Update: The Wife tells me that the link to this on MSNBC has gone stale. Here's the link for the original Washington Post story.

And there are a couple of letters on that story.

My Google News filters grabbed this little jewel from MSNBC. With a steady increase in prosperity and average incomes making them affordable, home sizes have steadily increased since the 1950's. I see the houses mentioned in this article every day on my commute. Towering houses, often with a brick facade and beige siding, the houses that mysteriously fell from the sky. More often than not, the yard is relatively sterile, closely clipped and empty, ten acres lonesome for its residents. They must all be at work with the kids in daycare or enjoying the media room, because they certainly aren't outside.

And so when Alyson Skinner wanted a bigger house on 10 acres in western Prince William County, there it was.

For just under a million -- and with the equity from her smaller home -- she was able to get more space for roughly the same mortgage payment to accommodate the lifestyle she envisioned for her family. Instead of going out into the world, she preferred to contain the world inside her 5,300-square-foot home.

Technorati Tag: prince william county

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My Google News filters grabbed this little jewel from MSNBC. With a steady increase in prosperity and average incomes making them affordable, home sizes have steadily increased since the 1950's. I see the houses mentioned in this article every day on my commute. Towering houses, often with a brick facade and beige siding, the houses that mysteriously fell from the sky. More often than not, the yard is relatively sterile, closely clipped and empty, ten acres lonesome for its residents. They must all be at work with the kids in daycare or enjoying the media room, because they certainly aren't outside.

And so when Alyson Skinner wanted a bigger house on 10 acres in western Prince William County, there it was.

For just under a million -- and with the equity from her smaller home -- she was able to get more space for roughly the same mortgage payment to accommodate the lifestyle she envisioned for her family. Instead of going out into the world, she preferred to contain the world inside her 5,300-square-foot home.

Technorati Tag: prince william county

Tags: blog on technorati, delicious, flickr

The perceived likelihood of a collapse in the housing market seems to be on the rise among the econo-pundits. Even if it's not our fate, it seems we may very well talk our collective selves into a painful "correction" in the housing markets. The stories I've collected over the past few days.

Editorial:Property values have risen too high

Prince William County used to be considered a "bed and breakfast" community, where those who worked in or around Washington, D.C. could afford to raise their families, enjoy quality schools and live in a comfortable, affordable home or apartment.

The end of the affordable "era" has come and gone in recent years, with many new home prices (and used homes) now exceeding $500,000. Prince William County residents are living "Lifestyles of the Rich and Famous" on paper but their bank accounts and living conditions don't reflect such a style.

But is this even a bubble?

... a wholesale crash means a wholesale retreat from fundamentals. Fundamentals like supply and demand ? there's still far more demand than supply and still far more willing customers than greedy speculators.

Even the Weekly Standard has noticed

Perhaps we are seeing only "a little froth in the market," to borrow the phrase used by Federal Reserve Board Chairman Alan Greenspan in his recent speech to the Economic Club of New York. The man who is famous for saying that if anyone understands what I am saying, I must have misspoken, handed down this model of clarity, "Without calling the overall national issue a bubble, it's pretty clear that it's an unsustainable underlying pattern." Froth, it seems, consists of "a lot of local bubbles." Meaning: In some areas prices are due to come down, but there will be no nationwide collapse in house prices.

More troubling perhaps is the sketchy financing:

More and more Americans--two-thirds of new buyers, by one estimate--are opting for variable rate mortgages, or choosing to pay only the interest due in the early years, leaving repayment of the loan for a later date.

Jim Bacon agrees:

This kind of flimsy financing is a sure sign of a market top. I was warning about the real estate bubble in November 2003, but I didn't have a sense then of imminent danger. I do now.

Vodkapundit has this pair of postings: Pop Goes The LIBOR and I Told You So

Atlanta first. Driving around here and seeing signs for houses ranging from "upper $400's" to "$750's" and up--and this is not in the fancier sections, mind you--I've been asking for years, "Who the hell buys these places, and what do they do for a living? How can that many people afford the mortgage on a house like that?" The answer may be, "They can't--unless it's floating on a cheap ARM or LIBOR."

More Fuel For The Fire:20,000+ homes in Dulles South?

New development battles brew in Loudoun almost daily. Both the rural and suburban halves of the county feel the pressure of prosperity -- more jobs, more residents, more houses, more conflict.

A new group has formed to fight for the middle ground ? a large swath of land known to planners and developers as Dulles South, running on both sides of U.S. 50 between U.S. 15 and Route 659.

Current zoning regards it as a low-density ?transition zone? between the urbanized east and rural west.

Read all of the comments.

And you might ask, isn't this all rather precarious? Jim Bacon quotes the WaPo:

Sayeth the Post: "Foreclosure rates rose in 47 states in March, according to Foreclosure.com, an online foreclosure listing service. The rates in Florida, Texas and Colorado are more than twice the national average. Even in New York City and Boston, where real estate markets are white-hot, foreclosures are rising in working-class neighborhoods

Technorati Tag: housing

Technorati Tag: irrational exuberance

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In my prior post, I asked "Is there an actual 10-year cycle here?"

This 1999 report from the Brookings Institution shows buildig permit issuance for Metro DC bottoming out in 1991 and climbing through 1996-1998.

The Washington Times claims that we're in a housing bubble.

Washington area home prices surged 24 percent last year, twice the national rate and the fourth straight year of double-digit gains, according to the Office of Federal Housing Enterprise Oversight. Since the late 1990s, home prices have doubled in northern Virginia and many other parts of the region.

Richard DeKaser, chief economist with National City Corp., estimates that Washington is one of 28 U.S. cities where houses are 10 percent or more overvalued, based on income levels and other factors, and could be in a bubble.

...

"There is no countrywide bubble in house prices, but there are bubbles in house prices in as many as 27 U.S. cities," said Michael Youngblood, an analyst with Friedman, Billings, Ramsey & Co., with the most vulnerable areas those where house prices have far outstripped income growth in recent years.

"It's certainly possible Washington will get into the bubble category," he said, suggesting neighborhoods here that have "cracked seven-digit" house prices are the most suspect at present.

I'd have to agree there, for many reasons. Externally, many of the $600-800K homes in the area have cheap plastic siding, brick facades, tiny yards, and cheek-by-jowl siting. Who wants a $3000/month mortgage and yet still have to look at your neighbor's wall, eight feet away? Those aesthetic failings don't seem to be affecting home sales, however, given the recent surges in both home prices and property tax assessments.

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Two Northern Virginia counties (Fairfax and Prince William) have some of the highest median incomes in the United States. Loudoun County is among the fastest, if not the fastest, growing counties in America. The unemployment rates are far below national averages. What does that get you?

The region's wages rose 9 percent on average from 2000 to 2002, the report said, but median home prices went up 37 percent during that time. The share of homes selling for $400,000 or more is rising, and the share selling for less than $140,000 is falling.

This graphic accompanies the WaPo article which provides details from a report released by the Fannie Mae Foundation and the Urban Institute.

It makes it tough for those on fixed incomes, such as the elderly, or otherwise regulated (not based on the free-market demand) incomes such as teachers and firefighters to buy homes and not endure horrific daily commutes. I remember years ago seeing articles in the paper about teachers and police driving hours to commute into Silicon Valley towns. I appreciate the strong job market here and the way my house is appreciating in value, but it is worrisome to see some of the side-effects.

I also wonder if there's a bubble, waiting to pop.

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