Market Spotlight: Washington D.C.
DC Tops List of Healthiest Housing Markets
Two weeks ago, we mentioned, Clear Capital’s Home Data Index™, which covers national real estate price trends. Washington, D.C., hovered near the top of the list of the highest-performing markets over the last few months. Today, we’re going to zoom in on the housing market in DC.
DC is part of the Northeast sector, which posted the second highest price increases (following the Midwest) over the last quarter. Although October’s price increases slowed, DC still posted a 5.7% increase, making it the third best housing market in the country. In addition to that, DC posts the third lowest saturation rate of REOs. See our data below for the breakdown of unit types for sale:
Affluent Suburbs Dominate Growth in DC
A few weeks ago, Bloomberg Businessweek ran a story on America’s best- and worst-performing housing markets. Of the top 25, 9 markets were in the DC metro and Virginia suburbs! The Wall Street Journal attributes this, in part, to “politicians and lobbyists buying McMansions”. True or not, there are jobs in DC, which likely has something to do with the region’s performance. Here is a quick profile of the 9 mini-markets where prices continue to rise:
- Ashburn, Virginia – well-to-do suburb of DC with great schools, including a campus of George Washington University
- Burke, Virginia – affluent community full of parks, pools, and cul-de-sacs
- Chantilly, Virginia – home to the National Air & Space Museum
- Herndon, Virginia – small town near the Washington-Dulles Airport
- Leesburg, Virginia – about 40 miles from the capital, this town is known as a “bedroom community” for DC commuters
- McLean, Virginia – wealthy DC suburb, home to many government employees as well as the headquarters of major financial institutions
- Reston, Virginia – affluent community near the Washington-Dulles Airport
- Sterling, Virginia – another suburb of the Capital as well as host to major tech companies like AOL
- Vienna, Virginia – a beautiful, high-priced community with gardens and country clubs
All of the strongest markets are on the west side of the Capital in the Virginian suburbs; in fact, only one of them – McLean – is located within the Capital Beltway (Interstate 495). To get a better view of what’s happening in the DC housing market, I called one of our awesome ZipREALTOR®s, Wayne Mann, who has been serving the DC metro for many years.
An Insider's View
“Performance is very specific to the area,” Wayne said, “and if you work in real estate in this area, you’re going to differentiate between inside the Beltway or outside.” Inside, there are government jobs and other pharmaceutical or tech companies keeping the local economy afloat. Outside, you see more extremes.
In Prince George’s County, Maryland, which lies southeast of DC, there is a much higher rate of foreclosures and thus, lower prices and more devaluation; the northwest, on the other hand, is home to the affluent suburbs where many government employees buy homes. “The northwest is carrying the whole region,” Wayne said. So while DC is posting better growth than most metros nationally, aside from a wealthy sector, the regions’ prices are still flat and the inventory is still haunted by distressed homes.
Surely the coming winter weather has something to do with the slowdown! “Well, we usually have a ‘fall bump’ between September and mid-November where we get a few more sales,” Wayne said, “but not this year.”
So despite the health of the wealthy DC suburbs, it looks like this year in DC and in the national housing market, winter came a bit early.