patrick.net

Well at least it mentioned the sequester one time in the entire article...since it affects the DC area more than any other part of the country.

Anyway, this article seems to mainly be referring to the extremely high end market of DC, but it's really not that much different in the middle-to-lower end properties. It's all very strange due to the complete uncertainty of jobs in the area.

But then again, pretty much everything is strange to me with regards to the housing market.

farmer11 says

Well at least it mentioned the sequester one time in the entire article...since it affects the DC area more than any other part of the country.

The sequester affects the people who make things work, but not the people who make things happen. For politicians and their patronage networks (e.g. lobbyists, PACs, etc.) these are boom times, especially since Obamacare. "The health care industry has spent more than $700 million to lobby Congress and U.S. agencies from 2010 onward, according to the nonpartisan Center for Responsive Politics. Companies, executives and employees have poured millions more into the coffers of House and Senate members up for re-election in 2014." You're not allowed to take control of your own health, or even breathe, without paying these people. That's what the legislation was about, and the high end DC market shows who got the prize.

DC sucks I know worked there and lived there off and on for a year some while back.

Washington, D.C., a town known for its relative affordability

Since when??? Even 20 years ago the DC area rents were highway robbery, at least when compared to Baltimore.

DC is just as expensive as the bay area and way more crime with horrid weather and massive traffic. The metro breaks down a lot too so not a lot of fun. The Smithsonian museum and some good restaurants are best thing there but thats it!

There are many areas in and around D.C. that are great places to live. However, costs are high as to what is needed to heat or air condition your house.

But the area's employment prospects are high as government increases its influence on the economy.

My take is that San Francisco Bay area prices will collapse before D.C. prices.

Neither is likely to happen as both areas have high job prospects and employment is the ultimate boon to real estate.

SJ says

and some good restaurants

??? Better food in Baltimore. IMO, one has to look really hard in the DC area to find a good pizza.

This conventional wisdom misses a big part of the story. Actually, it misses pretty much the entire story.

Of course the federal government has a huge presence in the District. It’s the city’s largest employer by far, and its presence also accounts for many of the lawyers, lobbyists, contractors, and reporters in town. It is, without a doubt, D.C.’s big industry.

But finance is New York’s big industry, and you don’t see New York being demonized for its reliance on the bankers whom your federal tax dollars bailed out for $700 billion. Fossil fuels are Houston’s big industry, and you don’t see Houston getting slammed for the $7 billion a year we taxpayers are spending to subsidize oil and gas companies.

Instead, there’s a peculiar obsession with D.C.’s reliance on the federal government, especially now that D.C.’s economy is growing nicely. Which is odd, because we’re becoming less dependent on the feds than ever.

Over the past year, federal-government employment in the District shrank by 2.2 percent, while private-sector employment grew by 2.5 percent, according to the latest trends report from the Office of the Chief Financial Officer. A separate study from the Center for Regional Analysis at George Mason University finds that federal government employment accounts for 27.7 percent of D.C. jobs, down from 31.8 percent in 1990 and 28.4 percent in 2000. (For the metropolitan area, it’s at 12.1 percent, down from 15.5 percent in 1990 and 12.3 percent in 2000.)

“The share of the federal government as an employer, that percentage, which is below 30 now, it continues to steadily creep down,” says Office of Planning Director Harriet Tregoning. “We love the federal government, but our future is a much more diverse economy.”

Federal-bloat theorists will argue that a shrinking federal government simply means more jobs getting contracted out, leading fed-driven growth to continue apace. But what sectors of the D.C. economy are actually growing the fastest in terms of employment? From 2007 to 2012, according to the OCFO report, of the city’s large sectors, food service took the prize, growing by 24.3 percent, followed by health (17 percent) and education (16.1 percent). In that time, federal government employment increased by 7.9 percent.

“If you look at where the growth is coming, it’s health care, it’s universities, it’s hotels, it’s technology,” says David Zipper, the director of business development and strategy in the Office of the Deputy Mayor for Planning and Economic Development. “These are not sectors where the federal government is outsourcing or contracting. You can’t contract out to a restaurant.”

You can contract out, say, defense and international security services, and Defense Department contracts jumped after 9/11 (though they started declining after 2008). But the region’s defense contractors are concentrated in the suburbs, highlighting the conflation of D.C., the city, and D.C., the region, prevalent among national pundits who like to treat the Northrop Grumman employees who live and work in Fairfax County and the cranes and Starbucks they scoff at in the District as simple cause and effect. (Many of these cranes are building on valuable lots that had sat vacant for years or decades because there was no money in the city that’s allegedly sucking the rest of the country dry.) These contracts also don’t explain why D.C.’s recent population growth has outpaced the region’s, or why sectors like health, education, and hospitality are booming in the District.

So what accounts for the boom in these homegrown industries? A lot of it has to do with demographics. According to the National Capital Region Transportation Planning Board, an increasing share of the people who work in D.C. are choosing to live in D.C. That’s partly due to safety—homicides were down 82 percent last year from their 1991 peak—and partly due to food, drink, and entertainment options, and to good planning. It helps explain why the city is gaining about 1,100 residents each month, and why, at a time when big cities around the country are growing, D.C. is adding population faster than nearly all of them.

Zipper points out that these new residents are “predominantly young professionals, who have disposable income to spend at restaurants and go shopping with.” Since most of them don’t have families, they’re also more willing to take jobs with long hours and low pay at places like nonprofits and tech startups.

The tech sector doesn’t yet account for a significant percentage of D.C.’s workforce, but its dramatic growth is indicative of the city’s shift from dependence on the feds to local industry, leading Mayor Vince Gray to set an ambitious (and maybe unrealistic) goal of becoming the largest tech center on the East Coast within five years.

Companies are increasingly attracted to D.C. because of its highly educated population, which is in turn drawn to the city by jobs, quality of life, and the dozens of colleges and universities that are based or have secondary campuses in the District. (It’s not, as some critics seem to suggest, as if the people who just happen to live in D.C. have suddenly won the regional economic development lottery and are benefiting randomly from the recent boom.) Tregoning points to a counterintuitive statistic to demonstrate D.C.’s strength: The District has a higher concentration of college debt than any state. That highlights, she says, both the high education level in D.C. and the city’s great transportation network—because it’s so easy to get around without a car, transportation costs are low, people with debt are attracted to D.C., and the District has a lower rate of college debt default than every state but North Dakota.

None of this has much to do with the ebbs and flows of federal government spending. Sure, the city relies on the government just as any city relies on its principal industry, but that reliance, if anything, is shrinking as the city’s economy grows.

http://www.washingtoncitypaper.com/blogs/housingcomplex/2013/05/29/boomtown-brats/

finehoe says

None of this has much to do with the ebbs and flows of federal government spending. Sure, the city relies on the government just as any city relies on its principal industry, but that reliance, if anything, is shrinking as the city’s economy grows.

His conclusion is debatable.

I hear federal workers avg double what their private sector equivalent. The CBO estimates 16% higher.

http://www.motherjones.com/kevin-drum/2012/01/chart-day-federal-government-pay-vs-private-sector-pay

indigenous says

I hear federal workers avg double what their private sector equivalent. The
CBO estimates 16% higher.

Well, by all means, I'd trust what you "hear" over actual facts and statistics.

tatupu70 says

Well, by all means, I'd trust what you "hear" over actual facts and statistics.

For starters the CBO numbers indicate that what he is saying is not true. I don't have the interest to track down more numbers.