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Dear Iron Eagle,

There are still a few pockets of affordability in the DC area, mostly in Prince George's County, MD.

However, even many of the neighborhoods there are getting pricey.

I sold a house near Bowie in 2000 for a bit over $200,000. The fellow who bought it from me sold it this past year for over $350,000.

The neighborhoods where my wife and I grew up have seen about 100% appreciation in the last five years.

As for Arlington, well, heck, it's nearly walking distance to downtown, as well as in the middle of its own business district.

Folks are going to pay for location. Always have, always will. You take a couple of government middle managers, say a GS-13 and a GS-14 (or their equivalent in the so-called private sector), married, and their household income may near, or even top $200,000. With those kinds of bucks walking in the door every month, it isn't a stretch at all to get to a six hundred thousand dollar mortgage.

I asked a buddy of mine who is very knowledgeable about all things financial, and he says one thing that is beginning to drive the housing market is that a lot of parents of baby boomers are now dying, and many are leaving substantial assets to their boomer kids. Not enough to go live on the Riviera, but enough to put 20% down on a $700K or $800K house.

I'm a boomer, myself. My mother died in late 2003. My father's health isn't great, and I help him with his estate planning. I know that when he dies (he's nearly 80), his four kids will come into a modest fortune.

If I weren't already in the house in which I want to live, it would certainly give me enough, when combined with what equity I already have, to put down one very hefty downpayment on a new house.

As well, folks are still hesitant about the stock market, and buying a bigger house is an alternative means of investing for a lot of folks.

I think that there are a few regions that may be ready to burst. I don't think the Washington, DC metro area is one of them.

Yet.

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