Several months ago I related my shock, as a former Washington DC resident, on seeing how home prices had soared into the stratosphere upon a visit back to my old neighborhood last April. The house next door to my little starter home in Alexandria, Va., which we sold for $223,000 in 1998, was on the market in April for….$520,000!!!!! I predicted at the time that this was a bubble waiting to be pricked (even told our old neighbors, who we visit each April during our kids’ Spring Break but they said, no, no, no, this was the new reality in Washington where buyers would pay a premium to live close-in.)
My posting sparked a vigorous debate among readers (which I invite you to check out by scrolling down to the link below and to the right titled “Washington DC Bubble”). And one poster brought attention to a Washington Post article that just appeared, which among other things, relates the experience of a couple who agreed last spring to pay a hefty price for a townhome under construction in Alexandria. It’s now November, they haven’t even moved in yet, and prices for comporable townhomes in the development have already fallen by $100,000. How’d you like to be $100,000 in the hole before you even moved into a new house?
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.