The low down on Rockville, Gaithersburg, and the surrounding areas. (Baltimore: apartment, to rent)

[molukai]

What bothers me is that the property pricing in this area, as with any major city area, is way overinflated. You cannot purchase a SFH for 250K in this region without suffering some major negative. Based on what you have indicated that you need, you will not find a house, even one that is in rehab-needing condition. Instead, you will have to pay double or more of that amount, which will put undue hardship on you and your family.

But if you need some reassurance after you make the decision to purchase one of the overpriced properties in this area, the likelihood of demand in the DC region will continue to grow years to come, EVEN if the federal government downsizes. This is simply because it is almost impossible for the federal government to relocate, unlike business-centric megacities like NYC, which have already shown that as prices become too unaffordable for businesses and their employees they just simply move.

[reiflame]

High real estate prices are what you pay to live in a major metro area with enormous growth, low unemployment and a highly educated and highly compensated populace. It's simple supply and demand.

Originally Posted by goldenage1

I meant Frederick, Maryland, but it is probaby not urban enough for the OP. I would advise them not to move if they don't have to, especially since they really like their house.

That would be almost as horrible as Fredericksburg -> Rockville.

[BigCityDreamer]

Originally Posted by ETG32

Hi there,

My husband applied to a job in Rockville. From all my research, I can gather that the area is far too expensive for us (we currently live in Philly in a completely rehabbed home with a jacuzzi, granite countertops, and a stainless steel kitchen aid kitchen) and the housing is terrible in our price range (I do not want to go above 250,000 and no Homeowners associations). I have done general searches for Rockville, Gaithersburg, Germantown, Silver Spring, Aspen Hill, and other areas, but I just cannot find anything I like or that I would want to waste my money on down there (don't you guys feel like you are being ripped off?) or anything in a good area. What are the good areas? Where is the affordable housing? Is there any? Are the schools really as great as they say or would I find other schools in Maryland comparable? I'd like to be close to the metro into DC because any job I would be getting would not be in Rockville or any suburb.

I prefer urban living because I do not like to drive and as a family only have one car- would Baltimore be too much of a commute into Rockville or DC?

Thanks in advance.

DC area housing is driven up because of the local economy and jobs. A lot of people living in these areas of Montgomery County have high household incomes. And yes, the cost of living is definitely higher than it is in the Philly area.

If you want true urban living, then you will have to move to northwest Washington, DC - which is way more expensive than even most of Montgomery County. If you want something more affordable, then maybe consider Prince George's County. But you have to understand that if you want anything good, then you have to pay up around here.

[molukai]

It is not so much supply-and-demand as it is price gouging. When you get to a point where you need a middle-class workforce in a city that are so-paid for their services, then they will need a certain degree of affordable living to sustain that city. This is not the case in places like DC or NYC, where the expectation is to purchase a house more than 4x the cost of one's income. Real estate has systematically destroyed affordability of housing, and the pace of which this crime is being committed was exacerbated due to the low mortgage rates. This is simply unsustainable. When mortgage rates spike, you will see a revisiting of the underwater mortgage crisis, centered in these areas.

[molukai]

Originally Posted by BigCityDreamer

DC area housing is driven up because of the local economy and jobs. A lot of people living in these areas of Montgomery County have high household incomes. And yes, the cost of living is definitely higher than the Philly area.

If you want true urban living, then you will have to move to northwest Washington, DC - which is way more expensive than even most of Montgomery County. If you want something more affordable, then maybe consider Prince George's County. But you have to understand that if you want anything good, then you have to pay up around here.

Keep in mind when BigCityDreamer says pay up, he means to pay more than you can afford... as in over one million. There comes a point when people just walk away from a bad situation.

[adelphi_sky]

Originally Posted by molukai

What bothers me is that the property pricing in this area, as with any major city area, is way overinflated. You cannot purchase a SFH for 250K in this region without suffering some major negative. Based on what you have indicated that you need, you will not find a house, even one that is in rehab-needing condition. Instead, you will have to pay double or more of that amount, which will put undue hardship on you and your family.

But if you need some reassurance after you make the decision to purchase one of the overpriced properties in this area, the likelihood of demand in the DC region will continue to grow years to come, EVEN if the federal government downsizes. This is simply because it is almost impossible for the federal government to relocate, unlike business-centric megacities like NYC, which have already shown that as prices become too unaffordable for businesses and their employees they just simply move.

The Top 12 American Boomtowns: Fastest Growing Metropolitan Areas* - Bloomberg

DC Metro is #6.

[adelphi_sky]

Originally Posted by molukai

It is not so much supply-and-demand as it is price gouging. When you get to a point where you need a middle-class workforce in a city that are so-paid for their services, then they will need a certain degree of affordable living to sustain that city. This is not the case in places like DC or NYC, where the expectation is to purchase a house more than 4x the cost of one's income. Real estate has systematically destroyed affordability of housing, and the pace of which this crime is being committed was exacerbated due to the low mortgage rates. This is simply unsustainable. When mortgage rates spike, you will see a revisiting of the underwater mortgage crisis, centered in these areas.

Price gouging? How is that so? It simply is supply and demand. People are snatching up the homes at the prices you say is too high. If there was something nefarious going on, there would be an oversupply of housing. That isn't the case. Demand is driving up prices. The metro are is growing by leaps and bounds. Therefore the housing stock is dwindling which drives up prices.

[molukai]

Originally Posted by adelphi_sky

Price gouging? How is that so? It simply is supply and demand. People are snatching up the homes at the prices you say is too high. If there was something nefarious going on, there would be an oversupply of housing. That isn't the case. Demand is driving up prices. The metro are is growing by leaps and bounds. Therefore the housing stock is dwindling which drives up prices.

PG County housing prices jumped higher than any other DMV region over the last 6 months. Why is this? It is because housing speculators and investors have been buying up all the properties, constraining supply. This artificially creates a higher cost to those trying to purchase homes to actually live in. As I iterated earlier, this is not 'supply and demand', as externalities such as the one I aforementioned is creating an even higher median cost to living in this entire region. Additionally, low mortgage rates have given the real estate market an underhanded excuse to increase pricing of houses across the board, which according to Zillow's Chief Economist shows that houses are the least affordable within the last 50 years, and only appear to be affordable due to the low rates. These upward trending price pressures, coupled with the arguably false perception that these cities present better opportunities than mid-sized cities elsewhere is what allows the real estate market to set baseline prices in such a way that people have no choice but to purchase (as they need to live within some manageable distance from their workplace).

Given the above, when every house is more expensive than the rest of the nation -- to the point of paying 4x-plus for a house rather than the national average of 2.6x... it is not supply and demand. It is making a really hard decision to either accept the reality that you are going to be paying much more than what you will be getting or assume potentially substantial costs (quitting job, moving away from family/friends, going somewhere unfamiliar, finding a new home and job, logistics) in moving elsewhere.

[adelphi_sky]

Originally Posted by molukai

PG County housing prices jumped higher than any other DMV region over the last 6 months. Why is this? It is because housing speculators and investors have been buying up all the properties, constraining supply. this artificially creates a higher cost to those trying to purchase homes to actually live in. As I iterated earlier, this is not 'supply and demand', as externalities such as the one I aforementioned is creating an even higher median cost to living in this entire region. This upward trending price pressure, coupled with the arguably false perception that these cities present better opportunities than mid-sized cities elsewhere is what allows the real estate market to set baseline prices in such a way that people have no choice but to purchase (as they need to live within some manageable distance from their workplace).

Really? So people are being forced to purchase homes? I think more people are renting than purchasing homes. See article below. And though there may be some speculation out there, not all home buyers are investors. We see more and more requests in this forum about people to the area. They aren't investors.

Robert Shiller: Home Prices Will Remain Relatively Stagnant For Next 10 Years | Daily Ticker - Yahoo! Finance

“Most of the increase in households in this country has been met by an increase in renting,” says Shiller. “My own survey data with Chip Case confirms that people feel more positive about renting.” He suggests that those investing in real estate buy homes that are most suitable to convert to rentals.
Another shift that Shiller observes in the housing market is the growing popularity of urban areas and suburbs near those areas.
Shiller says people don’t want to commute long distances because of relatively high gasoline prices and in the current “ideas economy,” many want to live in close proximity to others.
There are also demographic shifts: aging baby boomers who no longer enjoy working on the upkeep of their homes and the increase in single-person households.

[molukai]

Most people are renting yes, and that brings up a whole new range of issues for consumers. The real estate market has justified itself as being the 'better choice' just because the numbers show that purchasing a house typically comes at around the same cost range as renting. But this is misleading, as rents are also artificially high and families are at the mercy of their landlords, who can raise prices on a whim.

Take me, for example. When I lived in Columbus OH I had a really nice two bedroom apartment for $425 a month. It was close to my workplace, a military gym, stores, parks, etc. When I moved here, I first lived in a one bedroom in Alexandria, in the rough part of Mark Center. Despite this, my cramped apartment in my crime-ridden area (i.e. marijuana smoking miscreants frequenting the basement, fights habitually breaking out in the parking lots) costed my family ~$1300 a month. And EACH time we renewed our contract, our rate went up about $100 a month. By the time we left, we were paying about $1500 a month, on top of the utilities, the 'community fee', and more. It was a no-brainer that we had to get out of the situation and move into a house, where at least we can call the shots on a fixed rate. The entire market is a scam.