A very interesting debate in the comments section of the Northern Virginia Housing Bubble Fallout Blog over whether Arlington prices, which have held up reasonably well post-bubble, are likely to fall due to the "substitution effect". With housing prices having plummeted in the outer suburbs, will home buyers, for example, decide to buy a 200K home in Prince William County instead of a 700K home in close-in Arlington?
My best guess, despite being an Arlington homeowner, is that Arlington is due for a fall. Arlington has many advantages, and the disproportionate rise in Arlington prices has some legitimate reasons, including how much nicer and safer DC has become, reasonably wise development policies in Arlington, and the general trend toward Yuppies wanting a more urban experience. But Arlington also has uneven schools, older housing stock, small lots, very high prices, and nasty traffic problems for those who need to commute west (like my brother-in-law, who spent an hour each way driving from Courthouse to Fairfax City each day, a fifteen to twenty-minute drive with no traffic), where the high-tech companies are located. At some point, marginal buyers will prefer neighborhoods in the outer burbs where prices are at 2002 levels (down 50% or so from the peak) to neighborhoods in Arlington where prices are still at 2004 levels (down 10-15% from the peak).
UPDATE: A major reason prices have fallen so hard in the outer 'burbs, but not Arlington, is the much great incidence of foreclosures in the former. Foreclosures, and for that matter short sales, have dragged down the prices of "normal" sales, creating what may turn out to be short-lived bargains. If I were buying for investment now, it strikes me that an 80K townhouse in Manassas or Dumfries that could be rented for $1,200 a month is a much better deal than an $800K house in Arlington that rents for $3,200.
Hey, they're still trying to weasel their way around the decision in Heller; I don't know where the "safer" comes from; at best it's relative, while the overall level of danger is still high relative to most other cities, and I'd rather live somewhere I'm allowed to practically defend myself against thuggery.
Is the much cited Case-Schiller index useful to follow? Can you use it for information about more circumscribed parts of a metropolitan area (e.g., Montgomery County or Bethesda)rather than the whole enchilada (e.g., Washington MSA)?
I ask these questions as someone on the buying side, hesitant to make a move before the end of the year at the earliest, notwithstanding assurances that these particular neighborhoods have held and will hold value even as some other parts of the metropolitan area continue to decline. And there is a friend who just today was telling me that prices are indeed falling around here.
The foreclosures are a double-edged sword; neighborhoods with a lot of foreclosures aren't as nice.
The real issue in Arlington is whether NoVa representatives will continue to be able to block DC's attempt to create a commuter tax, which will severely disadvantage the close-in suburbs relative to DC.
Neurodoc, if I were you, I would rent, but if you really want to buy, there's a great 1400-sq-ft condo in my building in Arlington (across the street from the George Mason Law Metro stop) on sale for only $600,000 when comparable places in the neighborhood are going for about $700,000.
1) Does not differentiate 22207/Orange Line from the rest of Arlington (if Arlington is down 10% on average, and the rest of Arlington (i.e. 22204) is tanking, then 22205/Orange Line SFH market is X).
2) "Uneven schools" at least at the elementary level are not in the above areas.
3) Anyone who works in Fairfax and lives in Courthouse is making decisions for other than real estate value.
4) The people who work in DC who live in the basic Arlington starter house--i.e. folks ranging from perhaps second year associates to junior partners without kids or with perhaps 1 kid, and their hill and association equivalents--simply do not live in even Fairfax, let along Loudon or PWC. Seriously, for the many law firm readers on here, how many associates live anywhere outside the beltway? The percentage is incredibly small.
18% yield on a house denominated in $, a rising currency? (I'm in Europe.)
Where do I sign up?
Apparently, Maryland helped up better and longer than No. Va., but is now going down rapidly, with the exception of a few close-in neighborhoods, which I would put in the same general category as Arlington.
As for "assurances," the only assurance worth anything is someone willing to buy back your house for what you paid for it in 2-5 years. Anyone who gives you an "assurance" but doesn't back it up with cash isn't worth listening to. And FWIW, real estate agents have given me consistently awful advice; e.g., back in 1995, several told me that the worst thing to buy in No. Va. was a townhouse in Arlington. In 2005, it was "prices will go up 1% a month indefinitely."
If the 3rd worst school district in one's state happens to have gorgeous Arts &Crafts homes for 1/3 the cost of identical homes 5 miles away in the expensive town with "good schools", you can make out like a bandit.
But buying a house in Front Royal because it is a bit cheaper isn't really practical for most of the above - unless perhaps, you work in Tysons.
This is true for those who have the insight to see it. However, in for example Silicon Valley, people will pay insane premiums (well over a million dollars) to live in towns with what they perceive to be better schools. Cupertino, with public schools second only to Palo Alto, experienced quite a boom as ethnic Chinese moved in, partly for fear of what the Chinese takeover of Hong Kong would bring.
However, among the items that I notice are correlated with bad public schools are:
crime
bad neighbors
poorly maintained homes/yards
poor government services (police, fire, sanitation)
If I were single or a DINK, I think I'd be much more eager to snap up that arts and crafts home that's near cool things and 30% less than the place in the burbs.
Gainesville must be in the developers' sweet spot based on the various considerations in the comments above - far enough out that the inner-burb price premium is dissipated, but close enough in to be workable if your job is in DC or perhaps elsewhere in NOVA. And they're building a big new cloverleaf between Rt 29 and I-66 there. The huge downside is that you have to deal with I-66 traffic every day, but apparently enough people are willing to grit their teeth and bear it. I don't think I could do it.
Front Royal was obviously somewhat tongue in cheek, but I wouldn't consider Great Falls as an outer suburb. It's less than 20 miles from the city, closer than other places that are considered inner suburbs like Rockville, Gaithersburg, parts of Alexandria, Springfield, etc. You were talking originally about Prince William County, Manassas and Dumfries. All much further out, and closer to a normal definition of outer suburb.
Of course, my hip urban friends in DC regard anything over the Potomac as indistinguishable from driving to Richmond. They'll tolerate Arlington only about as far as Courthouse, and only then because it has an Apple Store.
I'm having trouble parsing this. What's the "historical mean" oil price? Also, does this statement imply that only shocks cause price increases?
Rent, don't buy. Nominal housing prices will continue to decrease for at least two more years. Renting is still much cheaper than buying in most places. Why hold a declining asset, that you have to pay taxes on, and pay for repairs and maintenance. Your landlord bears, market risk, fire risk, flood risk etc. Not only that, if you should want to change locations, selling a house could be problematical.
Problematical? No. Problematicalishesque? Maybe.
Well, didn't the professionals who deal in mortgages gorge on the subprimes? Folks like Bear Sterns, Merrill Lynch, City Bank, and Countyrwide? That sure shows how sharp they are. Maybe it's time for a bit of amateurish common sense.
In all of the expensive metropolitan areas of the Northeast and coastal California, desirable central city and inner suburban neighborhoods have held up well, while outer suburbs and undesirable inner city neighborhoods have been hit hard by the combination of past subprime lending and speculator involvement, and current weakness in the economy. We are at a point where the price differential between the inner and outer suburbs has expanded so greatly that some buyers will shift their preferences. People who work in downtown DC may grit their teeth and buy homes in close in neighborhoods, but most of the jobs in any large metropolitan area, including DC are located outside the central city. Without making a prediction about the absolute direction of home prices in Arlington, I can't imagine how prices there will do as well as those in the outer suburbs. Maybe $200/bbl oil?
Neurodoc-Anyone who tells you he/she "knows" whether it's beter to buy a house today or six months from now is kidding themselves. I certainly don't see any rush to go house hunting, given the relative overperformance of prestigious suburbs these past couple of years (see above paragraph) and because I think the housing market nationally has more problems to overcome (but see above sentence).
Tony Tutins, I agree with you about the importance of public schools on housing prices but some of your facts about Cupertino are incorrect. Most of the Chinese there are Taiwanese, not Hong Kong, and are engineers who cae here for graduate school and then work. Also, given the trends in H1-B visa issuance in recent years, it is not surprising that Cupertino's population is rapidly shifting toward Indian immigrants.
"In all of the expensive metropolitan areas of the Northeast and coastal California, desirable central city and inner suburban neighborhoods have held up well,..."
That's true because the owners have generally been there longer, have better credit ratings and the neighborhoods are well established. On the other hand, places like Antioch CA are a disaster. But those desirable central city and inner suburban neighborhoods also enjoyed a tremendous run up in prices in the last 5 years unjustified by fundamentals. They too must come down for a variety of reasons. Many of the recent buyers in those desirable places will find themselves underwater next year. While they generally don't have sub prime mortgages, they do have option ARMs. They must because by 2005 and 2006 that's the only way even people with good credit could buy in and, let's face it, there are not that many rich people. Moreover, prices are sticky because sellers stubbornly cling to the prices they heard about during the peak years. And nearly everyone thinks he lives in a place that's somehow "different." I heard that a lot two years ago in Napa. "This is wine country, everyone wants to live here." "Prices won't go down." They did. So let's not be deceived. Those areas that have "held up well" will go down too.
Interesting observation. Perhaps we could convince Maryland to solve the "DC voting rights" problem through retrocession if we sweetened the pot by tossing Arlington County into the mix. DC would get the representation they desire, and Arlington County could stop feeling uneasy about its association with the rest of the Commonwealth.
The only thing keeping prices up is the horrible traffic. I live in Gaithersburg, and while housing prices in the nice areas have fallen 15% to 20% from the peak (i.e. townhouses that once listed for $575k can be had for $480k), the sub-hour commute into DC/Bethesda/Chevy Chase is a winner. Same for Tysons and even Reston. If we had better public transportation or sane road spending, I would expect closer-in suburbs prices to fall.
I agree with others who do not consider courthouse to be a suburb. You walk across the bridge into DC! Its a 10 minute metro ride. Living in Courthouse, Ballston, etc is city living - nice city living, at that. don't let the DC line fool you.
The biggest price declines are Frederick, Manassas, Ashburn, Sterling - completely suburban living experiences, no social life, and horrible commutes.
Professor Bernstein and Paul B, I realize there are no meaningful assurances to be had, hence my "notwithstanding assurances," and least of all by real estate agents who advise that prices always come back up.
What I was hoping for, and still seeking, are suggestions about how to stay informed about local (e.g., Bethesda and Chevy Chase, MD) price trends. While helpful to read about what is doing nationally and in various major metropolitan areas, I find that less useful information than what I would like to have. Where does one find more informative data than that which looks at prices over a fairly wide geographic swath (e.g., Montgomery County) and for homes varying from $200-300K range up to $2-3M bracket? Can one tease anything out of Case-Shiller that are practical for "micro" application?
And does it appear that increased interest costs and difficulty get "jumbo" mortgages are working against sellers?
Re Great Falls: some fabulous properties, but talk about commuting issues, the only way in and out is Old Georgetown Pike (Rte 193), a charming, winding road with only one lane each day that is jammed heading toward DC for hours on weekday mornings and hours at the end of the day going in the opposite direction.
Professor Bernstein and Paul B, I realize there are no meaningful assurances to be had, hence my "notwithstanding assurances," and least of all by real estate agents who advise that prices always come back up.
What I was hoping for, and still seeking, are suggestions about how to stay informed about local (e.g., Bethesda and Chevy Chase, MD) price trends. While helpful to read about what is doing nationally and in various major metropolitan areas, I find that less useful information than what I would like to have. Where does one find more informative data than that which looks at prices over a fairly wide geographic swath (e.g., Montgomery County) and for homes varying from $200-300K range up to $2-3M bracket? Can one tease anything out of Case-Shiller that are practical for "micro" application?
And does it appear that increased interest costs and difficulty get "jumbo" mortgages are working against sellers?
Re Great Falls: some fabulous properties, but talk about commuting issues, the only way in and out is Old Georgetown Pike (Rte 193), a charming, winding road with only one lane each way that is jammed heading toward DC for hours on weekday mornings and hours at the end of the day going in the opposite direction.
When I was in your area about two years ago, I had no trouble renting a house. You might even get one on a long-term lease. Do you need to sell your condo in order to buy? As for historical price data, try zillow. Pick a zip code or a specific address and it will give historical price data for that house and the zip code for 10 years back.
Try this. I think there are plenty of upscale homes for rent here.
Zillow - yes, a friend was making comparisons between Zillow's estimate of values and what properties around us are being listed at. But how reliable an estimate of value does Zillow provide? Isn't Zillow more a guestimator that gives you a sense of what the property might be worth, or what it was worth at a former time, but is it very useful for comparison purposes? Are there other data sources that will give a sense of how house prices in particular neighborhoods are doing, sparing one time and energy in more laborious, and perhaps less reliable, approaches?
Uthaw, I have relied on our agent to bring properties to our attention, but they have all been ones for sale. Thanks for the link, I'll see what is out there for rent, and maybe I will find out I am wrong about the rental market for better houses. (Don't really want to have more than one move ahead of me in the next 5 or more years, but pressure is building to do something now, even though I am less sanguine that some very sophisticated real estate investors in my circle.)
Anyone believe that with a new administration, new people show up in Washington with a need for housing, and that works to push up prices here?
Finally, haven't there been some indices created of real estate (commercial or residential?) that allow bets to be placed on the direction prices will take? Anybody know anything about them? I would be interesting to see what was doing with them and how good they proved over time at predicting prices.
There are a fair number of us big-firm associates outside the Beltway on the Maryland side. In part, this is because the Red Line goes well beyond the Beltway; from where I live in Rockville, a half-hour train ride gets me to Metro Center. Also, my biased and anecdotal impression is that MD traffic isn't quite as bad as VA's, either, because we're not bottlenecked on bridges. I-270 is bad at rush hour, but if you live in outside-the-Beltway Rockville, Kensington, Silver Spring, etc., you have decent surface routes--16th Street is pretty quick at morning rush.
However, at most DC law firms, Marylanders do seem to be in the minority.
Are you referring to Washington, DC?
For the particulars, let us go here.
You get the idea. That comment is silly &absurd. Arlington prices are high precisely because the District is awful.
If I were in your shoes (looking for a single family home for potentially long term), I'd not worry about Case-Shiller, derivatives for projecting prices,Zillow, and who's going to win the election.
Get yourself a good real estate agent, let her/him know that you're serious about buying, and don't be afraid to look at lots of homes in your target area. I guarantee that if you do that, you'll recognize the right home as soon as you see it.
The problem with the Schiller index is that it only compares actual sales, and this distorts the index down, because, e.g., if a house was sold in 2007 and resold in 2008, it is almost certainly a foreclosure, and in God-knows-what condition.
Statements like this really hurt your credibility, and make me wonder how many wealthy people, or law firm partners, you actually know. Time is, in general, EVERYTHING to these people...and I have heard many a partner grumble on enough occasions how far Great Falls or Potomac is, let alone LEESBURG...come on. Seriously, how many Hogan, Wilmer, Covington, A&P partners TOTAL live past Great Falls, who don't generally spend some time in the Tyson's office...
Obviously to someone who is stretching and whose self-worth is tied up into the size of their house, Leesburg is a possibility...but even to strivers, a $2 million house by Langly is worth more than a $2 million house in Leesburg.
Which Marion Barry years?
Otherwise, you do realize crime in DC is holding pretty steady, right? (the violent-crime rate in Washington is 1,633 per 100,000 residents — 3.3 times the national rate. D.C.’s murder rate is more than eight times higher than the rest of the country; its robbery rate is 4.6 times higher.)
I only pointed out increases since last year as a benchmark. In fact, In 2002, Washington, D.C. was the murder capital.
From 1988-1998 DC had the highest murder rate of any large city.
I think you should just admit what you said was wrong and move on. There is much more to DC than Logan Circle.
Leesburg is just as expensive as Fairfax.
You really don't know much about this topic.
But here's the point: Leesburg has gone down A LOT in the last three years. Great Falls less. And DC even less, if at all. Leesburg has therefore become relatively more attractive to the MARGINAL buyer (those who MUST live in DC, or who insist on being in the Langley school district, and so on, are not the marginal buyer in this context). And prices are set at the margin.
Doesn't mean law firm partners who work in DC will move there, but there are plenty of people who make decent money who could, for example, live in either Great Falls or Leesburg (you know there is more office space in Tysons than in all of DC, right? and that the high tech companies are mainly near Dulles, not in DC, right? there's a lot going on in the DC area besides the legal profession. I'm sure no one can be so provincial as to think that real estate prices in the entire DC metro area are set solely by partners at big DC law firms.) If the marginal buyer moves to Leesburg instead of Great Falls, that reduces demand in Great Falls, which then becomes relatively attractive to the marginal buyer considering whether to live in Great Falls or closer in.
This is basic economics, folks, but continue to live in virtual reality if you want. I should note that I'm NOT saying that close-in prices will go down as much as prices in the outer suburbs. There are real advantages to living close-in, and, as pointed out, there are some people who will ONLY live close-in, almost regardless of price discrepancies, which sets something of a floor on close-in prices. But the idea that prices can stay up close-in indefinitely while plummeting further out strikes me as unsound.
And "The Ace," the hipsters who live in Arlington are going to visit their friends in places like Capitol Hill and Logan Circle, which are much, much, nicer and safer than they used to be. Still not nice enough and safe enough for you? Not my cup of tea, either; I wouldn't live in DC in general, having had some bad experiences there in my youth. But the absolute rate of crime doesn't tell you ANYTHING about whether it's BETTER and therefore more desireable than it used to be.
I think you are arguing a strawman here. "Law Firm Partners" is an example being used for the large class of busy and well compensated professionals able to afford pricey housing whose jobs tie them to the District. Our point is not that lawyers per se drive the market, rather that professionals of that type do drive the market and they don't consider Leesburg a good substitute for a house in the inner suburbs (such as Alexandria, Falls Church or Great Falls), or better yet, a house in the nicer urban areas, such as Foxhall Road, Cathedral Heights, Chevy Chase DC, or Arlington. The reason is simple: the commuting time is too stressful.
The question of supply and demand in real estate like any other limited good is whether locally there is enough demand to satisfy local supply. I'd argue that local demand is kept more-or-less satisfied because your far out suburbs aren't a good substitute. It may be that some marginal buyers, or buyers with only marginal ties to the city (reverse commuters, or those with jobs that can easily relocate) will substitute. But many simply cannot or will not because the savings in dollars isn't worth losing 1.5 hours a day in limited time to sleep or spend time with the family. As long as there are enough of the latter to actually make bids on the limited supply of desirable close-in housing, the price won't go down even if some marginal buyers aren't bidding because they are substituting for housing the less marginal buyers aren't interested in.
Hilarious,
Also, read this chat, here is just a taste:
But the absolute rate of crime doesn't tell you ANYTHING about whether it's BETTER and therefore more desireable than it used to be.
Please. Your perceptions are not reality. I'm posting actual statistics and news items and you are posting your perceptions. It is an absolute fact the crime rate has not fallen.
The person saying that is wrong. There is a development just outside of Leesburg off of Evergreen Mills road where there are 10-15K sq ft homes on 1 acre lots.
Those are all rich people living there.
Now I don't know what you would like to compare that to, but "safer" is certainly not an apt adjective. That would be like me saying a bully is "nicer" because he used to hit you in the face each day, but now he only kicks you in the groin.
Fairfax county Estimated median house/condo value in 2005: $416,916
Here is Leesburg for 2007: Median home price $ 419,900
I couldn't find more recent for FFX. But they are comparable.
And an article from last year:
To add my own 2 cents, I moved from Clarendon to Ashburn earlier this year. All they are doing is building all around me. Time will tell if that is wise, but people are buying all of these new places. The SF homes in my area are selling between 500-750 K. Rather briskly.
So, I'm asking both a narrow question - what do those who know the area predict for prices in the more desirable in close Maryland neighborhoods (Bethesda and Chevy Chase); and a more general one - what is the most effective/ efficient way of figuring out how prices are trending for an area of interest in order to make a "buy now" versus "wait 4 to 6 more months and reassess" decision.
Paul B., we have a good real estate agent and have started looking. Don't you think, though, that real estate agents generally tend to optimism when projecting the direction of housing prices? Do you know many (any?) who would ever say prices are likely to go down further and not start to recover for another 18 months? I think agents may be helpful with respect to relative values, that is comparisons between houses presently on the market, but they must be the most biased of forecasters.
Professor Bernstein, if Case-Shiller distorts because foreclosure sales make things look bleaker than they really are for non-distressed sellers, then what is a more reliable indicator? Are there any breakouts according to price range, since declines in prices may be much greater or lower in different price strata? How good/bad is Zillow for tracking purposes? You have chosen VA over MD, but care to muse about this (MD) side of the river? Do you think, for example, that as McLean goes, so too go Bethesda and Chevy Chase, or are they different markets that move independently of one another though not all that far apart and similarly upscale?
If we were to bet on our predictions 6-12 months out of price trends in particular neighborhoods, what could we use to settle the bet when the time came? I will wager you $X that prices go up/down Y% over the next year in this neighborhood, but how exactly will we determine the winner of the bet a year from now? Look at what the Washington Post shows from time to time about average home sale prices by zip codes? We just figure that the homes sold in one period are roughly comparable to those sold in an earlier period?
I agree with Prof. Bernstein that Capitol Hill, Logan Circle, etc., are much nicer and more desirable than they used to be. You can argue statistics, but I think he is right that compared to, say, the 80s, the perception of crime in those areas is much lower, and they have been nicely developed with new restaurants, bars, movie houses, etc. They are nice places to live and be now. This is a real effect, and it makes them attractive to urban hipsters.
Unfortunately, schools in DC have not similarly improved. So young hipsters are faced with a choice: spend a massive amount of their income on private school, or move to the suburbs. Many will forsake being downtown and pick the latter, whereupon they then have a further choice of urban adjuncts to the city (Arlington, Silver Spring, etc), close suburbs (Falls Church, Alexandria etc.) or living way in the boonies like Leesburg. Prof. Bernstein thinks they will leap all the way to Leesburg in order to afford a bigger house and a helicopter to fly to work every day. I don't think that is likely for many and as a consequence demand will remain fairly steady for desirable housing in the inner suburbs and nice urban areas that closely adjoin the city.
Before buying check out the foreclosures and notices of defaults (foreclosureradar.com) in the area. Even a single foreclosure within a mile of a house can bring down it's market value.
Here is a list of due diligence items for buying a house. In addition I do the following.
1. Do a "flyover" with Google Earth to check out the area.
2. Go to Craigs List to get a sense of the asking prices and rents in the area.
3. Go to the FEMA website to check for toxic waste sites etc.
4. Instead of (3) go to propertyshark.com and the same and more information. Note it covers the DC area.
So how come New Jersey has all the toxic waste dumps and DC has all the lawyers? They flipped a coin and New Jersey won.
The crime is reduced from the early 1990s, but I think it still remains at an unacceptably high level.
"... spend a massive amount of their income on private school..."
Isn't it funny how people who are opposed to segregated school systems, want them when it comes to their own children? DC spends as much or more on public schools per pupil than say Oakton VA. Yet people will move from DC to Oakton for the schools.
I think what you're actually saying is "parts of DC are nice and safer than the Barry years."
Because the crime data do not indicate DC as a whole is any safer than the Barry years. The crime rate has held pretty steady over the last 2 decades. You simply can not point to any crime statistic demonstrating that the current (2008 or 2007) crime rates in DC are any lower than in 1988 or 1978.
it still doesn't in any way rebut the point that one reason DC and close in neighborhoods are more valuable today is that DC is a better city today than it was in the early 90s.
I would argue you are wrong because not only could you produce no data suggesting what you're saying is true, but that the property values of the surrounding areas are going up because people are fleeing the District.
Another fact,
That is the reason for the increase in prices. People are leaving an area that is unsafe for ones that are safer and have lower taxes.
Neuro, we looked in Maryland last year, and came to the conclusion that the Cabin John vicinity was a much better value than Chevy Chase or Bethesda.
Do you read what you link to? For your support of the crime rate holding steady for the past two decades, you provided a link to a site that shows that DC's murder rate went from a low of approx. 20/100k per yr. in 1985 to 80/100k in 1992 to 35.4/100k per yr. in 2005. As the graph clearly shows, there was a massive (almost quadrupling) in the murder rate between 1985-1992, and a steep decline from 1997 on with recent leveling. If one side of a mountain is sea level, and another side of the mountain is sea level, it does not follow that the ground is "pretty steady" in between.
Again, this is a bad habit you have.
AI! AI! AI! AI!
BRAAAAAAALAAAAAAAHAHAHAHAAAAAAAA!!!!!
(Thanks for the soccer fields, Gringos.)
Eventually real estate markets will return to equilibrium, but it's going to take a while longer and in many places the bottom will be below what makes rational economic sense (just like the top was). So if you time it right and can get (and finance) an investment townhouse in Prince William County for $80,000 and can afford to carry it for 5 years, you may look like the sharpest knife in the drawer in the long run.
Long-term trends in the D.C. region are going to depend in large part on ease of getting to one's job. Arlington will be attractive to yupscale professionals only as long as D.C.'s professional and government sectors continue to boom. If there is a significant Federal retrenchment in the next administration (which could happen given economic and budget realities), Arlington absolutely will stagnate.
Conversely, as telecommuting options continue to improve for knowledge workers, the length of one's surface commute to the office will become less critical. For example, the Patent and Trademark Office has been running a generally successful telecommuting experiment that has caused many participants to disperse to the Shenandoah Valley, southern Pennsylvania, and beyond. If teleworking continues to take off, eventually peak hours commuting pressure on the highway system may ease -- and based on how much easier D.C.-area commuting currently is during summer vacation season, the marginal decrease of vehicles on the roads doesn't have to be that great to make a huge difference in traffic flows.
Speaking personally, I'll take a nice house on 5 quiet wooded acres in Clifton or Fairfax Station for the same price as that upscale Roslyn or Ballston condo any day. Or at least as long as my broadband connection is working.
Sadly, I think we can safely bet that the size of the federal government isn't going to shrink.
Ever.
A. Zarkov, thanks for the suggestions as to due diligence. I am pretty confident that we are not looking at any places that sit on a toxic dump site, though people living in very fancy homes around American University have found unexploded ordinance from WWI in their back yards. (It seems there was some precursor to Aberdeen there almost 90 or so years ago.) Have never looked at Craig's List for anything, and would really be surprised to see anyone hawking properties going for 7 figures there, but will check it out. (Advertising property on Craig's List doesn't impart the same cachet as a Sotheby's or Christie's sign.)
The crime stats for Fairfax went up significantly in the same period.
Is there any move afoot to do a "Prince George's County" in Fairfax or Arlington?
Likely it could have the same salutary effect on crime and house prices.
Of course, this immigrant diaspora from Prince William is one of the reasons David B. can invest in a former $300,000 townhouse in Manassas or Dumfries for only $80,000.
Inventory on the Hill is low, and prices are still quite high. Why? Mostly because people have discovered its' a great neighborhood. We have many empty nesters moving on to the hill because they don't care how bad the school since their children are all grown up, and they want to walk places, know their neighbors and have time to see theater and the museums.
Crime peaked on the Hill during the Barry years, and has been low ever since.
So sorry, Ace, but once again you are in the wrong! But I'm sure you know a lot more about my neighborhood than I do, so please blog away.....