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The Pentagon, War Funding, DC Real Estate, and "Won't Someone Please Think of the Children!"



November 21, 2007 – Comments (5)

Cue Mrs. Lovejoy voice.

Won't someone please think of the Children?!

That's about the substance of the latest Pentagon sob story aimed at trying to shame Congress into passing another $200 billion (unpaid for, of course) in war funding.

"The Defense Department warned yesterday that as many as 200,000 contractors and civilian employees will begin receiving layoff warnings by Christmas..."

Awwww... See! You must pass this bill, otherwise some people might lose their jobs. (And at only $1,000,000 per job, this defense department job entitlement plea is a real bargain!)

I have two thoughts on this. The first is, "Good." Let the savings commence. Taxpayers are being soaked incredibly by all this endless and wasted military spending, and in the DC area, where much of this money goes, a lot of it is being wasted on houses that sell for $600,000 or more, houses that would bring in $200,000 anywhere else in the country. (When capital seems free, it tends to be allocated in horribly wasteful fashion.)

The second is, what if the layoffs actually come? The RE market in DC is already dying a slow death. Take away a pile of jobs, when there's already a ton of inventory on the market, and builders continue to pump out supply -- especially condos -- and there's bound to be a real crash, especially since lending, particularly Jumbo, is tight, and refinancing won't be an option because prices have dropped and many housing bagholders are sitting on a significant pile of negative equity.

5 Comments – Post Your Own

#1) On November 21, 2007 at 8:59 AM, TMFBent (99.57) wrote:

Whoops, forgot the link to the original, Washington Post article.

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#2) On November 21, 2007 at 9:43 AM, wingedcreat0r (42.55) wrote:

I can't see this happening, but cutting costs would be nice as you stated. 

Also, what about the thousands of jobs coming to Ft. Meade? And those hundreds of townhomes and apartments off of route 32?

I wonder how Northern VA's and Fredrick, MD's RE market is. Being that most high level Fed employees live there... much more than inside DC I believe.. but I could be mistaken.

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#3) On November 21, 2007 at 10:32 AM, TMFBent (99.57) wrote:

I can't speak for Frederick, I don't think, but the numbers I see for DC usually include the surrounding area, out as far as Fairfax on the N. Virginia side at least...

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#4) On November 21, 2007 at 11:21 PM, TDRH (97.19) wrote:

Maybe you will find a deal?   As for the war, the safest and fastest way to bring the "boys" (and girls) home gets my vote.   The "Mission is accomplished".

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#5) On November 22, 2007 at 12:43 AM, abitare (29.90) wrote:

DC real estate is in free fall all ready. The amazing thing is amount of new buildings going up and the McMasions still being created. Their is development going on downtown with 9 high rises under construction. The condo market is flooded.

It is going to get ugly for some owners.

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