around $34,000. A house that costs ten times the median income is by any definition "overpriced".

by Juanita de Talmas on Aug 15, 2012 12:09 pm • link • report

but if you are going to be staying put for atleast 5 years, it is a no brainer, especially in places like DC,

Yeah, that's what all realtors said. Until the housing bubbles burst. And now millions live in underwater houses.

by Jasper on Aug 15, 2012 12:10 pm • link • report

Juanita,

Actually it was 41K per year, and the Median house value was 157,000 dollars. By your metric (which is fine if you live next to a corn field in Iowa, but not very useful in any urban area in the US)so again...you are wrong.

Jasper, thats the entire core of this discussion. There was no "bubble" burst in the District and no corresponding savage fall of home prices.

by anon123 on Aug 15, 2012 12:34 pm • link • report

And the median household income in 1998 in DC was around $34,000. A house that costs ten times the median income is by any definition "overpriced".

This is nonsense, especially in DC, where crushing, generational poverty skews the median now. If I'd had enough sense to buy that "overpriced" rowhouse in 1998 for $315k, I'd be doing cartwheels now.

by dcd on Aug 15, 2012 12:38 pm • link • report

@Jasper

"but if you are going to be staying put for atleast 5 years, it is a no brainer, especially in places like DC*,
Yeah, that's what all realtors said. Until the housing bubbles burst. And now millions live in underwater houses."

*Assuming you aren't buying a house at the absolute top of the market, in a wildly unregulated free-for-all.

Now that we are past that whole mess, I tend to think we will not see that happen again. It depends on who we elect this fall for sure, but with that said, if you think that housing prices are going to collapse again, then you should not buy a home.

by Kyle-w on Aug 15, 2012 12:40 pm • link • report

The Realtors are out in force today.

by Vicente Fox on Aug 15, 2012 12:41 pm • link • report

Buying a house was sold as a "can't miss" avenue to build middle class wealth. Instead, it became a $10 trillion rathole that either loses nominal value or stumbles along, unable to keep pace with the rising costs of ownership (property taxes, special assessments, etc.).

When owners finally give up the idea that the housing bubble can be reinflated, the house is sold for less than the mortgage to an investor who offers to rent the home to the previous owner for half the cost of the mortgage he was paying.

by Charles Hugh Smith on Aug 15, 2012 12:44 pm • link • report

Charles,

Buying a home "was" a way to build long term financial stability in this nation from 1945 until 2008. I don't call 63 years of confirmed history a fluke, and 3 years of housing crisis the "norm".

Yes, housing prices got out of hand in the mid 2000's, mostly because all barriers of entry were removed and banks gave up the ghost and quit doing their jobs. But you can slice the numbers any way you like, homeowners have been benifiting from the slow and steady value appreciations of real estate for a few generations.

DC had farther to go than most because the RE here had been artificially "deflated for decades" and had some catching up to do, and DC's job mecca status of the nation keeps rentals and housing prices strong.

People who are sitting on the sidelines and hoping to buy my house from me again for ~$315K, thinking DC home prices are soon to be headed back there are sorely mistaken, but if you want to make me an offer of $1.3 Mil or above, we can talk:)

by anon123 on Aug 15, 2012 12:52 pm • link • report

@Jasper:

Yeah, that's what all realtors said. Until the housing bubbles burst. And now millions live in underwater houses.

Well, there certainly aren't millions of people in the DC area living in underwater houses.

But beyond that: so what? They still get to live in those houses. Just because they're worth less on paper (for now) than the owners owe on them, that doesn't make the housing any less valuable as a consumption good. Sure, it's hard to sell, and that's a big problem with buying something large, illiquid, and risky like housing.

But other than that and the psychological impact, these people still get the same deal they had when they first bought those houses.

by Gray on Aug 15, 2012 12:53 pm • link • report

This discussion of renting vs. owning is predicated on the two situations being interchangeable. Maybe the two ways of providing shelter do equally well keeping one's feet dry, but in many other less tangible comparisons (e.g., community involvement with schools), they are NOT the same.

by goldfish on Aug 15, 2012 1:04 pm • link • report

@goldfish: Or maybe you're confusing cause and effect.

The same family is probably just as likely to be heavily involved in neighborhood schools if they have bought or are renting. But wealthier, more stable families are both more likely to buy and more likely to be heavily involved in those schools.

by Gray on Aug 15, 2012 1:11 pm • link • report

@Jasper: Yeah, that's what all realtors said. Until the housing bubbles burst. And now millions live in underwater houses.

This is absolutely true, but not really as true in DC--as long as we're talking about actual-DC. If you actually bought in DC within half-a-mile of a metro station, you probably aren't living underwater. For Greater Greater Washington, though, depending on how far outside the core you stretch it, there are plenty of houses whose values collapsed.

I came to DC a little too late to buy while things were cheap, and now it seems it's a little outside my grasp, at least to live somewhere I'd want to live. With the very short supply of housing on the market right now, I expect that 20% down payments are pretty much a requirement, no?

by worthing on Aug 15, 2012 1:31 pm • link • report

@ Gray:Sure, it's hard to sell,

Impossible for most. And not being able to sell means not being able to move (to a better job elswhere). The economic impact is huge.

and that's a big problem with buying something large, illiquid, and risky like housing.

The problem being that people were told to buy because it was a sure bet to wealth.

But other than that and the psychological impact, these people still get the same deal they had when they first bought those houses.

Not if they don't have a fixed rate mortgage. And none-fixed mortgage are usually tagged to the LIBOR rate. And we all know how objective that is.

by Jasper on Aug 15, 2012 1:33 pm • link • report

@ worthing:This is absolutely true, but not really as true in DC--as long as we're talking about actual-DC. If you actually bought in DC within half-a-mile of a metro station

Sure, there is a minority of houses that are not underwater.

But please realize that "houses within half a mile of metro stations in DC" is a really small part of Greater Washington.

by Jasper on Aug 15, 2012 1:38 pm • link • report

Right, but the article is basically about DC and inside the beltway. Even take away my half-a-mile caveat, and it's one of the very few stable markets through this whole period.

by worthing on Aug 15, 2012 1:39 pm • link • report

I dont think using the past to predict the future of RE prices makes much sense - either using the collapse (which DID hit a few DC nabes) or the 1945 ti 2008 period (which nicely avoids the great Depression, and elides over some hiccups between 1945 and 2008) Basically if you know you want to stay somewhere a long time, want to make your own changes/renovations, etc, it makes sense to own. If not, maybe not. People should buy because they know thats where they want to live, not as a ticket to wealth.

The exception would be if they are placing a bet on a particular nabe they have good reason to think is undervalued. I wouldnt rule that out. By the same token, waiting a couple of years for the current overheated DC market to soften a bit might be a reasonable bet too.

by REgoesUpandDown on Aug 15, 2012 1:42 pm • link • report

@Worthing:

I came to DC a little too late to buy while things were cheap, and now it seems it's a little outside my grasp, at least to live somewhere I'd want to live. With the very short supply of housing on the market right now, I expect that 20% down payments are pretty much a requirement, no?

No, they're not. You can get an FHA loan with 3.5% down. You pay upfront and ongoing MI fees, but still: you can put 3.5% down.

If you go the conventional (Fannie or Freddie) route, you can get a loan with less than 20% down but will pay PMI. You can get a mortgage with 5% down up to the limit of $417K; over that and up to $625K is "jumbo conforming," and will require a down payment of 10%. Regardless, you'll pay no upfront MI fees but will pay some fixed monthly amount of PMI until you get your loan-to-value ratio down somewhere around 80%.

by Gray on Aug 15, 2012 1:43 pm • link • report

Re: Housing

Price is what you pay, value is what you get. Meaning, whether housing is a good investment depends entirely on the price for the house and the interest rate (the "price" for borrowing money). While it's debatable whether housing is a good investment right now, personally, I'm siding with Warren Buffet on this one:

Warren Buffett says along with equities, single-family homes are a very attractive investment right now.

Appearing live on CNBC's Squawk Box, Buffett tells Becky Quick he'd buy up "a couple hundred thousand" single family homes if it were practical to do so.

If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks. He advises buyers to take out a 30-year mortgage and refinance if rates go down.

http://www.cnbc.com/id/46538421/Warren_Buffett_on_CNBC_I_d_Buy_Up_A_Couple_Hundred_Thousand_Single_Family_Homes_If_I_Could

Of course, Buffet isn't the only smart money chasing homes right now:

Oliver Chang, the former head of U.S. housing strategy at Morgan Stanley, on Wednesday announced the opening of an investment firm that intends to spend up to $1 billion to acquire distressed, single-family homes over the next two years.

The new asset management firm will seek to acquire foreclosed homes across the United States with an eye toward operating them as rental properties.

Chang's move comes at a time when many hedge funds and private equity firms are raising money to acquire foreclosed homes with the intention of renting them out for several years before selling them as the housing recovery takes hold.

http://www.reuters.com/article/2012/08/01/us-fund-foreclosure-chang-idUSBRE8700QV20120801

The way Wall Street works is that they convince you that homes are the greatest investment in the world when they're selling you homes at bubble prices and then they convince you that housing is a terrible investment when they're buying homes after the crash.

by Falls Church on Aug 15, 2012 1:47 pm • link • report

Zillow reports 32.4% of DC homeowners are underwater.

by Drowning on Aug 15, 2012 1:48 pm • link • report

I expect that 20% down payments are pretty much a requirement, no?

If you can't afford to save 20%, then you can't afford to own a house.

by Old Skool on Aug 15, 2012 1:53 pm • link • report

@Drowning - ouch. Perhaps I stand corrected.

@Gray - thanks for the primer. I knew FHA and loans with PMI were options, but had heard some horror stories from friends about having difficulty qualifying even with good credit and minimal debt. Perhaps they also punched the loan officer or some other exacerbating detail.

by worthing on Aug 15, 2012 1:54 pm • link • report

In 2005, National Association of Realtors Chief Economist David Lereah released the book,
"Are You Missing the Real Estate Boom? Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade - and How to Profit From Them."

Interestingly, the title for the 2006 edition of the book was changed to:
"Why the Real Estate Boom Will Not Bust - and How You Can Profit From It."

Below are suggestions for subsequent title revisions in later editions of Lereah's book through 2015:

2007: "Why the Real Estate Boom Will Not Bust and How Foreclosures are Technically Part of the Continuing Real Estate Boom, In a Way."
2008: "Why the Real Estate Boom in Distressed Properties Will Not Bust (except in certain local markets) and How You Can Use Leverage to Profit From It."
2009: "Why the Phrase "Real Estate Boom" is Often Misunderstood to Mean Higher Prices and How You Can Pray for Them."
2010: "Why the Real Estate Boom Will Soon Bounce Back and How to Eventually Profit From It."
2011: "Why Did I Have to Write "The Real Estate Boom Will Not Bust Through the End of the Decade" and How Did I Not Realize How Long A Decade Really Is?"
2012: "Oh, Dear God, Please, Please Let the Real Estate Boom Bounce Back... and How You Can Profit From It."
2013: "Please, Please, Just Let the Real Estate Boom Come Back This One Time for This One House and How You Can Break Even From It."
2014: "Why I Am Willing to Accept a Small Loss of 35% On the Real Estate Boom and No Longer Care About How to Profit From It."
2015: "Why Can I Maybe Borrow a Couple Dollars Off You Until the Real Estate Bust is Over?"

by HGTV on Aug 15, 2012 1:58 pm • link • report

Re: 1964 NYT article about the future

Weren't we all supposed to be speaking Esperanto by now?
http://en.wikipedia.org/wiki/Esperanto

by watcher on Aug 15, 2012 2:03 pm • link • report

Homeowners of the same income as renters do get much more involved in the community in DC. Absolutely. A Lot more. Do some political legwork once and you'll be amazed how few renters even vote locally.

Home ownership was the traditional way American acquired equity. It's still a good deal even with lower current appreciation because of the tax deductions.

However American homeownership boomed after WWII with no-down-payment mortgages. 5% down was a little rougher and 10% hurt but 20% is a hardship for most. Not many can save that much.

by Tom Coumaris on Aug 15, 2012 2:59 pm • link • report

The funny, or sad, thing about the whole casino debate in nearly every state is that the casino industry, many years ago realized that it could best sell casinos by agreeing to limit them only to slot machines.

But the reality is that slot machines are where the casinos make their money! Table games cost money to run (dealers, other staff) and absent very high rollers, don't get much money churned through per hour. Poker can actually be a money loser for a casino since it has no stake in the game and only takes a % of the pot (before the big "poker boom" some Las Vegas casinos closed their poker rooms). The best scenario for a casino is that each table game player brings with him or her a slots player.

But the states feel like they are still holding something back by only allowing slots. "Its not a full casino, just slots, it will be OK" which is exactly what the operators want and which, incredibly, gives the state the games (slots and video poker) that have the highest rates of addiction. So the state gets all the problems associated with slot play, while handing the operators a license to run their most profitable games!

Yet one after another states fall for this. It boggles the mind quite frankly.

by dcdriver on Aug 15, 2012 3:27 pm • link • report

DC was quite affordable through most of the 90s, compared with many large cities. There was a boom 89-90 wherein prices doubled in some areas and then sharply fell. The second Barry administration and the threat of cabinet departments being axed under Gingrich pulled prices down further. Effects and circumstances varied somewhat by neighborhood. For example, the speculative runup on shells in Shaw-U Street probably slowed down development in those areas. OTOH, the long, slow gentrification of Capitol Hill that began in the 1960s seemed unaffected despite rising crime in the mid-90s. Overall, long periods of decline or stagnation like this obviously can happen and no one should assume otherwise, esp. given the lack of decline in DC and inner suburban house prices, in contrast to everywhere else in the country. Home ownership, including condo and esp, co-op ownership, requires long-term commitment to provide appreciation. In the end, fundamentals, like access to Metro, convenient shopping and restaurants (even if currently under developed), etc. will always be important, along with the underlying quality of the housing stock will be important to whether people make money.

by Rich on Aug 15, 2012 3:43 pm • link • report

Casino gambling had a boom in the 19th century. It quickly was subject to prohibition because of political corruption. It seems pretty ripe for that again given the saturation of many parts of the country and the gambling lobbies free spending with ledhislative campaigns.

by Rich on Aug 15, 2012 3:45 pm • link • report

Looking at this from the big picture, this seems like a win for Maryland. They get a casino, and half the revenue from said casino, as well as all of the jobs, and the negative externalities most people worry about (poor people wasting money, elderly blowing through SS checks), fall equally on DC and Virginia, as this casino is easily reachable from both.

by Kyle-w on Aug 15, 2012 4:32 pm • link • report

Speaking of negative externalities--

Maryland used to have a gambling pier in the river off the Colonial Beach, VA shore. With the demise of legal slots in MD Colonial Beach sort of died. Maybe some people at National Harbor remember this as that location is sure to get a lot of VA traffic.

by Tom Coumaris on Aug 15, 2012 4:56 pm • link • report

Slots make casinos money, but table games draw people in over the long term.

by selxic on Aug 15, 2012 7:09 pm • link • report

Rich,
Your history of real estate in this area over the last 25 years is spot on.

by Thayer-D on Aug 16, 2012 7:53 am • link • report