By York Van Nixon III
In the midst of declining national real estate values, Washington, DC continues to be one the few markets in the country posting gains in price and decreases in foreclosures. “Location,” as everyone knows, is everything in real estate. Owning a home in a city with a federal government downtown will always be a plus.
While unemployment edged up slightly in July (.10%), the nation’s capital and areas inside the Capital Beltway continued to reflect the national average, which is unusual and a reflection of unprecedented economic and employment forces.
Historically, even during past recessions, unemployment in the District of Columbia has been below the national average. But since the 2010 midterm elections, public employee downsizing that had been relegated to states struggling to balance their budgets has appeared to freeze hiring in the Vincent Gray administration. Pressure on local employment has also been exacerbated by program delays resulting from obstructionism on Capitol Hill, as witnessed during the debt-ceiling debate.
According to data retrieved from Metropolitan Regional Information Systems for July, 586 homes were purchased last month, which is an increase 4.09% year-over-year. This was coupled with a median sold price ($445,000) improvement of 4.71% compared to the same period in 2010. But there is one discouraging metric. Days on the market for a property to sell in Washington, DC has increased 11.29% since last summer.
For those considering a purchase, be aware that the above statistics are not uniform for the city. There are still neighborhoods being driven by foreclosures and short sales. While you may be buying a property that appears to be at a discount, that perspective property could experience additional price erosion until there is a balance of buyers and sellers in that particular market.
As stated in previous articles, it is better to rely on the opinion of a licensed appraiser than real estate agent when it comes to estimating the actual value of any property. An experienced salesperson is usually only trained in suggesting a ballpark purchase price. Not knowing what the market would really pay if you had to sell after a few months could cost you your life savings.
While it appears that most real estate markets in the country are still trying to find the bottom, there are specific areas of the city where year-over-year increases suggest now may be the time to buy.
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