The Washington D.C. real estate market continues to make commendable strides since the housing recovery, with significant growth in 2013 and 2014. Growth in the nation’s capital, which has surpassed the national average in recent years, simmered in 2015 — and so far the first-half of 2016. While still slightly above the national average, the Washington D.C. real estate market is forecasted to almost double in the next 12 months.
For Washington D.C. investors, the real estate market has enjoyed subtle appreciation gains in the past year. The current median home price for the real estate market in Washington D.C. is $370,400; compared to the national average of $215,767, with prices expect to grow relative to previous years. However, home appreciation gains in the Washington D.C. real estate market haven’t been as praiseworthy. That said, the market has still managed to achieved a 0.7 percent gain in the past year, while the last three years has seen an appreciation rate of 6.2 percent. Although below the national market, the Washington D.C. real estate market is poised for a bounce back year.
Washington, D.C. Real Estate Market Statistics:
The Washington D.C. real estate market continues to maintain steady growth, and investors in the D.C. area should continue to remain optimistic. It is important to take note of price appreciation and principle payments in the Washington D.C. area, as they have boosted total equity growth. In order to illustrate the amount of equity Washington D.C. investors and homeowners have accumulated since the recession, we have broken it down as follows:
- Homes purchased in the Washington, D.C. housing market one year ago have appreciated, on average, by $8,773. The national average was $15,781 over the same period.
- Homes purchased in the Washington, D.C. housing market three years ago have appreciated, on average, by $40,574. The national average was $49,356 over the same period.
- Homes purchased in the Washington, D.C. housing market five years ago have appreciated, on average, by $98,173. The national average was $68,727 over the same period.
- Homes purchased in the Washington, D.C. housing market seven years ago have appreciated, on average, by $121,541. The national average was $59,758 over the same period.
- Homes purchased in the Washington, D.C. housing market nine years ago have appreciated, on average, by $3,099. The national average increased $16,435 over the same period.
Washington, D.C.: Real Estate Market Summary:
- Current Median Home Price: $370,400
- 1-Year Appreciation Rate: 0.7%
- 3-Year Appreciation Rate: 6.2%
- Unemployment Rate: 4.1%
- 1-Year Job Growth Rate: 2.8%
- Population: 601,723
- Median Household Income: $91,193
Washington, D.C.: Real Estate Market (2016) — Q1 Updates:
The real estate market in Washington D.C. has been fairly tame compared to previous years, with highlights in median home prices and home affordability. Additionally, the job sector remains better than the national average and continues to improve. The current unemployment rate is 4.1 percent, down 0.5 percent from last year, and lower than the national average of 5.0 percent.
Surprisingly, home affordability in the Washington D.C. real estate market continues hover below the national average. The first quarter of 2015 saw the monthly mortgage payment-to-income in Washington D.C. reach 12.2 percent compared to the national average of 14.5 percent, with home affordability increasing 3.4 percent in 2016. The Washington D.C. real estate market is now one of the more affordable markets in the nation.
One problem facing Washington D.C., including the rest of the nation, is the number of available homes for sale. Despite fewer homes, the first quarter of 2016 saw the average days on market for Washington D.C. properties last 39 days, down one day from 2015. With less homes and increased demand, new housing construction is on the rise. The current level of construction in the Washington area is 18 percent above the long-term average, with construction on the rise relative to last year.
Another positive factor influencing the real estate market in Washington D.C. is demand from millennials. In fact, the National Association of Realtors (NAR) recently ranked the top 10 purchase markets for millennial homebuyers, those 18 – 34 years of age, with Washington D.C. making the list.
Moving forward, the Washington D.C. real estate market is forecasted to experience significant growth in home prices. The first quarter of 2016 has seen a 6.3 percent increase in home prices compared to the national average of 3.8 percent, and the National Association of Realtors expects higher price growth for the Washington D.C. market in the next 12 months.
