Not trying to scare you and joke you: New study find DC region house value to rise 3000 percent in 50 years. How much will it rise in 10 years? It’s easy for you to figure that out. DC area is one of the remaining “affordable” (if you regard $477K median as affordable) markets that will have almost guaranteed return over the long term. I don’t really care about 30 times return in 50 years, I am not that greedy and I don’t have that much time. 2 times return in 7-10 years is already sweat enough to me personally.

Additionally, the report indicates that although house value will increase 30 times in 50 years, household income will only increase from today’s $137K to $1.3 million. From this deviation, future home affordability is going to get extremely and disproportionally worse. In 2057, it’s going to take 11 times earning to buy an average-priced home. Scary indeed!

By the way, this is not a practical joke, it’s a report from a serious government sponsored urban research institute. What this report comes down us in everyday life? Here is my take, if you want your children to have a decent quality of life when they get middle aged, I beg you parents to invest a house for them today. That’s a show of your parental mercy.

This report is the first such report that projects this far into the future. I couldn’t find any similar official report that projects Bay area’s future. But my bet is that the outcome is going to be similar, probably worse than DC area.

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http://www.examiner.com/printa-755988~House_values_to_grow_significantly_in_region:_Study.html

Local
House values to grow significantly in region: Study

(Michael Riccio/For The Examiner)
Dr. Stephen Fuller, center, a professor of public policy and regional development at George Mason University, talks Wednesday about the future of the Washington, D.C., metro region at a panel hosted by the Metropolitan Washington Council of Governments at George Washington University. Joe Rogalsky, The Examiner
2007-05-31 12:41:00.0

WASHINGTON -
The average price of a home in the national capital region likely will swell almost 3,000 percent in 50 years, according to a study released Wednesday. The findings, discussed at a forum sponsored by the Metropolitan Washington Council of Governments, show that the price of the average home in the area will grow to $14 million in 2057 from today’s average of $477,000.

Researchers predicted, however, the average household income would only climb to $1.3 million from today’s $137,000 during the same period.

“We already have an affordability problem,” said George Mason University professor Stephen Fuller, who calculated the estimates. “But this is really scary. It is going to take 11 times the average household income to afford the average-priced house.”

Fuller said local governments can keep home prices from hitting that level by enacting policies that give builders incentives to construct less-expensive housing.

The size of the average home has ballooned in recent years, he said, making many houses unaffordable.

Instead of spending billions on major transportation projects, he said, localities should consider using some of the money to spur construction of affordable housing.

“A lot of people, not just poor people, cannot afford to live here,” said Fuller, the director of GMU’s Center for Regional Analysis. “We need more density, smaller lot sizes, smaller house sizes to make housing cheaper. The housing problem is the solution to the transportation problems. We need more workers who can afford to live near their jobs.”

The national capital region’s boundaries will stretch from Baltimore to Richmond, the study forecasts, and the population will jump to 9.9 million from today’s 5.5 million.

A higher population will only worsen the situation on the area’s already overtaxed road network, experts said.

But the commuting pain can be eased if more affordable housing is created so people can live closer to the office, they added.

“You have to look at housing and transportation together,” said Harriet Tregoning, director of D.C.’s Office of Planning. “If you live far away from where you work, you are captive to gas prices. You have nowhere to go except back to the pump to fill up three or four times a week.”

Tregoning also said urban planners should encourage more development around mass-transit centers to discourage new residents from clogging the roadways.

jrogalsky@dcexaminer.com