Buying Still Trumps Renting in D.C.
With a median home value of $568,400, Washington D.C. often grabs headlines as one of the country’s most expensive places to live. However, the city is also home to one of the nation’s highest household median incomes of $82,604. While newcomers might be tempted to rent their places, those who opt to make a little extra room in their budget to purchase property could be better off than renting.
1. Limited Housing
As we discussed in 3 Ways D.C. Real Estate Agents Can Find More Inventory, inventory in the red-hot D.C. real estate market is scarce, and thanks to some old legislation, it’s not likely it will get better anytime soon.
The Height of Buildings Act, enacted by Congress in 1910, limits the height of residential buildings in Washington D.C. to 90 feet, with the Washington Monument being the exception. With only a few outliers over the past 100 years, the total number of properties in the area has remained relatively the same. Even with this limited space, D.C.’s population continues to grow at 17 percent.
2. Record-Breaking Tourism
In 2018, our nation’s capital welcomed a record 23.8 million visitors who spent a total of $7.8 billion while there. That’s the ninth consecutive year the record has been broken, and with current development challenges it has some investors looking at Washington D.C. for their next AirBnB venture.
“Our goal as an economic development organization is to drive visitation and create revenue for the District, so we’re thrilled to see the results of an additional one million visitors last year,” said Elliot L. Ferguson II, President and CEO of Destination DC.
3. Jobs Are Strong and Steady
Washington D.C. and the surrounding metro area have long been touted for their many stable, good-paying government jobs, however the city is experiencing growth in a myriad of industries. D.C. was ranked the fifth best city for job growth, with significant growth in industries like business and professional services. Just last year, Amazon announced that Arlington, VA would become the future home of HQ2 — an announcement that sent surrounding property prices through the stratosphere.
In the end, severely restricted inventory, coupled with steady job growth and increasing demand from tourism and population growth, means properties are forecasted to continue their increase in value. Adding in the recent drop in the Fed’s cut on treasury rates, the time to buy could be now.
While renting might tempt your clients with lower monthly payments, those who choose to purchase can continue to build equity and value in a D.C.-area property with relatively low risk. As seen in other high-end markets and the prices they fetch, there’s still a lot to give in Washington D.C.
Want to Become a Local D.C. Real Estate Expert?
The CE Shop’s courses are engineered to help you ace your exam on the first try and get you well on your way to being a successful real estate agent. From Pre-Licensing to Continuing Education, we’re with you every step of the way. Choose the best today!