Friday Question of the Day


Today’s question(s) of the day is based on some recent NY Times articles. The first article I saw was titled It May Be Time to Think About Buying a House. They write:

“Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.”

This may be too simple or an impossible question to answer but do you think now is the time to buy?

Perhaps a bit more interesting – The second article from NYT was titled Location! Location! … Obama! They write:

“There have been a lot of potential buyers from Chicago quietly descending on Washington this month, according to real estate brokers. Multimillion-dollar homes have been snapped up in all-cash deals. First-time buyers have toured apartments in the fashionable neighborhoods of Logan Circle and the U Street corridor. Big-money donors have gone house-hunting in the upscale blocks of Kalorama and Georgetown.”


“Yes, change is coming to Washington — at least it in the real estate market, which is loosely segregated by both race and party, and thus subject to abrupt shifts in population every four or eight years.”


“Now as the Obama Democrats begin their move to Washington, they appear to be moving the center of power back to the district. Moneyed Democrats are still attracted to Georgetown and Kalorama, young families to Chevy Chase and Capitol Hill, and 20-somethings to Adams Morgan, U Street and Logan Circle.”

So I’m curious whether or not you agree with the above assessment? Do you think Washington’s neighborhoods are segregated by political affiliation? If so what neighborhoods do you think are associated with Republicans and Democrats? And if that’s the case – which neighborhoods have the Libertarians chosen?

27 Comment

  • I think the Republicans have scourned DC for the VA suburbs like McLean or Potomac. That said, my partner is a Realtor and has seen an uptick in interest in DC buyers. Most are looking to buy in the spring and no one has been directly related to the Obama administration.

    In a related note I heard a guy who is a social commentator on WTOP the other day saying that he thought DC was going to be the next “it” city in the next 10 years (think Seattle in the 90’s). He cited the Obama administration, the progress the city has made and ironically the development of NOMA as all reasons he came up with this conclusion. Anyone else have thoughts about that? If I had the money I would definitely invest in DC neighborhoods like Columbia Heights, Petworth, Bloomingdale or farther east like Brookland.

  • Hi Drewlove! I really DO run into you everywhere.

    I can’t say I’ve personally had a lot of direct Obama-transition business but I did see a significant increase in referrals after the election and had several listings go under contract. It’s one of the busier Novembers I can remember. I think there was a huge relief that the election was just over and people could go back to regular life. It also helps that interest rates have been nice and low.

    I’m thrilled that one of our company listings was included in the location, location, location article. (It’s a co-op, not a condo though, as was incorrectly stated).

  • Repubs are in Virginia, G-town, and upper NW (AU Park area). Dems are in Maryland and NW DC, and of course the rest of DC (85% dem or so in DC). Libertarians are out in Delmarva…

  • According to past election results, Spring Valley (near AU) is the most Republican part of DC.

  • No one can tell the future. But if you look at past RE values, you will find that they were stagnant for 10 years+ in NOVA before the big runup. I wouldn’t take too much thought to what some professional article writer says. If you want a house and find a nice one, buy it. But treat it as a house, not as an investment.

    As far as Obama people coming into town and buying everything in sight, it seems like a plausible theory but reality does not bear out that way. There will be a handful of deals, but not many. There will also be some GOPers getting out of town, but again – not many. Most of the turnover will be on the low end – people who don’t have the budget and/or desire to buy.

  • There are no “republican” areas of the DC area anymore other than Great Falls and the outer suburbs. Just because they are rich areas doesn’t mean they are republican, for those looking for a boogie man than doesn’t exist (at least the last two elections). Whoever said Gtown is just hoping for or projecting it… even they are as liberal as the day is long… if they were conservative they’d be living in VA

    As for the effect the Obama administration will have- I say negligible. I haven’t seen any evidence thusfar, and many of the Bushies will be moving out which will be a net neutral on the real estate market.

  • As far as whether or not now is the time to buy, the study cited in the NYT article lists this area as a “bubble market,” meaning that there is still some price correcting to be done. So if you’re buying to make a buck, you should probably forget about it. But if you’re buying for a place to live, it might be a good time.

  • Similar stories were written about the local real estate market during the transition from Clinton to Bush. Overall it seems to be overblown and extremely anecdotal. As with any other political party transition, there are quite a few people leaving town as well.

  • I think, if you can afford to buy now, then it is definitely a great time to be buying. If you are one of those, “shouldn’ts” you should probably avoid it. As obvious as that sounds, its clear a lot of people don’t get that.

  • This is probably an unanswerable question, but do any of the realtors (or anyone, really)on the chat feel like there is a particular neighborhood that is under-priced at the moment? I rent a house near Cardozo HS now and the house prices in my neighborhood, while not as high as they once were, still seem pretty high to me (in my totally layman’s opinion, FWIW). I’ve noticed that certain streets north of H st NE will have good looking housing stock on the market at a significant discount to similar homes 2 blocks south/east. Are there similar situations closer to the CH/Petworth/Ledroit Park/U St area?

  • Anarchists don’t usually buy houses.

  • On the first, the bubble has yet to burst in the District. There are some good deals out there now, but in almost all neigborhoods (aside from the Kaloramas and Georgetowns) there will be better deals in 12-18 months.

    Urban living is often embraced more strongly by liberals and Democrats (the Obamas of Hyde Park), while Republicans — who firmly support their right to drive huge SUVs — often end up in exurbs such as McLean (the Steve Schmidts and Karl Roves). It would be a big surprise to see too many of the Obama administration’s “dazzling urbanites” trade the perks of city life in for a big McMansion and 3 General Motors SUVs out in Potomac.

  • I think the DC market is strong. In terms of “it” markets, I think there are only three. DC. SF. NYC. DC being a little behind the other two.
    DC is so unique to me in that many of the jobs here are no where else. There are no comparable Pentagon/Homeland Security/FBI jobs. Add to that the artificial premium paid to employees with Security clearances. This is a great city to invest.

  • Uh, Nate, your assessment of NYC as the “it” city might be a little outdated given all that has happened this fall. Real estate there is falling off a cliff.

    As for DC, I think CP is right, but I would go further and say that prices in G-town and Kalorama will continue to fall as well — you’ll never get a great “deal” there, but I don’t think it will stay as pricey as it is right now.

    While the tone of the NYTimes article was bullish on real estate, I think anyone thinking of buying should look at one of the linked reports: The weakness of the report is that it looks at metropolitan areas as a whole but it says that someone buying today in the DC MSA will have on average $50,000 in negative equity by 2012. I think everyone agrees the District will fare much better than that average, but that’s still pretty striking.

    So if you look at the report you can conclude, yes, it’s a good time to buy…. in Pittsburgh, or Cleveland …. but not in DC, NYC, or California.

  • The DC bubble is still deflating. I enjoy reading this blog for the “good deal or not” posts, but it’s funny to me because the vast majority of these properties are not good deals. DC is still overvalued by historical standards. Housing prices are still not in line with incomes, especially in neighborhoods like Petworth. It’s simply unsustainable and prices will continue to decline for the next 12-18 months and likely remain flat for a period thereafter. Check the study referenced in the NYT article, DC homes are projected to accumulate NEGATIVE equity through 2012. Like the poster above indicated, now might be a good time to buy if you are looking for a home that you can occupy for the long term, but as an investment it is not time to buy. Of course with our government

  • (cont) printing so much money to pay for these bailouts we might be in for a hyper inflation scenario, so all bets are off.

  • NYC is an “it” city. People will always flock there. No matter how low the pay. No matter how hard the living. It is an international city. People with big money will always have a place there. From the Russian oil tycoon to the Saudi royalty, no other American city can hold a candle to NYC.

    When you look at class A office rental rates (a good barometer of “it” cities), NYC is in a class by itself. DC and SF are a close #2. Same for residential rentals. Rent in DC have not fallen much if at all.

    For the record, it is in my best interest if prices continue to fall for the next 5 years or so. I’m looking to buy as much as I can afford. I have a 10-12 year horizon. In that time, I think DC will be much improved…

  • There are so many problems with using this article as the basis for whether, and where, to buy a house. Forst off, Washington, DC is not the same as the DC metropolitan area. Housing prices have been much more stable in DC proper than they have in the suburbs, which are part of the MSA. Further, within DC itself there are dramatic differences in the relative value of a house. Any estimation of the amount of equity one has after 4 years is ludicrous when you consider that a single family home can be gotten for anywhere between $200K and $2 million in DC.

    This article reflects an “analysis” (and one must take with a grain of salt any economic treatise which considers itself to be based more in science than in guesswork) in broad strokes.

    I think it’s a great time to buy in DC. There are great deals out there that are very unlikely to be worth less in four years. When you consider factors such as gentrification, proximity to transportation and services, single family vs. condo, and so on, it’s easy to figure out what’s a good value.

    But that certainly doesn’t mean every house is a great deal — and just because every house isn’t a good deal or it’s a declining market MSA-wide, doesn’t mean that it’s not still a great time to find a good value that will likely appreciate in that same timeframe. That’s the nature of being a good investor – it’s using your own knowledge to pick out the deals. And the worse off things are overall, the better the opportunity for someone who knows something about the area they’re looking at to find a bargain.

  • this time is undoubtedly the best time to buy. A friend of mine is trying to purchase a single family home in Bethesda in the $400s. It needs updating and a basement bathroom, but THAT’S ALL IT NEEDS to get you in Bethesda.

  • …and for once I agree with Nate. I’m looking to buy as much as I can over the next couple years. Even if prices decline somewhat, houses at the low end of the market are very unlikely to go down that much more in absolute dollars… but in gentrifying areas they are definitely ripe to appreciate more than inflation in the long term.

  • who firmly support their right to drive huge SUVs — often end up in exurbs such as McLean (the Steve Schmidts and Karl Roves).

    when Karl Rove moved to DC, he lived in AU Park. I no longer remember the address, but we filled up the car and drove by. I know I took Van Ness across the city and made some turns… I seem to remember that he could have walked to Meet the Press if he wanted to.

  • Glad I have another year or so to save. Ha!

  • Might have been temporary housing, Neener. He’s lived in McLean (and sent the kids to school there) for quite some time now.

    Interesting that he was in the District for a time, though. Rains on my generalization a bit.

  • HAHAHA to whoever said that mclean is an EXURB. jeeeze people. its inside the damn beltway for god’s sakes.

    you want exurbs? try far PW county or frederick MD.

  • Karl Rove lived at 4925 Weaver Terrace NW in DC off Loughboro Rd well into 2005. He was at that address for a minimum of 5 years of this administration. I don’t know when he moved, but he was there in DC for years. I definitely know this for a fact.

    Call the neighborhood AU Park or call it Palisades, it’s still where he lived for a long time.

  • that’s Kent, folks.

    check the graphic on this site for confirmation.

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