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Ignore Those Numbers in Your Bank Account: You CAN Afford to Buy a House Here

A new report from Moody's Economy.com looks at affordable housing across the country and concludes that houses have become only slightly less affordable in the Washington area over the past 20 years. I don't know about you, but in my reality, this says more about the foolish nature of statistical studies than it does about the Washington housing market.
The study, cited in the New York Times last weekhttp://www.nytimes.com/2005/12/29/realestate/29afford.html , takes into account both the lower interest rates and the reductions in size of down payments, so that skews the result a bit. But still: Does anyone around here really believe that housing requires only seven percent more of your income today than it did 20 years ago?
The Moody's study puts our region at the top of the second tier of most expensive cities for housing. San Francisco leads the pack, followed by New York, LA and Miami, all of which suffer from housing costs that eat up between 41 percent and 52 percent of average income to buy the median house. Then comes the next group, led by Washington, Seattle and Boston, with housing taking up between 28 and 32 percent of income.
Obviously, in any metro area there are still some relative bargains to be had, and ours is no exception. Prices in Prince George's, for example, are considerably lower than in Montgomery, Arlington or Fairfax. Outer counties still cost much less than inner counties. But prices are up everywhere. The flaw in this study is the decision to factor in the changes in size of down payments and similar declines in mortgage fees.
Bottom line: Real estate is a game for people who are already in it. If you are somehow in the game--got in early, inherited property, got in on a condo conversion at an insider price--then you're golden, because you can ride the prices as they soar, spending your winnings from sales on better and bigger places as you age. But if you're stuck on the outside looking in, fohgeddaboudit. Study, shmudy.

By Marc Fisher |  January 3, 2006; 7:33 AM ET
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Comments

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I read your article on Independence Air. I will add this question. Would you want a typical "Walmart" employee flying your family into Chicago Midway Airport on a dark snowy night?.

Posted by: L Grant | January 5, 2006 12:13 PM

Marc:
Were you born in NW Washington, DC?

Posted by: Roger Myers | January 6, 2006 12:03 AM

I'll be right back for my bike (next month), when I'm done showering from the nasty spill I took. hmmmm, mud...

Posted by: Chris B | January 6, 2006 2:40 PM

Scenario Contest:

I’ve been waiting for this moment since 1974, he brooded. If not for that malfunctioning parachute, I would’ve cleared that damn Snake River, he thought to himself. He stared out over the ravine, eyes hidden behind goggles. The air was cool. The handlebars felt good in his grasp. He felt the blood coursing through his left leg as it rested on the pedal. Okay, maybe this is just the C&O Canal and maybe this is just a Schwinn and not a Skycycle. But, it’s time to show the world I’m back. I’m back baby, I’m back!

Posted by: Preston Bach, Clifton, VA | January 6, 2006 2:49 PM

i was riding along quietly contemplating the nature of washington--scandal, denial, money laundering, presidential bubble wraps--when it hit me, literally. it roared up the canal at astounding speed. the sound was like that of the defunct concorde at take off, or karl rove at a press conference. a tsunami. it swept all life before it. it clipped trees at their base. i jumped from my bicycle just in time to watch it inundated, and as the wave passed just beneath my feet, i saw it for what it was--charitable contributions flowing from capitol hill, dollar bills marked with a single hand-written phrase "love from your pal, jackie a." i left my bike where it lay, too distraught to retrieve it. i could only hope the good angels from fema would return it.

Posted by: rob watkins | January 7, 2006 9:43 AM

These comments should be on the bicycle photo contest thread, but I'll be sure to put them in the mix when choosing the winner. Thanks.

Posted by: Fisher | January 7, 2006 10:44 AM

I woke up the morning all excited...I had a dream that I had health insurance and that Medicare for my husband was going down and that George W. Bush
was impeached and that Jack Abramoff and Karl Rove and Tom Delay were partners in an oil venture and they, out of pity, gave GW Bush a job and sent him to IRAQ to find those weapons of mass distruction...and that Chief Justice Scalia confiscated Bush's Ranch by public domain. Damn...it is a terrible day....none of it is true.

Posted by: nancy t mauro-ga | January 24, 2006 4:47 PM

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