During French class Saturday, I discussed an article that was in the WaPo's real estate section that day and learned a new verb: dégringoler, which can mean "to tumble" [a reputation], "to tumble down" [a person], or "to collapse" [price]. The verb comes to mind when considering the consequences of the actions reported in the article.
According to the WaPo, effective May 1 AIG United Guaranty, which sells PMI insurance, "no longer will write coverage on condominiums in hundreds of Zip codes across the country that it designates as having "declining" market conditions, including some in the Washington area." I went to AIG's website and downloaded their "declining markets" tool - every zip code in the District is classified as being in a declining market.
Several mortgage companies, e.g., GMAC and TB&W, have already announced they'll require buyers in declining markets to put more money down towards a purchase. Both firms list all District zip codes as being in a declining market. Basically, if you want to buy a home/condo in a declining market, you'll have to make a minimum 10% down payment.
So, if it's harder to get a first loan and impossible to get PMI coverage in the District, what do you think will happen to the District's condo market?
Je dégringole, tu dégringoles, le marché dégringole...