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.

Realtors Are Corrupt says

4 outer boroughs

I grew up in Manhattan and now live in SF. Comparing the boroughs to Manhattan is as ridiculous as comparing all of the East Bay to San Francisco.

I could buy a house pretty cheap if I wanted to live in Vallejo or Richmond or the Bronx or Queens.

Apples and oranges.

1sfrenter says

I grew up in Manhattan and now live in SF. Comparing the boroughs to Manhattan is as ridiculous as comparing all of the East Bay to San Francisco.
I could buy a house pretty cheap if I wanted to live in Vallejo or Richmond or the Bronx or Queens.
Apples and oranges.

Don't know much about SF, but you're right about NYC. Manhattan will never take a pounding of any significance. It is Wall Streets home, and is jam packed with rich people. The outer buroughs will see declines, but no where near as bad as the Western States or Florida did. NYC is a world city, which means the international elite will always want a place there. Its only real threat to real estate is global warming.

Funny you should ask.... Wifey and our where out and about today hiking in "The Hills" (as the locals like to say, as if Los Altos Hills is some kind of stellar place. The assumption is calling it "The Hills" is equating the area to "Beverely hills" or something... sorry I digress..

We so a WHOLE bunch of "Preview" and "Open House" signs, up in the Hills, west side of 280. I think something is afoot....

Even Beverly Hills and Malibu fell by +40% .. it was back when 90210 was the big hit on TV. Little did many across the nation know that home prices fell like bricks.

http://articles.latimes.com/1994-11-21/news/mn-9_1_santa-monica-mountains/2

At Beverly Park, a gated development scarcely a mile east near Coldwater Canyon Boulevard, basketball great Magic Johnson, Walt Disney Co. Chairman Michael Eisner, rocker Rod Stewart, six Indonesian businessmen, one Saudi prince and several Westsiders like California Pizza Kitchen co-founder Larry Flax own much bigger estates or lots. Homes still range in price up to $10 million, but developer Brian Adler said that two-acre lots once going for $4.5 million can now be had for $2.3 million. Bargain-pricing seems to work. A majority of the 64 two-acre lots he graded at the market's peak have lain vacant for four years.

It's starting to happen in LA, we just need 6 mortgage rates and it's all over.

I think he means 6%

Oil Can says

It's starting to happen in LA, we just need 6% mortgage rates and it's all over.

Don't look for 6% interest rates anytime soon. The only reason the fed raises interest rates is to try to slow down an over heated economy, and the economy is pretty dead right now. I don't foresee-higher interest rates for at least 5 more years and more like 10 years before rates hit 6% again.

Those Cities always were expensive. I remember my brother turning down a job in LA after serving in the Army back in '85 because the cost of living was triple what it was in South Florida.

I remember in NYC in the 80's even when NYC had a shady reputation, and the rest of the Country thought New Yorkers were rude. Even when NYC was a Shithole by most of Americas standards NYC was still the most expensive piece of Real Estate you could buy. Now it's actually a great city, more small town in attitude than 90% of America's small towns today.

DC? If you want business to go your way, you better pay someone to live there to stay on top of your agenda and lobby your interest. That alone sets the bidding price high.

Location location location! For the lower to mid rung of middle class homes, and of course bellow, housing is already more than affordable. More so than anytime in History. The problem is the lack of income to afford a home at any price.
The other problem is, a house one would consider lower middle class, and would pay accordingly in most towns. That same house in the towns you mentioned would be upper crust, border line Hoitey Toitey, due to just the cost of admission.

Realtors Are Corrupt says

NYC is just entering it's price correction phase. Look at the massive REO inventory in the 4 outer boroughs and you'll get an idea what Manhattan will look like over the coming years.

Yes, because as we all know there is absolutely no difference between the warzone of Bed Stuy and Columbus Circle.