Northern Virginia Housing
Old news to me, but it’s in today’s WaPo… “The Housing Crisis Goes Suburban“.
From the article:
In the past five years, housing prices in Fairfax County have grown 12 times as fast as household incomes. Today, the county’s median family would have to spend 54 percent of its income to afford the county’s median home; in 2000, the figure was 26 percent. The situation is so dire that Fairfax recently began offering housing subsidies to families earning $90,000 a year; soon, that figure may go as high as $110,000 a year.
I had a condo in 2000, not far out of college, felt I was doing alright. When I moved to my townhouse in 2003, I was still somewhat incredulous that I had to spend this much — as in, “man, half of my monthly salary goes to my mortgage and utilities” — and knew right then that something wasn’t right , that, at this pace, there was no way I’d ever be able to afford a single family home in the DC area. Things were increasing way too fast.
In any case — much happier in NC now. Sucks to see that there are families in DC with close to six figure incomes who can’t afford housing, though.
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August 28th, 2006 at 10:27 am
Read the article. Raises tough questions for which there are no easy answers. In the end it seems like “the market” is always king–supply and demand. Try and manipulate it and often one gets unintended consequences. Example would be rent price controls that led to 1000s of unimproved apartments in New York City because it was no longer worth the investors’ $$$ to upkeep the units for the limited rental prices. In the end buildings ended up dilapidated for decades before being razed years later when the populace couldn’t take it anymore. Also investors/developers stopped building new apartments since they could no longer cover their costs….
If one cannot afford to purchase a home–they should try and rent for much less and use the money saved on a mortgage to invest in 401Ks and stocks/bonds for the long term w/ advice from a financial planner with integrity.
jay
August 28th, 2006 at 1:22 pm
Market manipulation is exactly what is going on when local zoning boards (and the citizens who elect and petition them) take every opportunity to discourage building new supply. I rent, I have 401K, and I’m not going to be affording a house in Northern Virginia any time in the future. North Carolina is looking pretty attractive in that respect.
August 28th, 2006 at 2:02 pm
Jay,
Not saying that there needs to be rent ceilings or anything. I’m kind of agnostic about the whole thing. I’m just commenting about how it was near impossible for anyone, even an existing homeowner at the time, to upgrade his/her position. I was one of them.
For what it’s worth, I max out my 401k every year and am probably in better financial shape than many out there who live extravagantly beyond their means with maxed out CCs and out of control debt. In fact, it’s probably a lot of that same crowd who lives in the 750k Northern Virginia homes.