Buyer’s or Seller’s Market?
Before we can know whether Washington, D.C. favors buyers or sellers, we must understand the implications of the two different market types. A buyer’s market benefits homebuyers because there is a larger supply of homes for sale than there is a demand, meaning properties often stay on the market longer. A seller’s market exists when the supply is lower than the demand for available housing. When competition is high in a seller’s market, properties are sold quickly and at ever-increasing prices.
In the past year, buyer conditions in Washington, D.C., like most of the country, have improved. Although the market has briefly softened, expect market dynamics in 2020 to create a tighter, more competitive housing market that favors sellers. Data from the most recent quarter shows fewer listings for mid-range properties, which creates a competitive market for prospective buyers throughout most of the city.
When you combine these perfect conditions for bidding wars with low mortgage rates throughout the area, the contest for available listings in Washington, D.C. becomes steep, despite its considerably higher cost. The high demand for capital living has been known to nearly double the average housing price as compared to the national median. While there are more affordable neighborhoods—which is music to the ears of buyers—rest easy knowing that Washington, D.C. has one of the nation’s strongest economies, so purchasing property in the area is likely a good investment.
Breakout Neighborhoods to Watch
Community and real estate go hand in hand. Putting roots down in a city often coincides with the desire to cultivate a sense of community—a place where people come together to build long-lasting relationships and nurture a sense of belonging.
Washington, D.C. is the sixth most populated metropolitan area in the country, and it continues to grow. Every person who comes to Washington, D.C. brings a story, and it is in the city’s melting pot that diverse and exciting neighborhoods are formed. Here are three breakout neighborhoods to keep your eye on in the coming year:
What is one of the city’s—and the nation’s—hottest areas is also one of the most attractive to homebuyers. This northeast neighborhood is one of the city’s oldest, rich with the charm of wood-and-brick 20-century homesteads that resemble small-town streets despite its metropolitan location. With metro service provided by the Orange Line, Deanwood remains accessible while maintaining its quiet appeal. Despite the area’s unique attractiveness, housing prices average nearly half as low as the city’s median; around $312,000 compared to the larger D.C. area’s over $500,000 average.
It is no surprise that waterfront areas are uniquely appealing—watching the sun set over the Potomac River on the Georgetown waterfront is an amazing way to end a day—but Georgetown isn’t the only riverfront on the block. Along the Anacostia River just south of Capitol Hill is the Capitol Riverfront, a must-watch for new developments and neighborhood expansions. This mixed-use neighborhood reflects what the PWC’s Emerging Trends in Real Estate report for 2020 calls “Hipsturbia.” The desire for a “24-hour city” where residents can live, work, and play within relatively small proximity has swept the nation over the last quarter-century. Capitol Riverfront is the area’s fastest-growing waterfront neighborhood, and its mixed-use design is particularly attractive to young professionals.
H Street NE
H Street has experienced a rebirth in recent years that has resulted in a mile-and-a-half oasis for nightlife lovers, art aficionados, and foodies. No matter what you’re craving, H Street is ripe with restaurants, from nationally-acclaimed bagels to Taiwanese hot pot. This area is known for its wide sense of community, and it continues to grow as more people call one of its brightly- painted rowhouses home.
Decoding D.C.’s High Demand
Year after year, people continuously choose to migrate to Washington, D.C., which directly impacts the demand for housing and, as a result, its real estate market. There are a number of reasons why newcomers are drawn to the area and why residents stay, keeping housing supply short. Let’s take a look:
Washington, D.C. has been awarded numerous accolades, including #5 Best Cities for Young Professionals in America and is one of the top cities for outdoor activities in the country. For the up-and-coming health-conscious generation, this is the perfect place to live.
New families look to Washington, D.C. for its excellent educational factors. As the nation’s leader in arts, science, and history museums—thanks to the Smithsonian Institute—the city’s appeal to young intellectuals is undeniable. Raising children with a well-rounded education is important to their future success, and having access to the free, premiere educational facilities found in Washington, D.C. is a splendid advantage.
Retirees also find a home in Washington, D.C., which ranks 12th when compared to the nation’s 100 largest metropolitan areas. Why did this year’s ranking drop? Because of the city’s short supply of listings, the increased housing cost nudged it out of the top ten. However, other factors, such as the city’s happiness index, healthcare quality, and desirability, keep our capital city near the top of the list.
Expect the seller’s market in the nation’s capital to reflect the continued demand for these pristine amenities. Washington, D.C. is an extraordinary location with unique opportunities, and buyers know it. No matter what walk of life you’re in, 2020 is a new year filled with new possibilities, and Washington, D.C. real estate is an incredible place to experience it. If you’d like to find out more information on Washington, D.C. luxury real estate, please contact me today.