1) Despite rising interest rates, houses will continue to fly off the shelves.
If you take a look at Capitol Hill market over the past 8 years, an average of 684 homes were sold per year. In 2016 what was that number? Exactly 684. So, we are entering 2017 right in line with where we have been over the past 8 years in terms of the volume of houses sold.
But that volume doesn’t tell the whole story. We also want to look at DOM (days on market). The DOM has been ticking up a little over the past few years – for instance, in 2014 a house that was listed as active took 23 days on average to go under contract, that number in 2016 crept up to 27. Does that indicate things slowing down a little? Yes. Reason for panic? No.
2) A change of Administration won’t affect the market.
Historically speaking, the influx of new politicos and cabinet members is just a blip in the overall housing market – not enough for us to see any real change. Sure, there will be a few stories about a few billionaires buying multi-million dollar homes, but is our memory so short that we forget about Paulson, Pritzker and many others? This ain’t new news.
When we look back to the last time the Administration changed (2009), its hard to draw any overall market conclusions and comparisons though. At that time America was in a recession that was absolutely killing the housing market nationally. Locally, Capitol Hill wasn’t totally immune from its effects, (DOM jumped up to 83 that year) but our average number of homes sold was 676, only 8 off of our average. So despite the headwinds we faced, houses continued to be sold, just a little slower than normal. Unless something drastic happens, we will see much of the same this next year.
3) The capitol Hill “starter home” goes the way of the dodo bird.
Looks pretty bleak if you are a buyer looking for something affordable out there. If you are looking to live south of Florida Ave or Benning Road, it looks like $700,000 is the new $500,000…
Which brings us to prediction #4…
4) East of the river is hot – and will continue to heat up even further.
Sometimes people refer to “East of the River” (EOTR) and Anacostia as the same thing, but if you have ever spent much time in that area of the city, you start to realize that each neighborhood has its own unique flavor (think Capitol Hill vs. Brookland – geographically not that far apart, but experientially very different).
Different areas EOTR have seen different real estate “bumps” over the past few years, but don’t be shocked to see Historic Anacostia, Fairlawn, Penn Branch & Randle Highlands see 8-15% price increases over the course of this coming year.
With Busboys and Poets slated to open this year, and more buildings in the Department of Homeland Security to be opened (not to mention the Department of Labor possibly moving EOTR), more and more people will be working EOTR, and will ultimately decide to live there as well.