Welcome to Real Estate Live, an online discussion of the Washington area housing market with Post Real Estate editor Maryann Haggerty and columnist Elizabeth Razzi.

Maryann has been with The Post for 18 years and has served as real estate editor for the last five years. She's been a business and real estate editor and reporter for about 25 years. In all that time, she still hasn't figured out where you can find a lovely but inexpensive house in a charming neighborhood.

Razzi is the Local Address columnist for The Post's Sunday Real Estate section in Business. She's written about real estate and other personal finance topics for magazines and newspapers since the days of double-digit interest rates. She is also the author of two consumer-advice books, "The Fearless Home Buyer" (2006) and "The Fearless Home Seller" (2007).

Today they'll discuss the local housing market -- from condos and investment properties to contracts and mortgages.

For more on local real estate, visit washingtonpost.com's Real Estate section.

The transcript follows.

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Maryann Haggerty: Greetings to all on this Halloween afternoon.

Yes, we have plenty of scary stuff to comtemplate here...

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Elizabeth Razzi: Happy Halloween, everyone. I'm sure no one has been dipping into their stash ostensibly bought for neighborhood children. Let's get going, sugar-rushes expected.

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Bethesda, Md.: Allow me, if you will, to offer my own speculation about the future of the housing market.

I think prices will continue to drop for a few more months, but once we hit bottom, I do NOT think it will be an immediate turnaround wherein prices and sales begin to shoot back upward at a dramatic pace. Rather, I think that once we hit bottom, we'll sort of sit there for a while as the correction bears out.

In that time, home sales MAY show something of a rebound, as housing will finally become affordable to more middle-income families, but the number of people able to take out long-term loans will be very small, because lending restrictions will be MUCH more strict (as they should be). Let's also not forget that many families simply won't have the money to put towards a down-payment now that so many people's savings and 401K's are being depleted.

Also, in the next couple years, we could see something of a double-dip housing decline, because the baby-boom generation will begin to retire, thus ADDING to the glut of homes on the market.

Does all this sound like a reasonable hypothesis to you? Not the most rosy picture, I grant you, but to me it seems the most realistic.

Elizabeth Razzi: Well, your hypothesis sounds as reasonable as anyone else's. I don't know when the bottom will be reached, but I think when we eventually look back on it, we'll see that it was a bumpy bottom spread out over months. No quick pickups in prices. I hate to see 401-k's tapped for a home down payment. That's an expensive way to go and can really diminish your wealth for retirement. Someday those shares will be worth something greater than they are now!

I'm not so sure, though, about your hypothesis on retirees selling off the inventory of large homes. Some will; but others will resist moving from the large, comfortable home where they raised a family. We could see a new crop of small businesses catering to their desire to stay in their big suburban houses.

Maryann Haggerty: There probably will be a sort of bumping-along-the-bottom period, because there usually is in these things.

The demographic thing (aging boomers) is a BIG and interesting question. I suspect the pattern of most people preferring to age in place will continue, but for decades, the sheer number of boomers has magnified any trends. One thing to take into account when making such forecasts: Boomers will likely live longer than any generation that preceded them

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Out of the Blue: Why isn't residential real estate leased for 5-10 years? Leases that long are common in commercial real estate.

But if a family is planning to stay put about that long, they'll typically "buy" the house on a 30-year mortgage, of which only a small percent ever gets paid off. They're not really owning, they're just renting from the bank and speculating on the local real estate market.

I think of all the things Fannie and Freddie did to help bring about the current fiscal crisis, the most important might have been creating a real estate environment in which everyone is a speculator. Given how often Americans move, it's ridiculous that 70% of our housing is "owned."

Elizabeth Razzi: I'm really glad homes aren't leased for 5-10 years at a shot. After all, a one-year lease can usually be renewed five or 10 times. This gives you more flexibility than commercial leases, which is necessary given all the complexities of life...job changes, pregnancies, divorces, etc.

Maryann Haggerty: On average, Americans move every 7 years. That includes young folks who may move every year, and people who move twice in their lives.

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Alexandria, Va.: I am currently looking at houses, though with long term view -- am happy to wait till next year, or even 2010. My question is that I recently viewed a nice house. I looked online and saw that 5 houses, same no of bedrooms, comparable size of land, comparable size of living space within few blocks have all sold in last 3 months. But all for 100K less than what this owner is asking. This house is nicer in some ways, but not 100K worth (new kitchen, nice garden), and less so in others, off major road. So why given all he comparables, is this house priced so high? I'd like to negotiate, but the gap seems to large. A 100K is a lot.

Elizabeth Razzi: One thing the online sites don't tell you is what kind of incentives may have been offered at those prices. That sometimes could make the sold price even lower than that dollar figure. Why not get a buyer's agent (not the same agent the seller is using) to advise you on prices? Make an offer for what you think is reasonable -- and see where negotiating takes you.

Maryann Haggerty: That's a big enough gap so that one wonders how realistic the seller is being.

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Burning curiosity: Just sharing an anecdote. I bought a 3-bedroom house in Silver Spring in 2002 for $350,000 and sold it in 2004 for $500,000. It was purchased by a large extended family of about 12 people (about 6 were under 18) who, honestly, did not seem like they'd be able to afford the collection of multiple mortgages that they'd packaged together, but they had their own landscaping business, and as the seller, it would have been more than a little strange for me to tell them that I didn't think they could afford their payments... So here we are in 2008, and I see on realtor.com that it's now for sale for $379,000 when the area comps are closer to $415,000 -- that screams bank sale to me -- and they have it listed as a 6 bedroom. I am dying to know what they did to the house to turn it into a 6 bedroom. They didn't build an addition or anything (yay satellite photos?). There were two rooms in the basement. One wouldn't qualify because it has a door to the outside, and one was teeny-tiny and had no closet. Man, I wish I didn't live across the country. I would LOVE to go to an open house. I really wonder if the real estate agent is fudging the listing.

Maryann Haggerty: Well, you could ask a friend to peek.

Elizabeth Razzi: There is always the possibility that someone mistakenly hit the 6 key instead of the 3 key when entering the listing. Or maybe they did somehow carve bedrooms--all with legit fire escapes--into the house. Who knows, maybe your old dining room is now a bedroom. And, honestly, Maryann has the best idea. Certainly some old friends must be as curious as you!

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arlington: For the economic numbskulls among us -- will the recession/foreclosure explosion etc. cause housing prices to drop (not just in the DC area, as I know we're somewhat insulated, but in general)? Thanks!

Elizabeth Razzi: Hey, that's a very legit question. No numbskullery involved. Well.....recession aint gonna be good for home prices. Job losses--and the threat of job losses--causes people to hold back from buying homes. This recession is unfolding in a very unusual way, making it especially hard to guess how big a problem unemployment will actually become.

Maryann Haggerty: We're only somewhat insulated, not completely (and that assumes that our dominant industries aren't among the hard-hit.) The overall state of the economy--especially employment--is a very important factor in the housing market.

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Washington, D.C.: I can understand why banks have made their standards for who can qualify for a mortgage loan stricter, but why are they raising interest rates for those who can be approved for a mortgage so drastically?

Frankly, banks need to give out loans to get everything kickstarted again. Even the federal government (who actually has a controlling interest in the banks now) has said that they need to start making loans to get everything moving again.

Interest rates have risen about 0.75-1% over the past week and a half! That takes any discount that people might be getting from lowered home prices out of the equation, so there's no incentive for people to buy now at all. What gives?

Elizabeth Razzi: Well, the banks don't exactly decide to raise interest rates. Not even the Federal Reserve decides what mortgage rates will be. The activities of many unseen buyers and sellers in the market determine what the price of mortgage money will be. This recent rate rise is unusually dramatic, and probably reflects investors' fears of recession and, eventually, inflation.

Maryann Haggerty: Global money markets still dictate interest rates, and they have been VERY unsettled, as we know.

(When I looked yesterday, rates were at about where they were two weeks ago, after having taken a steep fall in the middle. And that, in turn, was pretty much where they were in late August)

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D.C.: Given the economic crisis...why haven't rental prices started to come down. A one bedroom is around $1,500! I'm paying $800 in MoCo and I get 1.5 times the space of a DC rental.

That complaint out...condo prices...same problem. What gives?

Maryann Haggerty: They haven't come down because the landlords can still get what they're asking (after throwing in a free month of rent or whatever, if needed.)

Elizabeth Razzi: Lots of folks who would have been buying condos are looking to rent now. Is anyone out there seeing rents changing--up or down--on apartments, townhouses or detached houses?

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Silver Spring, Md: We're very fortunate to be in a house we can afford, with no plans to move anytime soon. We are thinking about buying some land or a cabin someplace out of the city, where we might spend weekends and eventually retire (which is at least 30 years off), possibly up around Gettysburg. My question is, how do you get started, especially when looking for vacant land? Just go up there and drive around? And how do you pick an agent in a place where you don't know anyone? Do you have any advice, or books to recommend?

Elizabeth Razzi: Interesting question -- and I'd love to chat more with you about the topic if you wouldn't mind sending me an email. Anyway, the key thing is to be cautious buying land, especially if it hasn't been developed yet. If there's no sewer, you need to have it perc-tested to see if it can support a septic system. If there's no road...well, what guarantee will you have that there will be a road someday. How is the neighboring property zoned? There's a lot to research, and you can begin by driving up there and tromping through the woods. And get to know the local zoning folks!

Maryann Haggerty: With an existing cabin, you have fewer of teh will-they-develop worries.

How to find an agent? Do you have friends of friends? Is there an agent here you trust who might give yu a recommendation?

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Bethesda, Md.: Hi,

I own a 1 Bedroom condo in Bethesda. I'm looking to rent this condo out and I will be a first time landlord. I'd like to do a credit check on potential renters I meet with. Could you suggest an organization/company etc. that I could contact in order to do a credit check on potential renters? I looked into Equifax, etc. but it seems those services are only for pulling your own credit history or for bigger companies looking to do credit checks. I'm looking for a reputable organization that can help an individual/landlord do credit checks on a potential renter. Also what info should I request from a rental applicant in order to do the credit check? -- driver's license number, Social Security number? Thanks.

Maryann Haggerty: Definitely do a credit check. There are a zillion companies out there that do that; you'll find many listed in the phone book (under credit reporting agancies.) Also, a quick poke around hte INternet finds me this: http://www.landlordsresourcedirectory.com/Maryland.htm

It's a resource directory for landlords.

Also there's lots of info available from nolo.com in its "Every Landlords Guide" series

Elizabeth Razzi: A very important point to remember: Make sure you go through the same credit-check procedures for every applicant. Hold them all to the same credit standards. And keep your records for having done so. If you pull credit reports on only some of your applicants, you could be accused of violating fair housing laws.

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Serial house renter: On rents -- In Arlington and Fairfax, my impression (as a renter looking inside the Beltway) is that many fewer rental houses and townhouses are available now as compared to last year. It's as if they're all "rented up." This has been the case for at least 4 months.

Of those I see on the market, perhaps 60% are higher-end, e.g., 3+ bedroom SFHs priced above $3,000. I do see more "normal" properties and prices (1 and 2 BR townhouses and condos, priced in the $1500-2500 range) but they seem to come in brief waves and then disappear again.

Elizabeth Razzi: Interesting! Thanks for the report.

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Clifton, Va.: Silver Spring

If you are buying property I would make sure you are not dependent on an easement to cross other property(s) to get to yours and there are no easements to allow others to cross your property.

Also suggest soil tests you dont want to find you are on a former dump etc.!

Elizabeth Razzi: Good advice. Thanks, Clifton.

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Laurel: Let me ask you a variation of what I asked Steve Pearlstein: Now that the bubble got a lot of houses built; how are we going to get people and jobs to move to places Nevada, Miami and Sussex County DE, where a lot of new homes are?

Elizabeth Razzi: Well, don't take them from here! Sussex County will continue to draw its share of residents (2nd homers, a lot of them) from DC, Maryland and southeastern Penna., just as it has been doing. People will need to have some job security and see their retirement investments regain some value, though. Miami will eventually continue to draw from all over North and South America, as it has, once the world economies settle down a bit. Nevada? They're going to have to come up with an industry aside from home construction and gambling. Maybe solar power or wind farms will find a home there--and plug into the same electric grid now fed by Hoover Dam. Anyone else have ideas on this?

Maryann Haggerty: The key is jobs. If employers grow, workers will fill homes. Who knows what the industries of the future will be? Maybe wind farms, as Elizabeth suggests--or just as likely, telephone call centers, or the manufacture of something we haven't imagined yet.

Both Florida and Nevade have long histories of boom-and-bust economies. Whether that's healthy or not, who knows? Its' the way it is.

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detached homes rent: I've heard two friends say they are having trouble getting tenants for their detached homes in Alexandria, I guess that means rents should be coming down, or that there may be negotiating room out there for renters.

Elizabeth Razzi: Could be. Or, if your friends are new to the landlording thing, maybe they're not getting word out effectively?

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Fairfax, Va.: Come January, we are going to have a new administration. Theoretically, that means employees of the current administration may be moving out and employees of the new administration will be moving in. And they will need a place to live. Historically, does the administration change have any effect on the real estate market? And if so, does it reach the suburbs, or is it mostly just downtown? Would January be a good time to put a house in the suburbs on the market, or should I wait until springtime?

Elizabeth Razzi: We've been getting this question in every chat over the past six months or so! Seems a lot of you folks are ready to spring into action right after Election Day--or at least Inauguration Day!

Maryann Haggerty: And then I get to add my ritual answer: This is a metro area of 5 million people. Administration changes just don't involve enough people to make a significant difference on a macro level. (And many of those people, of any party, are firmly ensconced in revolving doors between public/private sector.)

Sometime between now and January, I'm sure we'll write that story a few times.

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Baltimore, Md.: Home prices dropping: The poster who wondered if they are dropping in places other than DC should read yesterday's Post story (I think it was the Post...if it was the NYTimes, forgive me) about Las Vegas, where overbuilding, followed by the housing/financing crash, has created huge opportunities for buyers. I also saw a story on the PBS News-Hour last week about the Inland Empire area of California, where the market was overbuilt and has been decimated, with homeowners just walking away and leaving all their stuff. (They showed one home where the owners had left a large flat screen TV and a couple of computers.) Depending in the region, the impact has ranged from a return to sanity (DC and environs) to near total devastation of entire subdivisions.

Elizabeth Razzi: That, indeed was the Post, thankyouverymuch. Joel Achenbach wrote the Page 1 story on Las Vegas. An important thing to keep in mind is that overbuilding occurred--could only occur--where there was the land available to accommodate it. Locally, that was former farmland in Prince William, Loudoun and Prince George's counties. In Las Vegas, well it's so flat and open there you could just pave the road a few more miles and open a new subdivision, then another, and another, right up to the foot of the mountains.

Maryann Haggerty: Actually, the story was on the Business front...

The Vegas crash was pretty spectacular.

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South Riding, Va.: Hi, Two and a half years ago we got a 30-year fixed rate, 10-year interest only mortgage. For now we can afford the payments. But, in 7 1/2 years, I don't think we will be able to afford the payments. By my guess, we've lost probably $100,000-$130,000 in equity, so while we are not upside-down on our mortgage, we no longer have 20% equity or more. We have stable, good income. Are there any programs to help us refinance now, or do we just have to wait and worry and hope we can refinance in 7 years?

Maryann Haggerty: Relax. Seven years is a LONG time in the future. Why would you want to refi out of a good stable loan in the midst of hte most turbulent financial market in decades? I don;t get it.

Elizabeth Razzi: You don't mention whether you're choosing to make principal payments or not. If you are not...then your payment might re-adjust sooner than you expect. If your outstanding principal (the amount you owe) gets too high compared to today's value of the home, the lender may be entitled to reset the loan. Check your loan documents to be sure.

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Arlington, Va.: I bought my condo right by the VA Square Metro stop in Arlington in April 2007. It is a two bedroom. Yes, I probably overpaid a little...but values in my building havent gone down.

Plus...i Love where I live. Love it, every day I wake up next to my beautiful fiance and say ya know what, I am happy....no amount of money can make that change.

I am sure when I go to sell it, I will either make money or break even. BUt wiht the tax refund I get now cause of the mortage and the money I would be spending on rent....I am head.

But happiness is the key...and i am happy

Elizabeth Razzi: Hey, good for you! Just be wise and make sure your beautiful fiance gets all the credit, and not the condo!

Maryann Haggerty: I think what she means to say: Make sure you give your fiance due credit for your happiness, instead of attributing it all to the condo.

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Bowie, Md.: My wife and I took out a 30-year, fixed mortgage in 2002 for $265,000. Our interest rate is 5.128%. We need to do some work on our 20+ year old house (roof leak, repair skylights, new HVAC system) and aren't sure if it makes sense to refinance or take out a HELOC. Any thoughts on this?

Maryann Haggerty: That's such a nice rate I don't think I'd want to fool with it. Sure, you could ask your bank what refi terms would be, but the home equity line of credit might be easier, once you check the math.

Elizabeth Razzi: You left out the most important number in your equation--your equity. Did you make a 20% downpayment? Or zero? If you have the equity, HELOC is definitely the way to go. They're tied to the prime rate, which should be coming down thanks to the Fed's latest interest rate cut. And 30-year-fixed rates are way higher than 5.128% now.

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Tax question: Have you heard any rumors about Congress possibly removing, or phasing out, the $250,000 capital gains exemption on the sale of your primary residence? Personally, I could not sell right now without that exemption, especially given the need to put a 20% downpayment down on a new home. Are Realtors' trade associations going to monitor this, in their own self-interest, if not their clients'?

Maryann Haggerty: I haven't heard that one.

But trust me, if that is discussed as a possibility, ALL the real estate industry lobbysists will be up in arms.

Elizabeth Razzi: The real estate trade association is always on the alert for this one. And the idea of cutting back on the tax benefits of owning a home could get more traction than usual in the next couple of years, given all the excesses of the boom and the pain of its aftermath. And this is one issue the trade associations will go to war over.

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Clifton, Va.: As a DOD civilian employee for 22 years and the son of Department of the Navy employee who was there for 30 years from the 50's through the 80's. We dont all move out when things change.

Most of the political appointees work in the area for think tanks and lobbyists for any new adminstration.

What has changed here in DC since 2001 is less military moving in and out!

Elizabeth Razzi: Thanks for the comments, Clifton!

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Gaithersburg: Along the lines of an earlier question about retirement homes...

When you see those ads to buy something like an acre of lakefront property in West Virginia, are they ever good deals, or are they always just over-priced and over-marketed.

Maryann Haggerty: I wish I knew. I mean, someone has made good purchases along those lakes, right?

Sometime in the distant past, my in-laws bought a couple of vacant pieces of ground in resort communities. (I swear they must have done it so that they could get the free night's stay in the hotel or something!) Anyway, 40 years or so later, those pieces of ground are still worth something, but not a fortune. If they had actually built on the lots, they probably would have been a good deal.

And then there's the legendary lot in Coral Gables, Fla., that my grandfather allegedly bought in the mid-1920s. He lost it sometime in the Depression (or perhaps he put it on a pony at Hialeah, who knows?) Anyway, if THAT one had stayed inthe family, it really would have been worth a fortune. Supposedly.

Elizabeth Razzi: I'm wondering the very same thing, Gaithersburg. Stay tuned.

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South Riding Again: I guess it's just fear. Fear that in 7 years we won't be able to refinance for some reason, and we'll be stuck selling/losing our house.

Elizabeth Razzi: Well, it's not like the bank hits an "eject" button once the 7 years is up. You could pay the newly adjusted rate at that time, at least for a while. It might not even be that bad a rate at that time--it's unknowable.

Maryann Haggerty: (Matthew 6:34. [Yes, I had to look the verse up.]"So do not worry about tomorrow; for tomorrow will care for itself. Each day has enough trouble of its own."

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Washington: Both my parents and my significant other's parents have offered to lend us money for a downpayment. This would be helpful, but obviously would need to be handled carefully. Do you have any recommendations on structuring this kind of transaction?

Maryann Haggerty: That's nice of them. The key is to get everything on paper, all neat and legal. The lender, for instance, wants to know how much money is lent to you, how much is a gift and how much is your own savings. Talk with a lending officer, a housing counselor or a lawyer. There are also Web sites out there right now that help you set up an arms-length loan (see www.virginmoneyus.com, but I know there are others, too.)

Elizabeth Razzi: That is very nice. I'd suggest talking with a local title attorney, the same one you'll use to handle the closing. Not to be a killjoy or anything, but prudence dictates that his parents' money and her parents'money be kept where it could be retrieved safely in case of a breakup. Not that that's going to happen, of course!

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Washington, D.C.: I am a resident-shareholder in a large (450 + units) cooperative in Washington, D.C. A few years ago, the coop took out a loan to finance some renovations, with a $5 million balloon payment coming due in 2010 (this loan was in addition to the coop's original mortgage, which still has several years to run). While our budget committee has already started the legwork of dealing with the balloon payment, I'd be curious what you think the impact of the credit crisis will be this situation. Thank you.

Maryann Haggerty: That would be a tough one if it were coming due right now--but by 2010, I would think either the crisis will have blown over, with a "new normal" in place, or we will be enmeshed in some situation we can't foresee yet.

Elizabeth Razzi: I agree. Be glad it's not coming due now, and keep the coop's finances in order so you can qualify for a refinance when the time comes.

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Arlington, Va.: to Silver Spring -- don't believe everything you see in satellite photos. Look at Ballston on Google maps and you'll see an outdated picture that doesn't show several large office buildings and a hotel that were all built in the last 5 years...

Maryann Haggerty: Oh, yes--I've sometime had great fun guessing how many years old some of those photos are. Take a look at the site of the Newseum on Google maps someday.

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Rockville, Md.: My wife and I are first-time home-buyers in Maryland and to help our home-buying effort my wife became a licensed realtor in MD. We recently made an offer on a short sale and the listing agent told us the bank, in California, would not pay the buying agent's 2.5% ($8,000) commission. As I understand it, in this case the entire commission goes to the listing agent. Seems like someone -- the bank or listing agent -- is walking away with our $8,000! We were expecting to use the $8,000 toward closing costs and now will really have to stretch to come up with enough cash to put 20% down. Is there anything we can do to get the bank or listing agent to cough up some of this money to us?

Elizabeth Razzi: Oh, man, the banks have such bigger fish to fry than this one! With short sales, they're trying to negotiate all the real estate agents' fees down. I'd be surprised if that buying agent is getting full commission. Could be that agent is squeezing you--but $8,000 seems like too little for you to lose a good deal over. Maybe you should try to negotiate the $8k out of the price, instead of calling it commission.

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Sunny California: Hi --

Here in southern CA the situation is as dire as it is in Vegas. I bought my condo for $500K in 2004, and comps are now going for 350K. Luckily I put half down. A friend bought downtown in the new high rises they are continuing to build for $800K with nothing down. She needs to refinance and was recently appraised at 450K.

On the other hand, the weather is nice.

Elizabeth Razzi: Ouch, ouch, ouch. The sunny attitude helps, I'm sure.

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Accidental Landlord: You could also require the prospective tenant to pull his own credit report. It only costs a few dollars, which you can credit off the rent if you accept the application...and those who are deadbeats and/or shopping every unit in town won't waste your time.

Maryann Haggerty: That's an idea, but I think I'd want to do it myself

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Falls Church, Va.: Just gloating. My husband I appealed our Fairfax County assessment and finally had the hearing last week. I'm happy to report that the Board of Equalization sided with us and lowered our assessment by $39,000. Even though our tax bill won't be that much lower the victory totally makes the seven and half months of waiting worth it.

Maryann Haggerty: Congratulations!

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Washington: Hi,

I have been looking for a house in DC for the past six months, but really in earnest for the past two. There seems to be a serious slow-down in the number of quality homes for sale, even from this Spring, which was already slow. Is it just me, or is this the case throughout the area? Thanks.

Elizabeth Razzi: It's almost impossible to guess what you mean by a "quality" home. A $2 million house in Chevy Chase? A luxe condo? Historic townhouse on Capitol Hill? $250,000 rowhouse in town?

Maryann Haggerty: There are roughly a quadrillion homes on the market right now, so I'm not sure what you're seeing

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20705: I think I read in 2000 that changes of administration affects the market for things like $20 million homes in Georgetown, but not for anything anyone likely to be reading this chat would care about.

Maryann Haggerty: We like to think that EVERYONE buying a $20 million house in Georgetown is on this chat.

Elizabeth Razzi: Maryann and I were fighting to grab that question! I believe you're seriously over-estimating the pay grades of federal employees--even at the top levels! They make their money before they get here--or after they leave. But not while they're here.

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Arlington, Va.: Let's be realistic... do you really truly believe Arlington, D.C. are somewhat housing proof...because I don't buy it...change in administration, government jobs or not?

This area saw one of the most ridiculous booms during the housing era. There are tons of foreclosures popping up in the condo area and they are steadily climbing and more and more foreclosures are popping up in the SFH area in Arlington and DC according to the latest SP report. More and more sale signs are popping up and more and more foreclosures are showing up on real estate sites.

My building I rent in can't even fill the units and it's been a year and the building is 25% occupied. That's a rental. Condo projects have been converted over or just stopped. Million dollar townhomes have been left to rot and be uncompleted (see Cherrydale Safeway). All these 'projects' and easy lending and speculation led to absurd price gains where a $250,000 1940s small brick cottage went up to $600K or more...where 1 BD condos went from $125,000 to $350K or more. Unrealistic appreciation based on speculation and easy money given to borrowers living beyond their means.

Seriously, can no one see this time bomb waiting to happen here?

Elizabeth Razzi: Perhaps you'd like to chat with the earlier poster who was complaining that rents haven't come down.

And, being realistic here, I really truly believe there is no such thing as "recession-proof." (That's the term you were aiming for, right?) I've been through at least two recessions in this area myself. But the big, old federal govt is about as steady an employer as you're going to find, and that does help dampen the swings here. Here's my beef with some of those statistics that only reflect price changes. In the District and parts of Arlington, many neighborhoods are dramatically improved places to live and work. Many, many people invested in expensive upgrades to their homes. That's not reflected in the statistics. Downtown DC has a vibrant 24-hour downtown culture that didn't exist before. Clarendon, for example (and I won't argue that it's not overbuilt at the moment) simply didn't exist in today's manner 10 years ago. Yes, the boom inflated prices here -- but that doesn't account for all of the appreciation. Not by a long shot.

Elizabeth Razzi: And it's not just Arlington, btw. Bethesda, Silver Spring, Largo. They've been transformed. Anyone want to nominate other areas?

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Anonymous: Hi ladies, No question, just a comment -- I'm in the process of refinancing an ARM into a fixed rate mortgage. Looks like the monthly payments will be about the same, which is good. But the paperwork is overwhelming! Why can't these things be simpler...

Maryann Haggerty: Because we need to be warned about everything. So read it, sign it and move on. But read it, OK?

Elizabeth Razzi: I always read that stuff. Front and back. And I ask questions. If somebody's going to plop a stack of legal documents in front of me and say sign here, here and here...you bet I'm going to take my time reading them. Ask to get your copies a day ahead of time, by the way.

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Baltimore, Md.: I agree with Bethesda!! Is anyone here old enough to remember the last housing crash of the late '80s?? The after-effects lingered for years. I bought my first condo in '91 for 10% less than asking, sold it in '98 for 15% less than I bought it for. Bought a townhouse in '96 when I married (one of the last two owned by the developer before he went out of business); I bought it for @ $75K less than my neighbors, and was THRILLED to sell it for $10K more when we unexpectedly had to move 2 years later.

The thing that lingers is the malaise -- the feeling among everyone out there that things would Never Get Better. Turns out, we sold out right at the start of the boom; by the time we moved back 5 yrs later, I could no longer afford my old townhouse, which had more than doubled in value! But I still find it striking even today how absolutely hopeless everyone was that things would ever turn around -- a full decade after the crash was supposedly "over."

So, no, I do not expect a rapid turnaround. It's not like the stock market -- it just doesn't move that quickly.

Maryann Haggerty: And another thing I have observed over the years--peple generally have a lagging perception of the economy, up and down.

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Elizabeth Razzi: Well, thanks everyone. Drive carefully this evening and keep an eye out for the little ones. This Sunday's column will be about what you face if you're thinking about becoming a small-scale real estate tycoon.

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Maryann Haggerty: Time is running low here. Thanks for joining us. I invite you to take a look at the Saturday Real Estate section, full of advice and observations. And look for Elizabeth's column Sunday in the Business section, too.

Now, on to enjoy the last pre-election weekend -- two years ago, did we think this time would ever come?

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