Prominent Investors and Bankers Show Interest in D.C. Real Estate Market

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The Washington D.C. real estate market has been anemic for the last few years. Sales have fallen in seven of the eight months since the government shutdown and probably will remain stagnant this year. However, prominent financial professionals seem confident that the market will grow in the next couple of years.

Many investors have started purchasing houses and commercial properties throughout the D.C. area. This could be sign that is a good idea for middle class families to start purchasing homes in D.C.

Real Estate Investors Purchase More Properties

Ron Paul, the CEO of EagleBank, has said that real estate loans have increased significantly in recent months. Paul said that most lending applications have been filed by private investors.

Paul is confident that investors will continue to purchase properties throughout D.C. in the months to come. He said that the job market has improved significantly in recent months. Paul believes that the local economy will continue to grow in the months to come, which will drive the D.C. housing market.

Paul’s opinion of the Washington D.C. real estate market is corroborated by new data from Zillow and other real estate listing services. While home prices in the D.C. area are about twice as high as the national average, middle class families aren’t priced out of the market. Lower priced houses account for about 25% of the inventory on the market. Few middle class families can afford to purchase properties in New York, Boston and most other metropolitan areas, so D.C. can be a good alternative.

Being a good alternative to those other major cities, the housing market is expected to thrive as more middle class families relocate to D.C. Savvy investors are acquiring properties with the expectation values will appreciate in the near future.

Real Estate Professionals Remain Optimistic

The new trend is encouraging to real estate professionals throughout D.C. and Virginia. Many of the properties in the region are historic homes or large complexes. New homeowners face a learning curve with these properties. They are probably more likely to rely on contractors or handymen for assistance, which is great news for the local remodeling market.

Real estate agents are optimistic that the market will finally begin to grow once again. However, many were discouraged by a new report from RealEstate Business Intelligence showing that sales dropped 4.5% last month. The market has been understandably tepid since the government shutdown. However, there are signs that things are going to improve soon.

Most of the decline was driven by government layoffs, which makes sense. However, the private security is starting to pick up the slack. Private job growth has been unusually strong in the area, which indicates that federal austerity measures have only been a temporary bane for the region’s housing market.

The sluggish housing market has been discouraging for real estate professionals in recent years. However, leading indicators tell them that the market may turn around in the next year or so. Savvy consumers realize they may have a small window of opportunity to take advantage of depressed prices of foreclosed properties. Prices of distressed properties have been unusually low, but they will likely increase as more institutional investors acquire them.

The other good news for current D.C. area homeowners is that now is a great time to do work on their older homes. Return on investment for many remodeling projects is expected to be much higher as home values are expected to rise. Also, those new to the area can rely on expert contractors in the D.C. metro that are familiar with the local building codes and have historical renovation expertise to make sure their new homes are properly maintained.

How Alternate Transportation Options are Boosting Washington D.C.’s Real Estate Market

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While this is a little off topic from our standard remodeling articles, I wanted to share some good news about the Metro DC area.  I’ve gotten many of questions from my clients that pretty much ask: “is it a good time to invest in my home?” Rest assured that buying or owning a home in the DC area is as valuable as it ever has been. A great part of this has to do with the great amount of alternate transportation options springing up in the area.

Property values are usually higher in communities with public transportation systems. People want to live in communities where they can move around easily. A recent report from Smart Growth America shows that access to public transportation is one of the reasons that the real estate market in Washington D.C. is so strong. The study shows that it has a higher walkability score (i.e. ability to travel without a vehicle) than any other metropolitan area in the country.

Growing Importance of Public Transportation

 

The U.S. Census Bureau has classified all metropolitan areas as either “central cities” or “outlying counties” for the past sixty years. However, Smart Growth America states that new development patterns have made those classifications obsolete. They have said that it was more important to assess whether people could travel easily without a vehicle. There are a number of reasons that public transportation is becoming increasingly important:

  • Rising gasoline prices
  • Aging baby boomers choose to stop driving (or can no longer drive safely)
  • Economic downturn makes owning a car more difficult
  • Growing interest in green living

The number of Americans that drive is expected to continue dropping in the years to come. More people are expected to move to areas with strong public transportation systems, which will ultimately drive housing demand.

How D.C. Received the Highest Walkability Score in the Country

 

Smart Growth America wanted to see how easily people could travel in various metropolitan areas without a vehicle. They created a specific index called a Walk Score to measure how easily people could run daily errands and commute to their job without a vehicle. Areas with a high Walk Score were classified as Walkable Urban Places (WalkUPs).

The researchers studied the commercial regions of each city and measured the Walk Score. They found that Washington D.C. ranked higher than every other in the country. This was a surprising finding, because many experts believed New York City had the most effective public transportation system.

Washington D.C. has always striven to make public transportation a top priority. The city currently has the second busiest public transit system in the country. The city’s transportation system isn’t perfect, but it has helped the city’s 650,000 residents complete their errands and get to work each day without having to rely on a vehicle.

Uber and Lyft have also made it much easier for people to get around the city. The city may be able to discontinue those services after it creates a more efficient public transportation system.

Incentives to Remain in the D.C. Area

 

With how easily one can commute to a job without the necessity of a vehicle in the DC area, it creates more incentive to remain in the area. This may mean that your home has some deferred maintenance that should be dealt with. You can always count on the reliable experts at CITY Renovations to handle any job you need done, no matter how big or small! The emotional value of enjoying a well-maintained, properly operating home cannot be overstated.

We’re proud to service the Metro DC area, one of the most job-accessible regions in the country. We hope that while you’re living here that you’ll choose us for all of your handyman and remodeling needs!

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