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  • Anonymous

    I’m assuming this statement refers to the average cost of homes in DC proper. Does anyone know what that number is now?

  • Anonymous

    Not terribly surprising for rowhouses, but crazy when you consider all the condos that go into the average.

    • Anonymous

      I think wording “average home” from the tweet and most of the corresponding article (which someone posted the link to above) is misleading. At the very end of the article, it says (as Anonymous 12:52 quotes): “The median single family home price in D.C. currently hovers around $600,000, according to the CFO. The average price is roughly $713,000.” So that apparently includes only single-family homes (rowhouses, townhouses, semidetached houses, fully detached houses) and not condo units.
      I think usually in real estate-speak, “homes” includes condos.

      • textdoc

        Oops, that was me at 1:41 pm.

      • Anonymous

        “So that apparently includes only single-family homes (rowhouses, townhouses, semidetached houses, fully detached houses) and not condo units.”

        Why do you say that? I’m pretty sure they’re including all kinds of homes. An increase of 25% over 4 years is not unreasonable!

        • textdoc

          The actual revenue forecast that Neibauer is analyzing uses the word “home” (see the final page of this 11-page PDF: http://cfo.dc.gov/sites/default/files/dc/sites/ocfo/release_content/attachments/February%202014%20Revenue%20Estimates.pdf ).
          .
          However, that report lists the “average home sales price” for 2013 as $712,800, and the conclusion of Neibauer’s article says: “The median SINGLE FAMILY HOME [caps added] price in D.C. currently hovers around $600,000, according to the CFO. The average price is roughly $713,000.”
          .
          I imagine Neibauer must be getting this SFH specification from somewhere — maybe more detailed stats from MRIS and the Greater Capital Area Association of Realtors, which the CFO’s report list as sources for those figures.
          .
          In any event: Prices are soaring.

          • Anon5

            Maybe the distinction is between the median price and the average (mean) price.

        • Anonymous

          Because the term “single-family home” typically excludes condos.

          • Anonymous

            I thought it typically excluded attached homes as well.

  • brookland_rez

    Buy now or be priced out forever.

    • dno

      It’s an eye-catching number, but it really just means that prices will climb at 6% annually from 2014-18. That’s above nationwide historical norms, but less of an annual increase than we saw in the run-up to the bubble or during the more recent rebound from the crash. It makes sense given the momentum this city has generated as a place to live, perhaps having become the most desirable jurisdiction overall in the metro area. Like all projections, it relies on assumptions that may not play out, but it’s not far-fetched.

      Also, as others have pointed out, all the multi-million dollar homes that trade hands in Georgetown and Forest Hills skew the average well up above the median.

      • brookland_rez

        That’s true. And there’s still plenty of affordable properties east of the river. A lot of west of the river locales will top out as they get all the amenities to make them top tier neighborhoods. This will push east of the river to gentrify as first time buyers and those with less to spend on houses go over there.

      • Anonymous

        +1 Sometimes I think it’s hard for people to internalize inflation

  • anon

    Awesome, however, which neighborhood and what type of home? More details please.

    • Anonymous

      It’s an average, so I guess “all of them” would be the best answer to both questions.

  • SF

    Right… because the housing market isn’t artificially propped up or anything, and there’s no way it goes anywhere but up.

  • Anonymous

    How can they say this with any confidence? What happened when the bubble burst in 2007? Is this not the exact kind of thinking that housing prices will always go up? (maybe here in DC but not everywhere). Highly doubtful that this is a once in a life time chance to own DC property or be priced out forever…

    • Anonymous

      Given that it was reported in a tweet, safe to assume there is a lot of nuance that was left out.

    • brookland_rez

      The bubble that popped in 2007 was due to poor lending practices. DC didn’t really have a wide spread bubble because DC’s boom was mostly due to demographic changes, which continue to this day. There were some localized bubbles in DC, but they were mostly concentrated east of the river, where prices went up but demographics didn’t change that much. Over there, there was a high concentration of subprime lending.

      • Anonymous

        +1

      • Anonymous

        But you forget that Uncle Sam ultimately controls the real estate spigot. And when that gets turned off, say buh-bye to any price increases. My guess is that the DC real estate market stabilizes at the Jumbo mortgage limit (which $713K is very close to hitting). ‘Cuz it’s all other peoples’ money.

  • gotryit

    a quick search shows us at $810K in November 2013, so that may not be so ridiculous. I think the shocker is how much higher the average is compared to the median, which is what we normally look at.

  • Anonymous

    Long-tailed, bounded distributions are why we use medians

    • Anonymous

      Hello, fellow statistician/data geek!

  • Trueblue

    No worries. The wealth will trickle down.

    • Anonymous

      lol

    • TG

      Good one.

  • bruno

    I know that just because someone says (predicts) something doesn’t mean it’s true.

  • TragicJ

    Not seeing these number east of the river. You can still buy for low $100K. Sad.

    • brookland_rez

      Their time will come.
      It will start with historic Anacostia and enclaves like Hillcrest, Ft. Dupont, etc. and spread from there. I know people that own in Hillcrest and it’s already started to change in the current up market that began 2 years ago. In this particular up market, I predict most if not all of west of the river will change. The east of the river enclaves will completely change and begin to spread a bit to neighboring areas. There will be another dip, my guess by 2016 that will last a few years. East of the river probably won’t see widespread change beyond the enclaves I mentioned above until the next up market, maybe by 2020 or later.
      All of these predictions of course are predictions. But I’ve been studying the DC market for the 10 years I’ve been here, so take it for what it is.

      • brookland_rez

        Right now is a good time to buy east of the river. It would be the equivalent to people buying rowhouses in Brookland in the 90’s for under 100k, and single family homes for 150k.
        Yes, DC real estate was that cheap! I know people that bought rowhouses in Glover Park for under 250k in the 90’s.
        Of course, DC was a very different place back then. There was no Whole Foods in Logan (that came in ’97), crime was still very high. Lots of boarded up houses. The only decent nightlife was in Adams Morgan, Georgetown, and Dupont, with U St emerging. I wasn’t here, but I know a lot of people that were.
        Overall, I don’t think most places east of the river are any worse today than the H St area was 10 years ago when I lived there. And based on what it offers (or doesn’t), I think it’s priced appropriately.

        • gotryit

          And it’s extremely close to downtown DC. Like Arlington close. That won’t change.

          • brookland_rez

            Exactly. For access to amenities, Anacostia is one metro stop away from all the stuff that is happening at Navy Yard, new Whole Foods, etc.
            Like I said above, I think Anacostia will remain an enclave in this up cycle. There’s just way too much subsidized housing once you get out past the historic part. Until the ratio of subsidized to market rate housing changes drastically (like pre-gentrification Columbia Hts versus post-gentrification Columbia Hts), there won’t be widespread changes beyond historic Anacostia. If the city can get Barry Farms redeveloped, that will kick off widespread change in historic Anacostia, which should hopefully happen in this up cycle.

          • brookland_rez

            I thought hard about buying in Anacostia in 2009 when I bought in Brookland. After spending 5 years in the pre gentrification H St area, and still rough N Cap/Lincoln Rd area, I was ready to get into a quieter neighborhood where crime wasn’t a constant issue. Brookland was that, even though there wasn’t really much in the way of neighborhood amenities. Ft Dupont/Hillcrest today would be kind of like Brookland was 5 years ago. Quiet, middle class enclaves, under served with amenities.

      • h st ll

        Interesting analysis. Keep posting.

  • I want to know the forecast for homes in Ward 4. Averaging out AU Park SFHs, Ward 4 rowhouses, SW condos and Congress Heights apartments is a little kooky.

    • Anonymous

      Phase 1 of the Wharf is scheduled to completed by 2017. There’s already a new apartment complex in SW Waterfront with a small studio apartment going for about $1700, IIRC. And that’s now, before a shovel has been used. So I imagine it will be mid-2000s, if not 3K in rent by the time the Wharf stuff is complete. That area and EOTR are pretty much ripe for buying if you get in now.

  • Anonymous

    What do you think rents will be like by then?

    • brookland_rez

      Rents generally are priced for the present level of a neighborhood. House sale prices have other factors priced in, like where the neighborhood is headed in terms of gentrification.
      For example, when I lived off H St 10 years ago, I rented an entire house for $1200. That was right after the owner paid 420k for it. Houses on that street still go for that same price range, but rent has doubled. So I paid cheap rent because even though everyone knew the neighborhood was on the up swing and it was priced into the sale prices, it was still crappy and had a lot of crime issues. So the owner could only get in rent what the neighborhood was worth at that moment in time.
      So just because house prices hit whatever amount, it doesn’t mean rent will reflect what people pay for houses at that moment in time.

    • dno

      Well, if we wrongly assumed that homes available for rent are representative of all properties in DC, the average rent would be about $5,000/month in a balanced market in 2018.
      .
      Given that the size of homes for rent skews much smaller than homes for sale, average rents will probably be well below that. Also, the new rental supply is significantly outpacing new condo supply, so that will probably keep rents lower in the short to intermediate term.

  • ledroittiger

    Like the “You’re On Coke” billboard in the backdrop there…

    • Matt

      +1

  • Anonymous

    What do people think will happen to the property values in the short term if DC starts allowing foreclosures again?

    • brookland_rez

      I think demand is high enough that there will be plenty of buyers willing to buy and renovate.

    • dno

      Nothing unless maybe there are a couple foreclosures near you and you are looking to sell at the same time. Even then, doubt it will have an impact on prices.

  • 17th Street

    So clearly I will continue to rent and live in below-average homes. Below median, too.
    Better get used to it cause it looks likes it’s going to be that way forever.

    • brookland_rez

      Or buy east of the river and work to make your neighborhood better like everyone that bought in the (now) nice neighborhoods did years ago. Buying is the only way to lock in your housing costs. If you rent, you will forever be pushed where the market pushes you.

  • Anonymous

    Big Bubble, No Trouble eh? When the Fed gov’t eventually trims borrowing/spending it will burst…has to.

  • jeffb

    Can someone explain why the average cost of homes for all of DC is 713k when the average sold price of homes in 20003 (Capitol Hill south of E Capitol St–a zip code I would assume is one of the more expensive in the city) is 569k? Even if that figure includes condos it should still be skewed up since many homes sold now are newly renovated flippers. It seems that, plus the premium prices in the Eastern Market area, should make 20003 a lot more expensive than the city as a whole. What am I missing?

    • brookland_rez

      20003 is not that expensive of a zip code. The upper NW zip codes skew the average greatly. 20007, 20015, etc are all way over $1 million.

  • Riggs Park Person

    Does this mean the zestimate I have been laughing at might actually be somewhat accurate? I feel like Riggs Park is the forgotten little gem over here near Takoma and Brookland.

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