In this case, your tax money. How else to explain DC’s disconnect from the rest of the housing market?
According to the Case-Shiller Index of Housing Prices, DC is the only metro area to see its housing prices increase over the last year, even as the rest of the country fell into a double-dip:
Washington’s percentage increase was larger than 10 other areas’ percentage decrease, so it wasn’t as though it was just eking out these gains. You can see the disconnect even more clearly in this chart of housing prices over the last couple of years, comparing DC to the 20-market index and a couple of representative markets:
DC starts to dip with the rest of the country in late 2010, and then, right at the end of the year, as opposed to every other market in the country, it revives. If all that extra cash came to late to save all those Democrat representatives and senators, at least they got a good price for their DC pads.
It’s not as though DC didn’t suffer a pretty serious decline in housing prices, but it’s not as though this comeback is a result of reversion to the mean from an exceptionally severe drop:
That chart shows the percentage drop from the local market peak to the market trough.
Other areas had made gains, but they’ve given most or all of them back. All except for DC. Only San Francisco is higher above its trough than DC is, but look at how much even of its recovery has evaporated:
When I was growing up, there was a notion afoot that DC was recession-proof. Then, as the area matured, and the economy diversified, that perception began to weaken. If you don’t hear Washingtonians saying it again, it’s only because they’re afraid it might be poor salesmanship.
After all, when people are starting to compare the national finances to those of Louis XVI, it’s probably not a good idea to let on that you’re living in Versailles.