I've always wondered why Washington's real estate prices were so outrageous. I know the region offers a good of life, and th environs are easy on the eyes, but Washington is a center of government. Government is the major employer ... and to me, it seems like there's absolutely no correlation between government salaries and the cost of housing. Housing is priced as if everybody is a lawyer, lobbyist or pundit with a book deal..
"Supply and demand," you'll say. Sure, there's a big demand for housing in the DC area, but what happens if the primary market for your product, in this case housing, can't afford it? It's not merely expensive ... it's out of reach. Still, people are buying, and middle class folks aren't homeless or living in hovels. I have no idea how a married couple of government workers, maybe making $100,000 between them, can afford a $700,000 house.
Also, I think outrageous real estate prices are a fairly recent phenomenon. Was housing also extremely expensive during booms in the past? Were famlies waiting in line to bid the equivalent of what was $700,000 in 1920 dollars for a bungalow in the then-hot cities of Buffalo, Detroit or Cleveland? I know there were times when LA, New York, and DC were considered cheap places to live. Was there ever a time when someplace like Pittsburgh or Youngstown was considered expensive?