patrick.net

These cities have people with massive wealth including the native born and foreigners who have abandoned interest paying instruments and have put their money into real estate because of very low mortgage rates. Prices will drop precipitously if and when interest rates on five year certificates of deposit exceed 6% and mortgage rates approach the 100 year average rate -- the mentality in these cities is that this will never happen and the people betting on real estate may be right on.

DC will stay strong as long as government spending remains high.

DC is different not so much due to the demand but due to restrictions on supply. There are height restrictions put into place about 100 or so years ago to maintain the view of federal buildings. So if builders can't build the only thing to do is to raise rents.

Technically there might not be a ban on building down..but going beyond a few stories and it would be odd.

SF is a odd market
http://www.deptofnumbers.com/asking-prices/california/san-francisco/
"The median asking price for homes in San Francisco peaked in May 2006 at $668,570 and is now $277,920 (41.6%) lower."

But the inventory is pretty low...really low..less than half from the peak are on the market.

mdovell says

"The median asking price for homes in San Francisco peaked in May 2006 at $668,570 and is now $277,920 (41.6%) lower."

Putting condos and SFH together is not helpful. Median price for SFH is not anywhere near 277K, not even in the most dangerous neighborhoods.

BigChiefEugene says

These cities have people with massive wealth including the native born and foreigners who have abandoned interest paying instruments and have put their money into real estate because of very low mortgage rates

Last week we put an offer in on a 3/2 SFH. 30K above asking, and we were completely bid out of the water by Chinese investors with all cash and no contingencies. On the market last Wednesday, pending today with 15 offers in 4 days. Not a shi-shi neighborhood, either.