What drives the cost of housing?

[HurricaneDC]

10 years ago DC wasn't that desirable. I do wish the DC housing prices would fall though. Thankfully my mom's house is already paid off so it wouldn't screw her over.

[TheseGoTo11]

Originally Posted by RyanZ

Thus, I am wondering where the income levels are coming from that have kept DC real estate prices so sky-high?

Couple things in addition to obvious high wages:

1. High Share of Working Mothers - DC Metro has the highest share of working mothers in the country, the Greenwich, CT SAHM whose husband rides metro-north to Manhattan type of lifestyle is less common here, go to Great Falls, and you see a lot of two lawyer homes where they qualify for the house based on annual income, not massive bonuses or liquid assets

2. Rapidly Declining Cost Per Sq Ft As You Get Further from DC - In my neighborhood, Woodley Park, a rowhouse goes for about 500-600 dollars per sq ft. But go 35 miles out to Ashburn, and you get a 1990s/early 2000s townhouse in better condition for $150/ft, or about 70% less. Go 35 miles from NYC and you're somewhere like New Canaan paying millions, go 35 miles from San Francisco, and you're paying millions in Palo Alto.

[terrence81]

That is a point that the further out one goes in the DC area the cheaper the real estate. I think this is a big factor in the traffic problem here particularly in my VA burbs. There less incentive for companies to have headquarters in the city and there's less incentive for families to live closer-in as well. For active singles like myself there's plenty of incentive to stay closer-in but now that my job is further out in Fairfax so hating not being able to doing both work and play in the District but still happy to have a job in these days and times.