“Rex, I bought my house in 1991, not far away from Alexandria. Even if it loses three quarters of its value, if I sold it I’d still make a killing relative to what I could have made in the stock market or any other investment instrument over those years.”
The key here is selling it - the markets across the country are overbuilt and have massive amounts of inventory that’s not selling. That’s why this is happening, why foreclosures are growing - nobody can sell, because nobody is buying. Take a look in your area, and see how long houses are sitting on the market - the appraisal you’re basing your “killing” on may not be accurate anymore.
If you can afford your mortgage, and have a fixed loan, more power to you, you’ll be fine (except having your purchasing power diminish with a recession). If you have to sell, for any reason...you may be in for a surprise.
There's one thing about Washington DC: every two years a new influx of political hangers-on arrives and needs housing, so the real estate changes hands. Yes, there's a massive amount of backed-up inventory, but some houses still do sell if their owners aren't greedy and don't ask an unrealistic price, as if it's still 2005.