Yesterday, I got an email with a link to a site called NewGeography, and an interesting post by a guy named Peter Smirniotopoulos. And wow! Talk about being optimistic about the immediate future for business in my town - he's predicting that the election will generate 40,000 real estate transactions.
I wish.
But I think Peter is overly optimistic, even by my standards!
Here's how it really works.
Yes, there will be some people leaving federal jobs and returning to wherever they moved here from. And there will be a bunch of jobs to fill. And oh my! If that's all it took to create a real estate transaction!
But here's how it really works.
- Of the people leaving government, many will stay put and take jobs in local law firms and consulting outfits - in or out of government, these people have expertise that is more marketable here than almost anywhere else in the country. These folks will not move, at least not because of the election.
- Many of the people taking political jobs with the new administration are here already. They've spent the last eight years working at law and consulting firms waiting for the Democrats to take back the White House, and they are in stong demand because they understand how things get done. They are not going to be buying houses because they already live here.
- Of the people moving here, a lot of them are going to be young and are likely to prefer renting a room in a group house in Adams Morgan to paying a mortgage on a condo or house.
- The people moving here with families are often in no position to buy. Prices are high, and government salaries are not. So they often rent, at least initially.
- There are even stories of members of congress who team up to share basement apartments on Capitol Hill because they can't afford a decent house or apartment. Even Barak Obama rented a dingy junior 1-bedroom while he was a Senator. Last night on 60-Minutes, his wife, Michelle, said she couldn't stand to sleep there, so they stayed in a hotel when she was in town.
Yes, there will be a few sales, probably in the District or the very close-in suburbs. But my experience with most administrations is that they are populated by a bunch of young workaholics who do not exactly aspire to gracious living. They live in their offices and eat most of their meals from take-out bags or at receptions thrown by trade associations.
So I'm hoping that the truth lies somewhere in between Peter's optimistic forecast and my rather jaded one.
I am not in WA DC, but I think you are right. I see no reason that the election would create any run of sales other than what one would expect as administrations change. For realtors I imagine the best possible scenario is a new administration every four years.
Wow, I hope that the new change generates a lot of business for your town too. We can use it anywhere we can get it.
Patricia - I'd be interested to learn about the actuals when they come out - perhaps you can make a note to revisit this post in 6, 9, & 12-months time and update us. I agree that this is *very* optimistic, although wouldn't that be cool if he is correct, eh?!
Thank you for sharing this!
-Tim Mancuso
Patricia - I'd be interested to learn about the actuals when they come out - perhaps you can make a note to revisit this post in 6, 9, & 12-months time and update us. I agree that this is *very* optimistic, although wouldn't that be cool if he is correct, eh?!
Thank you for sharing this!
-Tim Mancuso
Patricia - Time is the only teller but I would tend to side with your viewpoint, the middle ground between Peter's optimism and your (probably more) relistic jadedness;) In time, things will work themselves out.
It has been funny to listen to "outsiders" talk about all of the real estate transaction that could be generated by a new administration. You nailed it on the head as usual. I do have ONE contact with an incoming staffer but they haven't decide whether to buy or rent yet.
Hey so...no overflow for us Virginia agents.. bummer... I was hoping a whole bus load of Democrats would show up wanting to live in the suburbs...specifically....Prince William county :)
Pat - We are all hoping business picks up - not just you up there in DC - I wish you luck!
I also think there's room for an Obama Fashions (trademark pending?) store... everyone's wearing the latest Obamawear these days.
If this incoming administration is anything like the past ones, many/most/almost all will rent.
Pat, I hope for you there will be many transactions. Your jaded observation is from experience and knowledge. However, this administration seems to have created an excitement last seen since JFK. Many young people now think working for government and serving their country is an honorary profession. They might start out as renters but renters are future buyers. Go get em!!
Well, the change will create interest if nothing else. You lead an exciting life in DC!
Pat, I'm with you and your jaded view. As Lenn correctly stated, most will be renting...
Patricia,
Looks like your view is more realistic, even if it is not that optimistic as you would like it to be. Terrific analysis, by the way.
My wife read it and laughed. In Russia (and we are from Russia), your phrase that "a bunch of young workaholics who do not exactly aspire to gracious living. They live in their offices and eat most of their meals from take-out bags or at receptions thrown by trade associations." is unbelievable. There, the closer you are to the government, the closer you are to money, and perks, and whatever you wish...
At least you will have an uptick in business because of the election I'm still looking for a reason we will have a turn around soon.
Hi Pat... I think your perspective (supported by others who commented) is probably very realistic, but I hope (for your sake) that Peter is correct. I would be curious to know which party, when entering office, typically creates a bigger ripple in the DC real estate market... my guess would be that the Republicans are bigger buyers while the Democrats would be bigger renters.
Interesting post Pat. I guess I assumed that there would be HUGE turnover of people and homes. Thanks for the perspective.
Ms. Kennedy:
Thanks for blogging about my recent post to newgeography.com ("Washington Wins...Everyone Else (except maybe Chicago) Loses," 11/16/08), and for providing in your comments a link to that post. I enjoyed reading your perspective as well as those expressed in comments to your blog; I only wish that this kind of exchange were taking place in the comments section in response to the original posting in newgeorgraphy.com, as the site is intended to generate thoughtful discourse on these and other subjects about how and where we live.
I would encourage you and those who commented on your blog entry to read the entire posting on the D.C.-area real estate market, as it goes well beyond what is likely to take place in the metro area as a consequence not only of the change in Administration but also more specifically as a consequence of the types of federal programs President-Elect Obama is promising (the New, New Deal).
BTW, the reference to 40,000 transactions (which includes rentals as well as sales) came from NBC-4 News, and I suspect the original source was the local realtors association. I will confirm that if you're interested.
Also, I am not an "outsider" but a native Washingtonian (probably one of the few people born in the District who has also lived in all three jurisdictions) and I have been a real estate professional, on the legal, development, and/or finance side, for over thirty years. My professional bio can be found on my company's web site, unidevllc.com, if you're interested.
You and your commentors may also find of interest other posts I have made on newgeography.com about the emergence of the City of Falls Church, Virginia, as a quasi-urban enclave, and the fundamental sources for the current housing and mortgage credit crisis.
Keep up the good work. I would love to hear from you.
Pat,
Wow, thanks for keeping us informed about the D.C. area. I was also born and lived in D.C. for 22 years before moving to the beautiful sunshine state of Florida. I would like to know the actual sales after the new government moves into the area.
Yep, that's the Washington I know and love!
Thanks for the great information!