by Brandon M. Scott
The real estate market and DC Summer 2023 are both hot and unpredictable. Today, we are going to delve into the fascinating world of Washington DC’s real estate market and see how it stacks up against the national market. Here’s where things start $625,00 – the July median sell price, which is down 3.3% year-over-year and up 3.7% month-over-month.
Properties continue to fly off the market in DC and that is driven by a shrinking inventory of available properties. Resale home have primarily made-up 88%+ of the total homes sold, yet we are seeing new construction making up 20%+ of the real estate inventory that is sold. Current owners are delaying selling their home in the face of higher rates than their existing mortgage payment. The pressure is on, and the real estate market is taking the blows front and center.
In National News, real estate is having a moment across all sectors. The real estate market is influenced by various factors such as, economic conditions, interest rates, and global events. There are a mix of opportunities and challenges, with some cities experiencing growth and others seeing a decline.
Commercial Real Estate is seeing new players. Wall Street firms are gearing up to acquire commercial real estate assets at discounted prices, indicating a potential slump in commercial property values.
Then there’s residential real estate, it seems to be a recurring national trend. While there is less inventory there is an increased interest in house flipping, especially in certain U.S. states, suggesting that there might be opportunities in the residential market for investors.
And we cannot forget about luxury real estate. We are seeing market forces and local laws impact places like Southern California with mansion sales falling. Due in large part to new taxes on luxury home sales
The Unique Charm of DCs Real Estate Market
Shifting gears to Washington, DC. The nation’s capital is not just a political hub, it is a thriving city with a dynamic real estate market. From the historic charm of Georgetown to the burgeoning development east of the Anacostia River, DC offers a diverse range of properties that cater to different tastes and budgets. And each year we see the budget needed to live and thrive in Washington, DC increase. That cost for housing increases that much more when factoring quality neighborhoods and childcare services. Although expensive, there is a charm and vibrance to the city and a clear desire of people to live here, which contributes significantly to faster rates of appreciation and rent prices, as demand to live in the city, or around it grows.
Comparing DC to the National Market
When we compare DC’s real estate market to the national market, a few things stand out. First, DC’s market tends to be more resilient. Thanks to its status as the capital and the steady influx of government employees, DC’s real estate market can weather economic downturns better than many other cities.
National markets and resiliency will vary too. While aggregating data can be helpful real estate is a local commodity and, in additional to the market forces, local forces have a significant impact on the local real estate market.
The Impact of Current Trends
Now, let us talk about the current trends. Nationally, we are seeing a shift towards suburban living, driven by the pandemic and the rise of remote work – both for renters and home buyers. However, in DC, the story is a bit different. While there has been some movement towards the suburbs, the city’s robust job market and cultural attractions continue to draw people into the city. This creates a demand for development and many of us have seen the cranes sweeping the DC skyline. With the absence of more land developers are forced to build up and to convert previous office spaces. Conversely, more [commercially] undeveloped areas of the city will begin to gain favor, like communities east of the Anacostia River. Those communities have seen a rise in residential development, and the infusion of commercial space will revolutionize the area and attribute to an across the board increase in DC property values.
The Bottom Line
So, what does all this mean for you? Whether you are a buyer or a seller, understanding the dynamics of your local market is crucial. This is not your mother and father’s DC, that means be recognizing the city’s changes will strengthen communities, while understanding how they influence property values. Plus, future development and local policy will further shape the space we call home – Washington, DC.
Remember, real estate is not just about buying or selling a home. It’s about making informed decisions that will benefit you in the long run. And as always, I am here to help guide you through that process.
Brandon Scott is a licensed real estate agent in Washington, DC, Maryland and Virginia. His license hangs with Keller Williams Capital Properties, DC. He’s been involved in the mortgage finance industry for the last 22 years in various fields. You can reach him by email at [email protected]. Subscribe to his YouTube Channel at RealTeaDMV