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DC Housing Market Slowing finally, now i have questions.


Tourniquet416
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In the DC area closing costs range from 5 - 10 % of the purchase price.

Usually they come in right at about 6.5%. There are lots of factors that affect the closing costs, Type of finanacing, LTV, Date of settlement, time of year in relation to the tax due date, etc. etc. ....

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If i luck out in the next six months and find a condo or house for under $160,000, if all i have to pay is closing costs, about how much would that be? I'm hoping it's below $5,000?

I hope to have my scores to the mid-600s by then.

I think you will still be hard pressed to find something decent for under $160K in that area even if the market is slowing down..DC and suburbs have always had a steady growth, and was not a bust and boom area....

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Hey CreditDiva,

I think you will still be hard pressed to find something decent for under $160K in that area even if the market is slowing down..DC and suburbs have always had a steady growth, and was not a bust and boom area....

I agree with you that is it hard to find housing at $160K.

However, every responsible forecasting model and organization predicts that there will be a contraction in the housing market in DC in the next 18 months. I lived throught the 1991 recession in DC. My starter townhome fell 14% in value in September 1991 and the prices didn't recover until 1998.

Conservative economists predict that the price of homes will fall 5 - 15 % depending on location and price.

The sector of the housing market that is least likely to see significant decreases in prices are the lower priced beginner homes/condos... So I don't think there will be a major reduction in starter housing prices like in 1991.

Best wishes,

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There are hundreds of forecasting models to choose from, most are available on the web. The most reputable are reported in the national news every few weeks or so. Here is a prime example of a forecast based on a private model, (investor.)

http://money.cnn.com/2005/10/21/news/newsmakers/barrack/index.htm?cnn=yes

There are models that are funded by private compaines to support their marketing efforts (usually rather dubious,) and then there are models that are maintained by news organization, universities and reputable economics or finanace companies, ( Goldman Sachs, Johns Hopkins University, Merril Lynch etc...)

Here is a great intro to economic forecasting models with lots of reference names to search for if you choose.

http://www.findarticles.com/p/articles/mi_qa3815/is_200201/ai_n9031049

Here is another resource...

http://www.proximityone.com/hpi.htm

Basically, you can't believe one model over another model. You look for Consensus amoung responsible forecasters models (news organizations are not too bad,) then you can believe that a certain trend exists.

If you are looking for a model or forecast for a small geographic area, start with your county assessors office, they have to forecast future cash flows for the budget office. You local or state development council is another good place to research forecasts for a small local area.

Good luck...

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